I just returned from the Private Label Manufacturers’ Association (PLMA) Tradeshow in Chicago. It was a good show, and took me two pretty full days to talk to all of the exhibitors I wanted to see.
It was my first time at the show, and one of the things that really stood out for me was the number of companies making private label food products. If you’re looking to sell your own brand of food, definitely go to this show next year.
Besides talking to the manufacturers I had pre-arranged to see, I also spent some time just wandering around the aisles to get ideas for other things I might like to sell but haven’t thought of. I did come across one type of product that’s related to my current sales strategy that I don’t sell yet. The trip would have been worth it for just that one revelation, but of course I got a lot of other business done, too.
In addition to products to sell, there were also some exhibitors there offering services to retailers. For example, if you’re going to sell private label products, you want attractive, professional-looking packaging. There were exhibitors at the show to help with all steps in creating your own packaging.
If you attended the show let me know what you thought of it.
There’s another good trade show for private label manufacturers and retailers coming up in March, ASD Las Vegas. Check out their site, especially Source Direct, there’s probably something useful there for you to attend.
I’ve had several emails asking about this, so I’ll put it in a post.
My sales do slow down considerably in the days before Halloween. People are probably too busy with decorations and activities to spend time shopping online. So if your sales have slowed down in the past week or so, most likely it’s just a seasonal thing and they’ll pick back up again now that Halloween is behind us.
Do, however, take the opportunity to get things done while sales are slow, even if it’s only for a few days. Looking for new products to sell is always a good thing to do, it should be part of your weekly (if not daily) routine. Whenever there’s a seasonal respite, use the extra time to find more good products to carry. That’s what will keep your sales going in the future.
You can also use the time to plan your merchandise purchases for next year. By now you should have a good feel for how well each of the items you stock sells, and what your profit margin is on them. Plan your inventory buying accordingly. If you don’t have the data available already to make this decision, spend the extra time to get the data, you’ll be glad you did next year.
My sales generally recover pretty strongly right after Halloween as people start their Christmas shopping in earnest. If you fulfill your own orders this will probably be the start of the busiest time of year. If you use a third party fulfillment service it should be a relatively quiet time, as you’re mainly just getting ready for next year.
Good luck with your Christmas sales season! Drop me an email and let me know how it’s going, I’d love to hear from you.
Despite the just ended government shut down, my online sales have been going well. It looks like it’s going to be a strong Christmas season!
Here are some last minute things you should take care of now, in case you’ve fallen behind:
First, make sure you have up to date information on total cost associated with every sku you sell. You need to know what your margins will be at any given sales price, so you can set your prices correctly based on competition.
Second, if you sell on an online marketplace like Amazon or eBay, spend some time checking out your competitions’ pricing strategy. Remember, people can set prices differently based on day of the week and time of day, so start sampling your competitions’ prices throughout the day for several days in a row, and keep it in a spreadsheet.
Third, decide what your sales strategy will be for each of your products. E.g., if you don’t have a lot of inventory on a strong selling product, you may want to raise your prices now and let other retailers sell out their inventory, so you can sell at a higher margin later in the season.
My next post will be right around Halloween, and traditionally my sales slow down in the days leading up to Halloween. So there should be some extra free time in the next couple of weeks to spend on looking for more products to sell.
Good luck, and let me know how your holiday sales are going!
Now that it’s October my online sales have taken a noticeable bump up. I hope you’re seeing a similar increase.
I’ve finished stocking up for the holiday sales season, and I use 3rd party fulfillment services for all of my fulfillment, so this is actually a slower time of year for me. But it’s also the time I start getting ready for post-holiday sales.
Specifically, one of the dangers of selling online is that you run out of your best selling items during the holidays, and miss opportunities to sell in January and February. So I’m starting to place orders for merchandise that will be available primarily after Christmas. It may be here in time to catch the tail end of Christmas shopping, but for the most part this merchandise will capture opportunities afterwards.
One advantage to having plenty of inventory in January and February is that competition is generally at its lowest then, as many retailers are completely out of some stock. This means your margins can be higher, though it only takes one cut rate retailer to destroy everyone’s margins on a marketplace like Amazon.
Let me know how your sales are going. If they haven’t increased meaningfully from a month ago, you should check your prices against your competition to see what’s going on.
Last week I talked about selling private label products as a way to avoid intense price competition on Amazon. Of course, to do that you have to find private label manufacturers.
This November there’s a private label trade show in Chicago. I’ve never been to this particular trade show, though I plan to attend this year. The organizers say there will be over 1000 companies exhibiting their products.
The ASD trade show is in Las Vegas in March. That trade show is not dedicated to private label manufacturing. But it does have over 2000 manufacturers and importers exhibiting their products, so there’s a good chance you can find manufacturers to work with.
If you attend either show, please send me an email and let me know how it went, and how valuable you thought it was.
If you’re selling on Amazon, you’ll eventually notice that just about any product can get into a price war. Someone decides they’re going to undercut everyone else to take the volume, and survive on thin margins. Usually it’s a large seller with lots of volume. Check out any of the most popular toys selling on Amazon as an example.
What can sellers who are just starting out do?
My suggestion is to start with products that aren’t going to invite a lot of price competition from large sellers. E.g., you can focus on products that have good but not great volumes. Products that rank in the 10K – 50K range are often good candidates. Do make sure you track their sales rank for a couple of weeks to make sure they never drop below about 50K.
If you have a reliable source of used products of a single sku that can also be a good choice. Most of the high volume / thin margin sellers want to concentrate on new products. If you go this route it’s important that your source of products be pretty stable. It takes time to create a good listing, so you need to sell a lot of products to make it worth your while. A notable exception to little competition selling used products, though, is books. There’s a lot of competition in used books.
Products that need preparation before being sent to an Amazon warehouse can also be good candidates. Some high volume sellers handle their own fulfillment, but many send their inventory to an Amazon warehouse for FBA fulfillment. If they do, they probably don’t want to spend the effort on a lot of manual, time-consuming product preparation, and will skip selling such skus. However, if you’re fulfilling your own sales, you don’t have to worry about prepping the products to send them to Amazon.
You can also sell unique products, like your own art work or craft work. A clever example of this I read about was someone who could print t-shirts on demand. He had a program that generated random messages, and create an image of a t-shirt with that message (so he didn’t have to actually make a t-shirt with that message until an order was placed). Then he had a program create an Amazon listing with the message, using the image created earlier. In this way he was able to quickly create millions of unique t-shirt listings on Amazon, and of course no direct competition.
There’s no limit to the number of ways you can succeed selling on Amazon, but it will take a lot of effort to come up with a reliable way you can win. The important thing is to actively work on finding a way to win, rather than just trying to compete on price, or hoping no one else starts competing with you.
I’ve updated my list of potentially good products for you to sell on Amazon for August.
The hardest part of any business is starting it. You have to identify an unmet need of some sufficiently large group of people. You have to find a way to fill that need that’s better than whatever is available today. You have to identify a way to have your target audience find your site once it’s ready. Then you have to actually execute your plans.
That last part, executing on your plans, is arguably the easiest part. Most likely that’s what you’ll end up spending most of your time doing, but it’s mostly mechanical things: getting software and installing it; writing articles or product descriptions; filling orders. If you don’t do the earlier steps well, all of your work on the mechanical aspects of your business is likely to be futile. It’s easy to spend a lot of time and money on a new business venture, but if you don’t have a pretty good idea of a path to success before you start, there’s a good chance you won’t find such a path when most of your time is consumed by the mechanical aspects of running the business.
Unfortunately, many people don’t do those earlier steps before starting their business. Instead, they come up with an idea and start the business right away, without considering things like what they’re going to provide that’s better than what’s available today, or how they’re going to stand out from the crowd.
That doesn’t mean you have to have a detailed plan before you start out. More likely is you have a vague idea, and need time to experiment, explore, and learn. After a while you’ll understand the market you’ve been experimenting with, and at that point you can ramp it up.
I ran across this article on someone who started an online retail business selling children’s books. It’s a huge market, but there’s a lot of very stiff competition (e.g., Amazon).
The article leaves a bad impression that the person who started this business made it successful quickly. It says something to the effect that he toyed with it for six years, then got serious and made it a success within a couple of years. That may well be how the owner thinks of it, but I see it a little differently. He spent six years learning his target market. When he started out he probably had little understanding of what opportunities were available, but after six years he had a good idea of some unmet needs that existed. At that point he started putting a lot of time and money into it, and within a couple of years (with the knowledge he gained from the previous six years and a lot of hard work) his business is starting to show significant success.
If you’re just starting out and don’t have a solid idea of what to sell or how to sell it, my suggestion is start small and experiment. Over time you’ll learn about your target market, and at that point you can focus on making it a big success. Until then just focus on learning. Make a point of looking for unmet needs every week, rather than just grinding through the mechanical aspects of your business. There’s no way to know how long this will take – hopefully less than six years. But one of the good things about online retail is that you can make money at it while you learn. Until you ramp up the volume it won’t be a lot of money, but making any money while learning about your market is better than spending money to learn about it.