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2013 After Christmas Sales

December 27, 2013 Leave a comment

By far my strongest selling season is the fall, right before Christmas.  But my second strongest selling season is winter, from the beginning of January through about the end of February.

For items that sell well, I definitely want to have good inventory right after Christmas, and you probably do, too.  This is tricky.  The strongest selling season is just before Christmas, and popular items can easily sell out, but you need to have inventory available at the beginning of January.

The last 2 weeks of the year are also commonly taken off for vacation, so there’s a good chance you’re not in town to place or process orders.  Even if you were, there’s a good chance the manufacturers you order from are closed for much of that time.

My solution has been to stock up my most popular items throughout the summer and early fall not for expected Christmas sales, but a combination of Christmas and winter sales.  Unfortunately this is capital intensive, because you have to purchase inventory for your best six months up front.

Many manufacturers will let you defer payment for 60 or 90 days to help with exactly this kind of cash crunch.  They don’t always volunteer this information, though, so if you have an item that sells extremely well, ask the manufacturer about it.

I want to emphasize, though, that you should only do this for items that you know from personal experience are going to sell well.  The last thing you want is to buy a huge amount of inventory on credit that doesn’t sell.  So don’t take chances with this strategy, only use it for your absolute best sellers.

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I hope you had a great Christmas selling season, and that you’re now enjoying some much-deserved time off.  Let me know how it went, I’d love to hear from you!

 

PLMA 2013 Tradeshow Report

November 22, 2013 Leave a comment

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.

Halloween Sales Slowdown

November 1, 2013 Leave a comment

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.

 

2013 Last Minute Holiday Preparations

October 18, 2013 Leave a comment

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!

 

2013 Holiday Selling

October 4, 2013 Leave a comment

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.

Starting an Online Business

August 15, 2013 Leave a comment

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.

 

How Much to Charge for Shipping

July 26, 2013 Leave a comment

A big part of your expenses as an online retailer are shipping costs.  For items that are large, heavy, or not very expensive, the shipping cost can easily be a large fraction of the product cost.  You need to recoup these costs, but buyers are very sensitive to shipping cost and any appearance that an online retailer is gouging them.

My favorite way to deal with this is to add the cost of shipping to the price of the item, and don’t charge the customer any shipping fee.  This will make your price appear high relative to other online retailers that split out shipping separately as an add-on item, and will cost you some sales.  But you can minimize this by emphasizing your free shipping policy on your product pages.  Buyers like the comfort of knowing the price they’re shown is the price they’re actually going to pay, and avoiding check-out time fee surprises will make them feel better about your company.

There are other to deal with shipping charges, of course, but they haven’t worked out as well for me as free shipping.

One alternative is to get real-time quotes on shipping, and just charge the customer whatever you’re being charged by the carrier.  While this will get you past the appearance of gouging, the shipping fee will still look large to a customer.  I don’t like leaving my customers with a bad feeling about buying from me, and whenever people see a large shipping fee relative to the price of what they’re buying they’re not going to feel good about it.

Another option is to charge a flat fee for shipping.  If you know what your average order size is, you should have a good idea of what the average shipping cost to you is, and you can just apply that to every order.  If you use this tactic, I would recommend emphasizing your flat rate shipping policy on your website or product pages.  It isn’t as good as free shipping, but again customers will feel better about knowing there won’t be any surprises at check out time.  It will also encourage them to buy more things from you, since the shipping fee they’re paying will be the same.

You can also use a combination of the above tactics.  For example, you can add half the shipping cost to the price of each item and charge a flat shipping fee of half your average shipping cost to each order.  I still think advertising free shipping is more valuable, but a fixed shipping fee that’s clearly less than the customer’s expectation of shipping cost will give them a good impression, too.