January 23, 2014

Is Bigger Better?

Targeting

In perusing Etsyology, you might get the impression that bigger is better. This site displays statistical data on sales activity on etsy.com, and offers a fascinating view of what makes for a successful shop and what people buy. One thing you’ll notice on this site is that many of the shops with the most sales also have the most products available, giving the impression that bigger is better. The more stuff you have for sale, the more orders you get, at least that’s how it appears. Is that really true? Let’s discuss:

1. The Long Tail
In terms of retail strategy, the long tail refers to selling a many unique items with relatively small quantities sold of each. This is the strategy used by many of the high performing shops on Etsy, and no doubt retailers all over.

What are the advantages of this retail philosophy?
– It allows you to have something for everyone. If you make posters and you’ve got posters about dancing, beer, baseball, cookies, etc. then regardless of a person’s interests, you are likely to have a product that suits them.

– Metaphorically speaking, this approach is like buying many lottery tickets. The more tickets you have the more likely you are to win. Simply having a lot of stuff on Etsy or Amazon or the internet in general means there are more chances to get orders.

So what’s the downside to this approach?
– The obvious big problem with this approach is that it requires you to design a lot of items AND stock a ton of inventory! It’s a big job to offer something for everyone and not everyone has the space to stock so much product or the creative juice to design a zillion things, especially products the designer may not be passionate about. This approach is well-suited to products that can be made-to-order, but might be a real headache if your product has to be produced in bulk.

– The other drawback of this approach is that is may detract from brand cohesion. If you want to build a brand that’s all about food and cooking, you can’t start making products about baseball and robots and kittens. It would detract from your singularly focused brand identity.

So who should employ this type of strategy?
If doing a lot of online sales volume is your primary goal this strategy can be great. It’s a proven way to make money selling stuff online and if you care more about bringing in the cash than following your vision this could very well be the way to go.

2. Keeping it Short and Sweet
If your goal is to keep a tight cohesive brand offering something for everyone may not be ideal for you. You may want to keep your brand focused on a specific theme or aesthetic and offering 1,000 different items may not be possible.

What are the advantages of this approach?
– Keeping your product offerings limited means you can maintain a cohesive theme or aesthetic for your brand. This may be especially helpful if you want your brand to be known in the brick and mortar world. Think about brands like Sanrio, Ed Hardy or Paul Frank. All of their products have a very similar look that’s easily identified with those brands.

– Keeping a limited selection of products also makes it easier to manage and stock inventory. If you have a product you have to manufacture in large quantities to make your margins, it may be necessary to limit your product selection. For example if you design shoes and your shoe manufacturer requires you to order 500 pairs of each kind of shoe you may not want to have 100 different shoe designs.

What are the drawbacks of this strategy?
– Not everyone is going to be your customer, in fact, most people won’t be. So you’re going to have to work extra hard to connect with the people who are. You’ll need to think more in terms of relationship-based marketing. You may not sell as much volume online as other online shops because you can’t sell to everyone.

– Since your product offerings don’t appeal to everyone, you’ll need to make sure the people who are a fit for your brand really love your product line. You’ll need to produce more “hits” to make sure everyone who might buy your product will buy it. For example, if your brand is all about birds you better have some of the most amazing epic bird art ever so that every bird lover under the sun will definitely want your products.

Who should employ this strategy?
If you are more interested in wholesale than online retail this approach may be a better fit for your needs. This strategy also makes more sense if you are trying to maintain a consistent theme or style for your brand. If your products have to be produced in high volume before they are sold this approach may be your only option.


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June 21, 2010

Use Your Sales Data to Make Business Decisions

Filed under: Ecommerce — Tags: , , , , — Meredith @ 6:29 am


When we talk about analytics in the ecommerce world, most of the lip service goes to web analytics. You absolutely should monitor your website stats. You need to know where referring traffic comes from and how many visits and page views you’re getting. All of that is valuable decision-making fodder. That said, those stats are primarily about visitors, not buyers. For the real goods, it’s important to run reports on your sales data too.

Here are some patterns you’ll want to look for:

What are my best sellers?
The things you sell the most of are a good indicator of what your customers want. (Duh) But it’s important to think about WHY it’s a best seller. Is it vastly cheaper than your other items? Does it have a superior design? Is it more functional than your other items? The features that cause things to sell well should guide future decisions about product offerings.

What are my worst sellers?
While best sellers tell you what people want, worst sellers tell you what they don’t want. If something isn’t selling it’s good to think about why.

You may also want to think about ridding your shop of loser products. These items that no one wants may be making your overall store less appealing.

Is there a particular size or color I sell the most/least of?
If your products vary by size and color, be sure to take note of which sizes/colors sell best. This will help you stock your shop appropriately and make decisions about product development.

Is there a particular type of product I sell the most/least of?
For example, if you sell jewelry, meaning necklaces bracelets and earrings, take note of what kind of jewelry you’re selling the most of. Are you selling three times more bracelets than necklaces? These patterns can help direct the development of your product offerings.

Are there days of the week when sales peak or drop?
Noticing when you sell products is just as important as noticing what you sell. If you know your traffic converts best on Fridays, you might start sending out your newsletter on Fridays to support this popular buying day.

If you know Tuesdays are slow, maybe you want to run special promotion codes on Tuesdays via Facebook to buoy sales for that day.

It’s also important to notice if sales pick up or drop off at certain times of the month. You may want to adjust your marketing efforts to boost slow periods or supercharge active periods.

Are there certain months where sales increase/decrease?
Being prepared for slow or busy months is extremely important. If you know certain months are busy you’ll want to make sure your stock levels are high for those times. You may also want to plan special PR or marketing efforts around those periods.

For example, if you know you do really well around Mother’s Day think about what you can do to make that holiday even more profitable. Can you plan a special PR push for that holiday? Should you be running additional advertisements?

If you know certain periods are slow, for example if you sell knits and you know summer is dead for you, think about how you want to handle that. Do you want to introduce a line of summer knits made of lighter materials? Can you survive on slow sales in the summer because your winter is so busy? If so, what do you need to do to adjust your budget accordingly?


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March 8, 2010

The Lights Are On, But No One’s Home

Filed under: Ecommerce — Tags: , , , — Meredith @ 5:05 am

It takes so much work to drive customers to your website, it’s a shame to lose them once they arrive because you’re not ready for them. The advantage to selling online is that you can have a 24 hour a day, 365 day a year business. To truly reap the benefits of this, here are a few pitfalls to avoid.

Out of Stock
Keeping stock levels constant can be tricky but it’s an important part of keeping customers happy. You don’t want to run out of a popular item and have customers go looking for it elsewhere with your competition.

To avoid going out of stock in the first place, make sure you’re staying on top of inventory levels. If something is selling especially well make sure you have a lot of it on hand. If you know a media placement is going out that’s going to talk about a particular product make sure you have a lot of that item in stock.

If you do run out, the second best thing to do is give customers a link they can click to request notification when the item is back in stock. You may even want to consider offering the customers who asked for stock notification a discount to complete their purchase when the item is back in stock.

Empty Product Categories
Make sure that if you claim to sell something that you do actually sell it. It can be very frustrating for customers to click links to product categories and find there is nothing actually there. It detracts from customer confidence and the overall customer experience.

Those empty product categories are also bringing irrelevant traffic to your website, making your conversion rate seem lower, not to mention introducing your brand to new people in a disappointing way.

Gone Fishin’
For the small business owner, this can be a tough one to avoid. Sometimes we go on vacation and we aren’t around to fulfill orders or answer customer emails. The bad news is that this costs you sales. A big bummer since you’re probably on vacation spending money. If you are a one person operation it might seem like putting a “closed for business” sign up is your only option. One alternative is getting a trusted friend or relative to business-sit while you are away.

If you’re only leaving for a short time, like a long weekend, you may not even need to put your business on hold. Simply update all your shipping turn around times on your website to account for your absence and have an auto-responder email set up that replies to customer emails letting them know their email will be replied to on the date of your return.

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March 5, 2010

Link Love: The Most Valuable Small Biz Articles Posted This Week


Every day I check out the 100s of subscriptions in my RSS feed about marketing, PR, advertising, branding, social media, and a host of other topics of interest to small businesses that sell online. Most of what gets posted isn’t earth shattering but I reserve Fridays for the best reads of the week. So here you have it, the most valuable things I read in the business blogosphere this week:

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