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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May 25, 2012

Doing What Your Best At (A.K.A How Not to Fail in Business)

Filed under: Growing Your Business — Tags: , , , — Meredith @ 7:45 am


From time to time we get to chatting with our manufacturers and suppliers and we’ll hear “I really want to do what you guys do, start a label. Can you give me any tips on that?” or “I tried to start a label, it never worked out for me.” While I can understand the appeal of starting a label, it’s not the job description most people think it is and it’s not the job for everyone.

A surefire way to fail in business is trying to take on a job that doesn’t play to your strengths and interests. While some companies succeed in wearing multiple hats, it’s not what works for most businesses. When you are working with products you usually are going to fall into one of the following categories:

1. Manufacturer
My very first attempt at entrepreneurship mainly fell into this category. I liked making stuff for myself and thought it would be fun to make a whole bunch of stuff and sell it online. I pretty quickly realized that I actually hate making stuff. I enjoyed making one or two things for myself, but making hundreds or thousands of things didn’t interest me in the least. It was repetitive, it was boring, it was tedious. I failed because I’d taken on the wrong role for myself. What I really liked was product design, not manufacturing.

If you’re truly happiest chilling in your workshop all day listening to music and cranking out products manufacturing is for you. Maybe you enjoy working with your hands or find the repetitive nature of that work soothing. The world needs makers, so if this is your strength this should be the focus of your business.

2. Retailer
Having a storefront is an entirely different job description than being a manufacturer. To take on this role you’ve got to enjoy working with the public and have a knack for curating and merchandising products. People often ask me if I’m ever going to open a store for Ex-Boyfriend. The answer is probably not. We have no real interest in running a store of our own. We’ll do pop up retail events every few weeks, but we’re always glad when they’re over.

If you love the idea of decorating a space and filling it with your favorite finds and showing your space off to consumers and chatting with people all day, a retail store owner might be the perfect job for you. If those are the things you love, there’s no reason to get bogged down with tasks like product development or manufacturing.

3. Product Developer/Label Owner
This is what I do. My partner and I are most interested in designing and developing products and bringing them to market. We suck at making things, especially in high volume, but we love the design aspect and don’t mind the logistics of coordinating with manufacturers or finding stores to carry our line.

If your strong suit is design and you’re comfortable managing manufacturers and conducting business to business sales, this is the job for you. You can’t spend all day talking to consumers or making products, because you have to spend your time developing new products, coordinating their production and bringing on retailers to sell your wares.

You’re going to need partners…
While it’s possible to do two or more of these jobs, most business owners will find they are best suited to choose one or two at most. Your best shot at thriving is focusing on the role you’re best at and most passionate about. You can choose other businesses to work with to take on those other roles.

If you find yourself struggling with one of these roles, consider whether it’s really what you want to be doing. If you love making stuff but can’t stand sales and marketing, running your own label might not be the best fit for you. Consider working with other businesses that like that stuff and providing them your manufacturing services. If you want to start a store, don’t drive yourself crazy trying to fill it with your own exclusive wares, find labels you want to support and fill your store with those products. Think about what you enjoy doing most and excel with, that should be the focus of your business.


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October 25, 2011

Ultimate Online Shop Pre-Holiday Checklist

Filed under: Ecommerce — Tags: , , — Meredith @ 11:13 am

The holiday rush is about to begin in the retail world. Are you ready for your busy season? Here’s a handy checklist of things you should make sure you’ve completed before the rush begins:

Your Marketing
__ Pitches to gift guides (Deadlines for most print outlets have passed, they are probably working on Valentine’s day, but online outlets are still accepting pitches and online placements are pretty awesome in my book.)

__ Plan your advertising (where will you advertise, what’s your projected ROI, what will the ads look like/what messaging will they contain, will you be testing ad variations, how will you be tracking ad performance)

__ Plan your promotional offers (will you be doing a Black Friday special, what will the offer be, is the offer compelling and easy to take advantage of, are the promotions you’re offering in line with the price you need to charge for your products)

__ Schedule your email blasts (what dates and times will you be contacting your newsletter subscribers, what content will you include in those mailings)

__ Make sure your products can be found on Google Shopping and Bing Shopping

__ Include marketing in your shipping procedures

Your Site

__ Make site ready for the season (Make sure all the copy and promotions are relevant to the time of year. Dress up your home page with seasonal themes/promotions. While you’re at it, make sure your site isn’t annoying or otherwise crappy.)

__ Make sure your product photos and product descriptions are at their best (make sure you are using human models where appropriate)

__ Make sure products are merchandised for easy browsing in ways customers like to shop (and don’t forget about cross-sells)

__ Post shipping date cut offs for Christmas delivery (and make sure this info is easy to find)

__Verify that your site answers questions customers commonly ask (and make sure the answers are listed in places customers would intuitively look for them)

__ Make sure your site is set up to encourage secondary conversions. Customers who don’t buy now for gifts make come back after the holidays to get something for themselves, you want to encourage them to take actions so you can keep in touch.

__ Offer gift cards for sale that customers can instantly download and print (great for last minute shoppers)

__ Offer free printables

Your Headquarters

__ Make sure you are adequately stocked with products to fill order demand

__ Make sure your shipping area is organized and stocked with supplies you need.

__ Streamline your shipping process

__ Be prepared to handle international shipping

__ Make sure you’ve set up an easy way for customers to do returns and exchanges

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