Stock What You Sell

Selling your products online may sound easy, but if you are going to make it a full time job, then be prepared to go through the same survival-of-the-fittest challenges that will be thrown upon you.

The reality is much tougher than it looks. You may have heard of the term ‘drop-ship’, where you actually sell something that is not in your own inventory. Instead, you actually ask your supplier or manufacturer to drop-ship your orders for you. This may sound like a very good arrangement, but very often, your customer service’s quality will be compromised. Speed of delivery is out of your control. The way the items are packaged is out of your control. The stock level is out of your control. With so many things out of your control, you are risking your reputation.

Yes, drop-shipping may help to alleviate your cash flow issue, but it also introduces many problems into your operation. When you drop ship, you don’t receive the goods in your warehouse hence causing your stock level to be negative. You then setup a virtual warehouse for each of your suppliers to solve the goods receiving problem. And virtual warehouses can become an administrative nightmare when it comes to tallying your stocks.

So, I can only tell you this- if you are indeed serious about selling your products, stock them. Stock just enough to last for a 2 weeks if cash is tight. If possible, stock up to 30 days.

Why are you not stocking them now? Probably you are not confident about selling them. If so, talk to your suppliers and ask them for consignment. If you can’t get consignment, ask them if you can exchange the goods with similar value products. If you want to return the stocks for good, is there a restocking fee (usually 10-15%)? Some suppliers demand cash on delivery, but if you can find suppliers who can provide you with 30 days credit, then you get yourself some breathing space. When we started 12v.com.my, one of our suppliers was kind enough to give us 120 days credit. That was one of the critical factors that allowed the company to last till today.

Back to the stock issue. Since you don’t have all the money in the world (at least not yet), you cannot stock everything you are selling on your website. So, the key in stocking up is priority. Naturally, you want to stock the items that you sell the most, but starting out, you probably don’t have the data to back you up on which item would be in demand, and most importantly, if certain demand trend is picking up, or dying off.

This is where your intuition plays a big role. Yup, logic can only help with facts and figures, but if you are trying to look into the future, you have to start using your sixth sense. By that, I don’t mean you are gambling. Real entrepreneurs don’t gamble, because in a game of chance, they know the odds are always against them.

There are a number of factors that will cause your product to sell like hot cakes or turn your hot cakes into cold turkeys. Here are a few reasons I can think of:
1) competition; some is good, too much or too little is no good
2) stock availability; if it’s easy to get anywhere, it’s probably more challenging to sell
3) profit margin; the higher the profit, the better you can wage a price war, but don’t get addicted as the winner of a price war means you just created a low profit business for yourself
4) mass appeal; if given a choice between selling chicken eggs or a Bugatti Veyron gearbox, always choose the eggs.

But the most important factor, more than any of the ones listed above, is your opinion towards the product itself. Simply because your opinion on the object you are selling matters. Are you already sold on the product yourself? Would you disown your own family members if they don’t buy from you? Would your friend associate you as the ambassador of the product you are selling? If you don’t have a favorable opinion on the product you are selling, you won’t go the extra mile in pushing them to the market. No, you cannot be neutral about it either. In fact, you have to be extremely biased.

So, you now know how to get the right product to stock. Now, go sell it.

2014-01-21T02:29:25+08:00January 18th, 2014|E-Commerce|0 Comments

How to Build Traffic to Your New e-Commerce Store

73/365 : a walk in pasar malam

We all know that getting the first throng of traffic to our site is always the hardest. And this challenge is further amplified when you have no idea how you should measure your traffic building strategies, and whether you are getting more noise than real prospects.

If you don’t know what you want, that’s exactly what you are going to get.

In other words, you must be specific. When it comes to traffic building for your website, there are really many things that you can and should try. While applying this scatter-shot approach, it’s equally important to measure how effective each of these methods are so that you can allocate your resources accordingly.

Before we go into the specifics, we must know where we now stand. Simply look at these 3 things first on your Landing Pages:
1) Unique visitors
2) Bounce rate – how sticky are your pages?
3) Average time spent on site by each visitors – Quality information? Are you selling your products or just describing your product using the descriptions provided by your manufacturer?

Notice I mentioned Landing Pages, not your Home Page. Measuring those metrics on your Home Page isn’t very useful if you are a store selling many products, since the Home Page will not have any specific mission, other than to impress your visitors.

Your Home Page usually will likely be an informational page, giving your visitors an idea what kind of product categories you carry and also giving first time visitors a general idea how your website is structured. There are just too many things a visitor can do (which may not be a good thing in some cases) on your Home Page making the data your get from it rather ambiguous. This doesn’t mean it’s not useful but we must now focus on the more pressing issues, such as sales and conversions.

So, all your pages in your website must be optimized and be treated with the same TLC you give to your Home Page, and yes, that includes your Terms and Condition page. Every pages on your website has its unique functions, and it should be designed to accomplish them. Otherwise, they should be removed from your sitemap.

For instance, your “Contact Us” should list down as many information as possible where your customers can contact. Emails, phone numbers, address, GPS location should be in there. If you also have a retail front, include a Waze link or a Google Map link. Instead of using a clip art of a phone, put in a friendly photo of your sales team to give it a personal touch. If getting an enquiry is all you need from your website, then let the visitors know that they will get a mysterious free gift if they ask you a question via email.

Signaller with his instruments makes himself a comfortable seat in an old bath tub

In short, you want to keep improvising the pages on your site so they really work hard for your business.

Next, we are going to figure a strategy to boost these numbers. And a good strategy is first to get a pair of socks and then place yourself in your customer’s shoes. No one other than yourself can provide the most useful inputs in this section. There’s a reason why consultants are not running your business. Consultants are useful for their advice on best practices, upcoming trends and identifying opportunities outside your core business. But they should never ever tell you how to run your business.

So now you are ready to start looking at things from your customer’s viewpoint. Let’s start with the questions they are likely to ask when it comes to searching for products/services that your company offers- the ‘Hows’ and the ‘Whats’. Answering the ‘Hows’ allows you to give an air of authority to your prospects, that you really know your stuff.

If you are selling vintage clocks, you can write about ‘HOW’ to evaluate these clocks in an auction. ‘HOW’ to refurbish a vintage clock. ‘HOW’ to verify authenticity of a vintage clock. From these content, you may get a lot of emails soliciting for free advice, but that’s the whole idea- the ‘Hows’ really gets the conversation going and conversations is the foundation of building trust.

The ‘Whats’ is somewhat definitive, you basically write about the common questions relevant to your industry. Again, it’s to show them your credibility and give a more established feel to your site. Try not to plagiarize if you can help it since major search engines reward originality and visitors prefer reading opinions and reviews, rather than plain product descriptions. Compare an official product description provided by a manufacturer and a simple 100 words testimonial from a recent customer, which one do you think has a higher impact in convincing a customer?

How to Respond to Online Reviews

Also, take into account that you are not the only one offering the products/services. In fact, the odds are very much against you on the web. But fear not, if you are very confident with your products and customer service, in the long run, you are going to win. In the short run, run as fast as you can to get there ;-)

In the next post, I am going to share how you can buy traffic. Like one of my friends always tell me, “if you can solve a problem with money, it’s not really a problem.” And in our context of traffic building, I would like to add that although you can have all the traffic in the world, but what you really need is “Highly Targeted Traffic”.

2013-11-25T03:23:44+08:00November 25th, 2013|E-Commerce, Traffic Building|0 Comments

10 E-Commerce Do’s and Don’ts

By ILYA POZIN

1. DO test your product.
2. DON’T assume that people will just find your site.
3. DO set aside a budget to test marketing.
4. DON’T bank on raising more money.
5. DO listen to your customers.
6. DON’T try to be everything at once.
7. DO build a solid foundation before launch.
8. DON’T give up quickly.
9. DO have a business model that makes money.
10. DON’T spend 12 hours a day sustaining your company.

Read the full version

A very helpful list of things that you should contemplate when running your own store. In fact, I think it also applies to brick-and-mortar retailers.

And this is my experience so far based on the points shared above.

1. DO test your product.
Very true if you want to have the confidence boost when selling your products. One of my stores has got more than 3,000 products, so I don’t think I can TEST every single one. You are your own best critic, and if you won’t use the products yourself, how can you make your customers use them?

2. DON’T assume that people will just find your site.
Yes, if you are running your own store, building that traffic is the most challenging part of the game, for at least the first 12 months. As suggested in my earlier post- leverage on the platforms, but don’t rely on them too much.

3. DO set aside a budget to test marketing.
You don’t know what works, yet. So keep trying out new channels and cut your losses fast. If everyone is doing it, doesn’t mean it’s going to work for you.

4. DON’T bank on raising more money.
Never had experience on this one, not yet. But I suggest that you spend your time in building up your core business and make it work first.

5. DO listen to your customers.
Well, not all of them are always right, but you can really improve faster based on the feedback customers gave you. We are even giving out freebies to customers just to hear what their suggestions. You will be surprised how ‘truthful’ they are.

6. DON’T try to be everything at once.
Unless you have a 100-employee gig going on, it’s never a good thing to spread yourself too thin. You can only spend that much time talking to suppliers, designing your own brand, developing your marketing plans, fine-tuning your stores. And if you are like a lot of start-up, your most precious asset would be your time. Doing the right or wrong things can make or break your venture.

7. DO build a solid foundation before launch.
Yes, I learned this the hard way in the bookkeeping department. We are still catching up with backlogs, but be careful of the perfectionist syndrome.

8. DON’T give up quickly.
Ahh… When do you call it quits? In my opinion, you can’t really quit something. You merely try a different way of doing it. Read The Dip. There’s a reason why there’s a barrier to every business you go into. In fact, the barrier is the very reason why the reward is real.

9. DO have a business model that makes money.
That’s why you are in a business in the first place, isn’t it? Your responsibility is to survive, and survival means profits. As much as they say you need passion, I think you also need bread and coffee on the table every morning.

10. DON’T spend 12 hours a day sustaining your company.
More hours doesn’t mean you are more productive. Being a workaholic, I cannot say what is the right amount of time you should spend on your venture. Delegate when you can, so you can focus on the more pressing issues. In the beginning, everything is pressing. Balance is key.

2013-09-17T23:44:34+08:00September 13th, 2013|E-Commerce, Entrepreneurship|0 Comments

9 Data Sets for Your Ecommerce Store

Just a few days back, I wrote on the metrics that you should focus on when running your online business.

And Scott Gerber (via Mashable) has got 9 data sets from 9 different entrepreneurs:

  • 1. User Acquisition Costs
  • 2. Abandoned Carts
  • 3. Google Analytics Experiments
  • 4. Visitor Value
  • 5. Lifetime Value
  • 6. Traffic
  • 7. Lead Source ROI
  • 8. Purchase Funnel
  • 9. Percentage of Mobile Visits
  • If there’s one thing I would add to the list above, it’s the Customer Engagement metric. Simply put, the Customer Engagement metric measures how effective your marketing messages are. For instance, open rates and response rate for your email campaigns. Click-through rate for your ad banners. Leads from your Youtube videos. Comments on your blog or Facebook posts.

    Measuring performance and tracking your numbers is very important but you should always be careful not to overdo it. Think of the big picture.

    2013-08-28T02:24:10+08:00August 28th, 2013|E-Commerce, Entrepreneurship|0 Comments

    E-Commerce Platforms with Hidden Agendas

    E-Commerce Platforms with Hidden Agenda

    On one fine morning, you get a phone call from XYZ company telling you why you should sell your wares with their up and coming e-commerce platform. And they tell you all the astronomical traffic they have (which you will take a lifetime to build) and the merchants that are already selling with them. And most importantly, they tell you, your competitor just signed up with them too.

    And without much hesitation, you tell them,”OK, how do I get started?”

    In the beginning, as with all fairy tales, it was all sunny and rosy. A few weeks after you list your products on XYZ’s platform, you watch your daily sales spikes. And you begin uploading all the inventories you’ve got and populate the store you have with Company XYZ. You then begin to invest more and more time and advertising money with them. You thought, “How can this go wrong? Why didn’t anyone told me about this before?” And you start giving all the love to this new platform that promises to escalate you to new level of riches and fame.

    And after about 6 months of exponential sales growth, you realized something is amiss. A search on your superstar products suddenly returns more results than it did previously. Which should be a good thing, this would mean that your SEO efforts are paying off. The only problem is that these similar product listings do not link to your store, but rather to another merchant. And you call up your friends who are also selling with XYZ. And they revealed the same thing.

    And then more of your top sellers begin to appear, only this time the cash does not go to you.

    And you’re furious! You picked up your phone and called up the account executive who assisted you with opening a store with them. Now you remembered that why he had that sly grin when he was talking to you. It suddenly become clear to you that they never said anything about not using the data they gathered from merchants for their own benefits. You were never in their big picture of expansion.

    They gave you the platform free of charge, but someone’s gotta pay for programmers and the hosting fees. Company XYZ is not a charity, it was pretty clear from Day One. In fact, they never acted like one- they are super aggressive in signing up new merchants and spends millions a month just in advertising.

    And now they know what Malaysian online consumers want, and they can provide it with a lower price tag and more varieties, with free delivery, 365 days money back guarantee and possibly even a note that says, “This is an original, unlike the ones you see on…”

    Ouch! And you go back to your drawing board, blow off the dust from your own online store, and realized that your months of neglects is showing. There’s no new product updates, no new articles on your blog and the figures in your analytics are dropping month-on-month. Well, at least the bounce rate was up, eh wait, that’s not a very good thing, is it?

    Okie, maybe you think I made it all up just to spite one of the big players in the e-commerce platforms. Maybe I heard one of them called me names behind my back. Or they took me off from their list of keynote speakers.

    None of the above is true. It did happened to 2 online merchants I know personally. I almost enrolled in their guinea pig programs but thanks to the ‘misfortunes’ of my 2 friends, I escaped from these ill intentions.

    I am not saying that all big e-commerce platforms behave as such. Not everyone has a hidden agenda. There’s always good people around with decent business models. One way to find out is to ask other merchants’ experience with these platforms. Hence, it’s always important to get away from your computer and warehouse to socialize with real humans who can provide some real world experience. There’s a lot to be learnt from offline sources.

    People are always willing to share with you if you don’t have any hidden agendas.

    2013-08-23T21:36:00+08:00August 23rd, 2013|E-Commerce, Entrepreneurship|2 Comments