Tuesday, October 14, 2008

Online Sellers Will Have to Work Harder This Holiday Season

I know many of you are saying, how can I work any harder? 
  • Well, you are going to have to manage inventory much more effectively this year. It will be tough to gauge demand with the economy in the shape it is in, so the long-tail may need to be shortened a little so that you don't get stuck with product. Also, your suppliers are dealing with the same issues and won't want to be sitting on a lot of excess inventory so there may be shortages later in the quarter. Watch the demand and keep in close contact with your vendors. You may need to go with smaller more frequent orders.
  • Manage your Marketplaces: By this I mean, identify which marketplaces are best suited for which product. You want the product on the site that will generate the most profit for you and as inventory dwindles, you should shift it to the site that will give you the most bang for your buck.
  • eBay Sellers will have Best Match and Finding 2.0 to deal with. I wish I could give you the recipe for success on eBay, but it would just change next week anyway. I can say this; if you get sales for a SKU/Listing, concentrate on keeping up your inventory for that item. With the "Recent Sales" weighting for Best Match, you can actually "Win the SKU" meaning that because you have "Recent Sales", you will always have preference in search (of course you have to keep the DSR's up). But, the opposite is true as well, if you "Lose the SKU" to another seller, you may just be waisting listing fees if you keep re-listing it -- Concentrate on the winners this holiday season and bag the losers.
  • Coupons and Cash-back will be big sales drivers: eBay and Microsoft are also going to be "buying customers" for you, so make an effort to go compare your product to the competition in the Microsoft Live Cashback site. I've heard of 30% cashback for a lot of items on eBay.
  • Free Shipping on your Website, may be your competitive advantage: You will be competing against every marketplace and big retailer out there. Free Shipping makes sense on the website because you don't have to pay the marketplace fees on top of everything else. Get creative! I'm not so sold on Free Shipping on eBay, but if it increases exposure in search, you may need to consider it.
There will be winners and there will be losers this Christmas, if you don't stay on top of each element of your business this Q4 you may be the latter.

Here are some great articles on what to expect this holiday season:

Just my 15%

7 comments:

Tony P. said...

Randy, I have an opinion on something you wrote. BIG surprise! :)

FREE SHIPPING. It's not so great as a selling tool. Lots of studies done, surveys, etc. and the better tool is...

EVIDENT VALUE. Set shipping at $1 and provide Priority or Ground.

If need be, do all of the calculation to factor-in shipping to sales price, but make a slight adjustment and set that shipping at $1.

Or $2. Whatever. Just show that YOU made a sacrifice. Yes, it's a Jedi thing, but it works.

Randy Smythe said...

Tony,

Thanks for clarifying my post. On my website I use the Amazon Super-Saver model and offer free shipping on used DVD's and CD's So if they just want a new release under $25 then they pay S&H if they want a used item (where I have a lot more margin) they get it shipped free.

You are correct, just straight Free Shipping doesn't always work, but you can't make the offer too complicated.

Cliff said...

Tony P. is right of course, but remember in terms of eBay you're not going to get advantaged in search with $1 shipping, so on that platform offering Free might actually be better just because of the extra eyeballs.

Thanks, Cliff

David said...

eBay UK is forcing DVD sellers to offer free shipping.

It's a really stupid idea. Say my average DVD is $10 and I normally charge $3 for shipping and $0 each additional

The new price is $13 and people end up buying only 1 DVD from you instead of 5 or 6.

David said...

one other thing. *RARELY* do I ever go to a website that offers free shipping.

I think I bought some supplies at Office Depot.com and I had to spend $50 to get free shipping.

Most websites I buy from give you free shipping if you spend over $100.

Randy Smythe said...

David,

Nobody should be required to ship for free -- That is just bad business. Each seller should have the flexibility to do whatever they want in regards to S&H within reason. I don't have a problem with S&H caps (with exceptions)

Tony P. said...

Yep, Cliff is right about the ebay environment - you need to do whatever it takes if your lone Widget is floating in a sea of Widgets.

Trouble 'tis, most of them Widgets are under the sea and drowning. An aside: everyone see the ebay announcement about the "title & description" search glitch?

Randy, my opinion was definitely not in conflict with your suggestion - just another view. "Six of one, Half-dozen of the other" sort of thing. :)

Another website sales ploy is downright devious, although it carries no malice towards the buyer. Another "psychology" thingy.

Have a banner announce "ALL shipping, only $3", or similar. Then set shipping on some (or all) items for $2.

The power of "I pulled one over on him!" has strong ju-ju. Hey, don't blame me, I just live here.