This Online Seller is Ready to Rock n Roll in 2009

Posted on January 3, 2009. Filed under: Other | Tags: , , , , , , , |

rock
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I can say that 2008 was quite an interesting year for me as an online retailer.  Becoming an Amazon 3P seller was, of course, the biggest (and best) thing I did in 2008.  From Thanksgiving to the end of the year, my revenue on Amazon for the one brand I was selling on Amazon exceeded my entire year’s worth of sales on eBay for the same brand.  And because my margin on Amazon was higher also, my gross profit from Amazon for the 30+ days at the end of the year far exceeded my eBay profits for that brand.  And, now, looking forward I can say that our company’s plans for 2009 look nothing like they have in years’ past. 

 

Here are a few things I am committed to doing in the 2009:

 

One: I am committed to play more Rock Band 2

 

Yes, that is right — more Rock Band 2.  It is wonderfully addictive and fun.  We gave our kids Rock Band 2 for Christmas and, since then, we have had several jam sessions that lasted until midnight.  I had forgotten how much fun I was missing by working too many hours selling on eBay.  In 2009 I am going to work less and play more.

 

Speaking of work, though… when I was making my purchasing decision to buy Rock Band 2, I noticed that all the stores had the same price for the game.  Best Buy, Gamestop, Target and others all had the set priced at $189 with no retailer varying from that price.  It brought to mind how the fixed retail price is a big topic of conversation among online retailers. 

 

According to a Wall Street Journal article titled “Why Some Toys Don’t Get Discounted – Manufacturers Set Minimums That Retailers Must Follow or Risk Getting Cut Off; Shopping Around for ‘Rock Band 2’, ” some companies such as eBay and Costco oppose Minimum Pricing.  (Click HERE  for that WSJ article). 

From a wholesaler’s perspective I wrote an article titled “A Common Sense Approach to the Map Price Fixing Problem”  (Clik HERE for that article) where I stated my opinion that if the manufacturer has rules, such as MAP programs, that a wholesaler does not like then the wholesaler should look for a different product to sell, from a manufacturer who has more acceptable terms.  To me, it is really that simple.  I want to have a good working relationship with my suppliers not an adversarial relationship. 

With Rock Band 2 being a hot product, what retailer in their right mind would want to discount the product to lose margin and to potentially lose their access to the product?  As a consumer, I didn’t mind that the pricing was the same everywhere.  Actually, it helped in my decision-making process because, without having to focus on price, I could more easily make the decision of where I was going to make my purchase based solely on the attributes of the retailers who were offering Rock Band 2.   

 
 

Two: I am committed to working smarter not harder

 

Being committed to having more fun in 2009 (my number one goal) means that I have to make more money with the time that I spend working so that I make the same income but I do so in less time.  I can do that in three ways – (1) by making my customers (you know, the ones who actually pay for their orders) more satisfied and thus I will experience more repeat sales, (2) by cutting out the service I give to “potential” buyers who end up not paying or “potential” buyers who want to negotiate prices and (3) by outsourcing where possible and cutting unnecessary expenses.

 

Outsourcing is definitely where I want to go in 2009.  This is the year I will be giving the FBA (Fulfillment by Amazon) service a try.  I have one specific line of product that I plan on sending to Amazon to let them ship from Amazon warehouses.  I have carefully chosen this specific line of product based on several factors and I have great hopes that both Amazon and my company will benefit from this new relationship.  For me, this type of outsourcing is a new venture and I am excited about the possibility of making more money with less effort. 

 

At the same time, I am creating new policies that will help me to cut down on the amount of effort I have been putting into my eBay business.  In the last quarter of 2008, we stopped providing a response to potential eBay buyers who asked for a better deal on product prices or shipping.  We simply blocked the potential buyer and moved on.  The result has been significantly less time spent answering emails as well as an improvement in our DSR ratings. 

 

In 2009, we are going to review everything we do on eBay to determine where we are spending too much time for the little return that we get and we are going to cut out the sales that take us too much effort to service.  Last year, we began reducing the number of items on eBay that we offered for sale outside the U.S. because eBay makes selling international very difficult.  For example, eBay sends an end-of-auction email to a buyer in Germany that also lists the shipping prices for U.S. shipping and Canada shipping which are significantly less than the shipping cost to Germany and the email is not clear at all that the shipping options and costs are unavailable to the German customer.  Therefore, the eBay system is creating more work for me in having to explain why those shipping costs are not available to the customer in Germany and it is not unusual for the international customer to then ask us to cancel the order after they receive the end of auction email.  In addition, the DSR ratings from international buyers are always lower because of the higher shipping costs and the customs duties many countries assess.  Lower DSR ratings means higher eBay fees for us if we do not qualify for the discounts because of international buyers. 

 

When we started offering more product to U.S. destinations only last year, our DSR ratings improved and the time we spent answering emails decreased significantly.  The tradeoff, of course, was that sales decreased but the lost international sales were more than made up elsewhere in other venues.  We only have so much time and we’d rather allocate our time to more profitable sales elsewhere.  And, chasing down nonpaying bidders on eBay has become almost a full-time job that simply is not worth it.  Instead of spending valuable time to chase down nonpaying eBay bidders …. spending time to increase customer satisfaction for paying customers, which leads to more repeat sales, is my third goal for 2009.

 
 

Three: I am committed to working more closely with my “partners” to increase customer satisfaction for my buyers 

 

As an online retailer, I depend on so many others to help ensure that my business is successful.  I need to have a good relationship with my suppliers and I am absolutely dependent on shipping carriers to deliver packages to my customers.  I have a good relationship with all my suppliers and shipping partners but I am committed to strengthening those relationships in 2009. 

 

The relationship I have with my suppliers is critical because I count on them to get the newest and best product to me quickly and in good condition.  Through the years, I have learned things about the different manufacturers from whom I source product.  Some manufacturers will ship the same day the order is placed, even during the height of the Christmas season, and their product always arrives in great shape with no picking errors while other manufacturers always run out of the best product before the end of November and any order placed through the holiday season takes a week or more to get shipped.  I can’t change how the manufacturers operate so I don’t try; I simply plan my holiday selling strategies based on the characteristics of my manufacturers.  And, this holiday season, my good relationship with one of my manufacturers in particular served me well. 

There came a point when I simply couldn’t fill the orders from Amazon that were coming in so rapidly and I turned to my supplier for help.  For one week, my supplier worked with me to drop ship items for orders ranging from $200 – $500 each so that I could meet the unusual demand.  Those were sales I otherwise would not have had.  And the best part?  My supplier charged me only an additional $5 per shipment, above the wholesale price, for the drop shipping service.  Next year, I will be able to plan better for the high volume of Amazon sales so that I won’t need my supplier to help me out by drop shipping for me.  But it is the great relationships I have developed with my suppliers that helps us both to succeed. 

 

The relationship with my shippers is just as critical to me.  I have access to all major carriers like the post office, FedEx, and UPS and I have used them all in various capacities.  I have a USPS truck that comes to our offices daily to pick up postal packages, including all international packages, and the postmaster himself has visited our offices to find out how they can better meet our needs.  The driver who picks up our postal packages daily is one of the best people I have ever met.  The US Post office gets the majority of my shipping business.

 

However, I generally ship larger heavier packages via FedEx service.  This holiday season FedEx far exceeded my expectations while UPS was a major disappointment.  UPS stated on their website and on their phone recording that they would be delivering UPS packages on Friday December 26th.  However, they failed to inform shippers that ONLY ground packages that had a previous attempt for delivery would be delivered on December 26th.  Ground packages scheduled for delivery for December 26th would, in fact, not be delivered until Monday the 29th.  On the other hand, FedEx stated on their website that ground packages would not be delivered on December 26th so imagine my surprise when at least a dozen of the packages I sent were delivered that day.  In addition, because of the bad weather across the country, FedEx even delivered some packages to recipients on Sunday December 28th.  Personally, I also had one customer’s order where FedEx had to make a total of 5 attempts to deliver and FedEx worked with me and the customer to get their order to them on Christmas Eve.  To say that I was pleased with FedEx this holiday season is an understatement.  You can bet that they will get more of my business in 2009.

 

One very valuable lesson I learned a long time ago is that it is very important to tell a business partner when they have done something to please you.  Almost everybody speaks up when they are dissatisfied but few people take the time to say “Thank You” for a job well done.  And because the praises and compliments are so few and far in between, they are the words that often make the biggest and most memorable impression. 

So, now you know the top three commitments I am making in 2009.  I must say that I am off to a good start in 2009 since I have been diligent about playing Rock Band 2 to a point where I “rock til I drop”.  It’s just really hard keeping up with the Band’s lead guitar player (my 10 year-old son) and the Band’s drummer (my 9 year old daughter) but they count on the old folks (parents) for the Bass and the vocals so that the Band can play at various gigs in a number of different cities online.

Our family sat at the dinner table on New Year’s talking about the upcoming year.  I expressed my willingness to tackle the business issues in 2009 but confided in the family that I was not as confident that I could do my part to tour successfully with the band.     Then the kids informed me about the “No Fail” option that is available on Rock Band 2 which means that I can never get booed off the stage no matter how badly I perform.  WOW!  What a concept.  Wouldn’t it be great if we could have a “No Fail” option in the business world?  Some folks might say that the “Government Bailout” is one form of “No Fail” option for banks, the auto industry, and some other businesses but for the rest of us… I guess we’ll have to muddle through 2009 without the “No Fail” option.   I do believe 2009 is going to be a year of both great failure and great opportunity for online retailers.  Personally, I am ready to put 2008 behind me and get the 2009 year started…. let’s rock and roll!

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6 Responses to “This Online Seller is Ready to Rock n Roll in 2009”

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Really enjoyed your blog post. Looking forward to also rocking and rolling in 2009. It will be a great year for challenges and rewards and I agree with many of the points you made especially working smarter and not just harder. Besides I got into this business because I think its fun and rewarding. I want more time to play as well (I haven’t got Rock Band 2 yet!). Happy New Year!

As I rove around the blogs looking at all the ebay commentary, I’m getting disturbed by the lack of representation for person-to-person, individual selling.

Even etsy, the crown jewel of the internet, has no set way of keeping businesses out and only Little People in.

Ebay and the alt sites alike seem to want to professionalize the occasional seller right out of existence, dismissing them as hokey, 2nd-rate charlatans who foist junk off on others.

Early ebay shined as a place where a person could conveniently sell 1 of something. Just 1. Is it back to the dank, dark days of the Classified ad?

I’d like to hear your thoughts about the Occasional Seller and his place on the new, business-dominated Internet?

[…] News gets it this week, with a simple realisation – I had forgotten how much fun I was missing by working too many hours selling on eBay.  In […]

Is it in my reading, Brews, or are posts like this much more fun to write than the typical eBay post 🙂 Really, you’re “Rocking and Rolling” here, such a positive and informative message, you got me psyched up whereas some of the eBay posts get me down (of course, not putting the blame on you there!)

I too am psyched for ’09. Lots of new projects promoting my niches are now become realities. I’m still shopping for my own self-hosted store, but as always, am confident that this next one is it (leaning Zen Cart though want to see the new Auctiva product before committing).

Question, are you finding Amazon outperforming eBay across the board for you, or just specifically for the product you refer to here? My regular goods, vintage collectibles, are not good Amazon performers, but I’ll be keeping my eyes open in ’09 for something that can be. I had a taste of the Amazon $$ in ’08 and would love to find a way to regularly tap into it! For now though, ’09 is still based around eBay, capitalizing on the continued growth of Bonanzle and that ever elusive new shopping cart I mentioned above!

PS: DMed you on twitter. I have something to submit.

Thanks, Cliff

An interesting year, that reminds me of the Chinese curse “May you live in interesting times.”
I was very interested to read your plans and strategies for the New Year and hope you will have time to check out Bonanzle which could well be suited to be your new liquidation and outlet venue.

Best wishes for a profitable and more relaxed year to you and yours, I think you rock too.

Such wonderful comments. Thanks!

I am very excited about 2009. I feel like an explorer who is setting out for the first time to discover new unmapped territory. Unlike 2008 it is excitement and hope, not fear, that I feel this year.

I am glad to share the events of my journey this year with you and I wish the very best in 2009 for you as well.


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