Retail Blog

What’s stopping you from starting the next big thing in e-commerce? Nothing. We propose that with as little as $1000 and some elbow grease you can build a successful and profitable retail business online.

The RetailBlazer formula for retail success is simple.

Success = Community + Expertise + Relationships + Branding

1. Community

Build a community–your customers should feel like they have a personal relationship with you and your other customers.

2. Expertise

Focus on a single product category and become and expert.

3. Relationships

Develop long-lasting relationships with wholesale suppliers of products in your chosen category.

4. Branding

Nurture a brand that fosters loyalty, trust, and expectation from your customers.

Disclaimer: This is not a get rich quick scheme. This is a strategy for getting your hands dirty, adding value, and then getting rich slowly while satisfying your customers.
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Americans will spend $40.8 billion on their pets in 2007 according to the American Pet Products Manufacturers Association. Taken as a whole the pet industry is old and established. Some would say staid. But within the pet industry the luxury segment is smoking hot. Upper-middle income Americans love to spoil their companions and high-end items are must-haves for their furry, feathered and finned best friends. Faux mink coats, feathered French day beds, designer bird cages, botanical fragrances and even rhinestone tiaras are just some of the luxuries that are being lavished on our furry American friends.

These days it is better to be selling to the four-legged customers.

1. No dominant brands.

Not an authorized Chanel dealer? No problem. The pet fashion industry is wide open with hundreds of companies providing innovative designs.

2. What looks best wins the sale.

Without dominant brands the retailer is able to choose their line of fashion based on what looks best, instead of which brand is the hottest. Creativity and an eye for the new and exciting is all you need to build a winning line of pet fashion.

3. No dominant retailer.

Is Petco a player in doggy fashion? Please. Amazon? Not a chance. This market is wide open and just waiting for a winning retail brand to take the day.

4. Cross-licensing opportunities abound.

Hanes may have already locked down domestic rights to Spiderman 3 underwear, but that is probably for humans only.

5. More opportunity for innovation.

Human fashion is stuck in a rut. Milan? New York? The same labels every year. Where is the innovation? Pet fashion is booming and no one has an exclusive on the next big name in canine couture.

6. Faster growth rates.

Sales of pet services are growing at 20% per quarter at Petco. Pets are part of people’s families now and when momma needs a new frock you know that her best friend won’t be left out.

7. There is no last season.

Dogs don’t do seasons so there is less need for arbitrary markdowns.

8. Pet Fashion Week

August 18th, 2007 will mark the beginning of the second Pet Fashion Week in New York.

9. Doggy fashion has its own rag.

Pampered Puppy is the new Vogue.

10. Better margins.

All of the above helps to keep margins on doggy fashions healthier than their human equivalents.

Empty-nesters with fat 401ks, young couples delaying having children and pampering their pets — any way you look at it the apparel industry is going to the dogs. Smart independent retailers won’t get left behind.

 

There are a lot of companies that claim you can make thousands of dollars a month selling drop-shipped products online. This is a parade that is screaming to be rained on. The reality is that you probably won’t make much money selling drop-ship products on Ebay.

If you haven’t heard, drop-shipping is a retail fulfillment method where the retailer never actually owns or stocks inventory in the product they are selling. The retailer sells the product to the consumer online and a wholesale supplier, known as the drop-shipper, ships the product to the customer.

There is nothing wrong with drop-shipping–in fact, many of the web’s largest retailers sell drop-shipped products every day. What’s wrong is that drop-shipping is being sold as a method to get rich quick. Starting a business that sells products online exclusively through drop-shipping is a recipe for disaster. There are too many factors that you have no control over that can severely dent your business.

1. Low Margins

The drop-shipper you are buying from is probably not the manufacturer of the product you are selling. In fact, the drop-shipper is probably buying their inventory from yet another another middle-man. You are the last in line in the supply-chain and you are not going to get a competitive price from the drop-shipper. In fact, you should not be surprised if you find products on Amazon.com that are selling at a lower price than is offered by the drop-shipper.

2. Competition

Everyone wants to make more money and these drop-ship companies are marketing to everyone. If you can roll out of bed and sell digital cameras online then so can anyone else. If everyone ends up selling the same product the downward price pressure will further dent your profits–especially if they are sourcing from the same catalog of drop-ship products.

3. Reliance on a Single Supplier

Smart retailers always have multiple sources for their products when possible. If you buy into the idea that any company can provide a constant supply of name-brand consumer electronics then you have a lot to learn. There is a reason why people spend so much time finding new sources and protecting their existing sources. Products sell out all the time–especially hot consumer electronics. Just because a drop-shipper has a picture of an XBox 360 on their home page doesn’t mean he is going to have them in stock when you have just sold one to a customer. If your only drop-shipper doesn’t have the product you will lose the order and the customer.

4. Loss of Branding

How will your drop-shipper represent your brand when your customer receives your package? You will be lucky if the drop-shipper will include a packing slip with your logo on it to the customer. Even if your customer does get a branded packing slip he will also find himself on the drop-shipper’s mailing list. Think about it: you probably paid good money through AdWords to get that customer’s order and now your drop-shipper has the customer too.

Unless you can get a contract with a supplier tailor-made to your needs drop-shipping online is a losing game. Effective e-commerce takes effort.

You need a defensible strategy for selling products online. A key to your success will be establishing long-lasting relationships with high quality suppliers. Start creating those relationships now by finding quality wholesale suppliers and manufacturers of specialty products today.

Still not sure what to sell? Here are thirteen wholesale sources for Halloween costumes. Go make some relationships and start selling!

 

Retail is a brutally competitive business. Most retailers simply cannot compete against larger rivals on price. This can lead to retailers selling products carried by their larger rivals as loss-leaders. Smart retailers know that larger rivals can be easily outfoxed through a simple strategy. The larger rivals, by definition, serve the mass-middle of the economy. Retailers know that there is money to be made by serving above and below the price ranges of the big-box behemoths. Tools like the ProductBlazer wholesale supplier search engine can help independent retailers find new suppliers to provide high and lower end products.

Discover Suppliers of Innovative Specialty and Artisan Products
Smart retailers also take advantage of their smaller size by growing their business through identifying emerging talent. There are countless suppliers of unique craft and artisan products. Most of them work the trade show circuit with limited success. But a small number of craft and artisan manufacturers provide innovative products, including toys, jewelry, apparel, and even electronics. If you can identify talented artisan manufacturers, while they are still emerging, you can grow your business, and their business, by providing your customer with unique products they can’t find in other stores.

Take Advantage of Your Smaller Size
These emerging talents cannot provide the volume of products required by Walmart or Target. But smaller independent retailers can take advantage of their size and carry unique, sometimes one of a kind, products that the big-boxes simply cannot carry. Doing business with artisan suppliers isn’t any harder than doing business with a national distributor–it’s just different. Your account manager may be the designer, or the spouse of the designer. Embrace these differences and create a real relationship with the supplier founded on a solid stream of orders through your storefront.

Actively Manage Your Relationships
There are some differences in doing business with artisan suppliers. The most important difference to you may be that their view of channel management and support could be different than yours. Before you begin sending purchase orders understand how the artisan supplier views you, the independent retailer, as a channel. Are you selling online? Is the supplier also selling online? You may have far more experience than the supplier in channel relationships–don’t take advantage of them. Just figure out a way to build your business along side their business.

Find New Artisan Products Today
Doing business with artisan suppliers is much less of a challenge than actually finding them! Many work trade shows on a regional basis and occasionally visit national shows. ProductBlazer provides instant access to thousands of artisan suppliers of jewelry, toys, apparel, housewares, and a lot more. Here is a Supplier Spotlight of wholesale sources for beautiful artisan jewelry. Start getting in touch today and build your business on the beauty and innovation of artisan products!

 

Sometimes it makes perfect sense for a big retailer to stop selling online.

In the early days of the web, there was much debate in retailing about the importance and necessity of jumping into the e-commerce game. While the prospect of this new sales channel was exciting, there were many unknowns. Retail IT departments didn’t understand the new technology. Merchandisers wondered whether enough people would use credit cards on websites. And everyone wondered what it all meant on the backend.

Many of the larger retailers, newly sporting the label “brick-and-mortar”, moved forward cautiously. Indeed, Wal-Mart shuttered its e-commerce site during the 1999 Christmas season rather than let mounting technical problems affect any of its customers. This cautiousness made room for the rise of the many “pure-play” e-commerce retailers who hoped to challenge established retailing. Soon enough, however, the unknowns around e-commerce became known. The established retailers, building in some cases on the mistakes of the pure-plays, moved into e-commerce and used their existing brand recognition to crush the new upstarts. Only a handful survive to this day.

That an established brick-and-mortar retailer should also have an e-commerce site thus moved from point of debate to conventional wisdom. But depending on your business model, you can still be a big retailer and be wise to avoid selling online.

The June 21, 2007 announcement by Pier 1 that it is shuttering its e-commerce operation may look like a desperate cost-cutting measure to some. To be sure, Pier 1 is in real financial trouble. They are in many ways similar to TJX, another established retailer that discontinued e-commerce operations for its T.J.Maxx and HomeGoods brands in 2005. However, I suspect this is a move both would have made regardless of their finances.

Here’s why: digital content and inventory.

E-commerce Operations 101

One of the biggest operational headaches for any e-commerce retailer is provisioning digital product content. In order to sell a product online you need multiple images, description copy, and other product information. E.g., to sell sheets you need threadcount, and to sell cameras you need megapixels. There are many companies that exist to ease this burden for retailers one way or another. Most of the time this involves getting the content from suppliers or manufacturers who are willing to help as part of promoting their own business.

In those cases where it can’t get existing content from such helpful sources, a retailer must pay to have it created. This means shipping products to a studio, writing copy, assembling products and taking their pictures, counting threads, etc.. This is very expensive and easily costs up to $150 per SKU.

A retailer selling online also needs a reliable inventory of a product to sell against. This might mean that, in addition to its stores, the retailer puts some of the stock in its own warehouse for fulfillment. Or it might mean having a good 3PL or drop-ship partner. In any case, it is a huge customer service headache to accept orders online for products that are out of stock. A headache, but not the end of the world. Usually such items can backordered, and stocks replenished. However, it is customer service death to accept orders online for products that are out of stock and will never be in-stock again.

It’s the Business Model

Properly dealing with digital content and inventory requires that retail merchandisers carefully plan which products to sell, how many to buy, where to send them, and when to discontinue them. But both TJX and Pier 1 have business models based on sourcing serendipity - A.K.A. “opportunity buys”. For TJX, it means picking up a truckload of liquidated clothes and distributing them to nearby stores. For Pier 1, it means buying out the excess inventory of an Asian wicker factory and selling directly to American consumers. In both cases, there will be no supplier or manufacturer in the middle who is interested in creating digital content to help sell the products. In both cases, once the supply of a given product is sold out, there is virtually no chance for replenishment.

TJX initially tried to pay for the creation of content for its products, but soon found out that the task was impossibly expensive. How many different styles of shirt were on that truck anyway? Are pictures needed for all of them? What about these three lamps that were included? Similarly, there were inventory headaches. How many of those shirts should be held in reserve for fulfillment of online orders? What in-store sales are missed because the items were set aside for the online store? If this was TJX’s experience selling products online, I bet Pier 1’s is similar.

Shareholders of Pier 1 stock should take heart. Other financial issues aside, the shuttering of their e-commerce operation is likely a signal that things are moving in the right direction. The realities of an e-commerce operation are fundamentally at odds with their core business model. This step backward is really a step forward.

 

Everyone wants their name in lights. Short of that, how about your name on a 3 1/2 gallon bucket of Alcatraz Caramel Almond popcorn from The San Fransisco Popcorn Works? Many suppliers of high-quality specialty items will produce their products with your own brand on the bottle, in a process called private labeling.

Offering your customers products labeled with your brand is a great way for them to take a little piece of your brand home with them. Getting private label products produced for your company is easy. Start using ProductBlazer to find a supplier that will label their product with your brand. Next, choose one or two products that are relevant to your business. Finally, add a cross-sell at checkout time and offer your customers the chance to take a little piece of you home with them.

Offering private label products enhances your brand’s visibility.

1. It differentiates you from the competition.

You will be the only storefront on earth (and the Internet) that sells your custom branded products.

2. It expands your product line.

We all want more products to sell. Private labeling provides a great “excuse” to sell something you may not otherwise sell. A maternity shop selling hot sauce? Why not? It has your brand on it!

3. It enhances your brand by leveraging the strength of another company’s hard work.

Private labeling allows you to focus on building your brand and lets the popcorn experts handle the product development.

Many high-quality suppliers can ship their products with your brand. This list contains links to twenty suppliers that provide private labeling for a wide variety of products, including cookware, soap, coffee, roasted poultry, hot sauce and a lot more.

 

Every store needs a place to sell its wares. Whether it is a shop on Main Street, a table at a flea market, or an e-commerce storefront online, you need a place to display what you have to sell and accept payments from customers. Many people, including experienced off-line merchants, find the process of selecting an e-commerce storefront daunting. This article is intended to decode the technojargon that so often pervades discussion of anything online, and focus on the most important details.

In its most basic form an e-commerce storefront is just a product catalog, a shopping cart, and an integration to a payment processing gateway. The product catalog can be as simple as a single HTML page that many web hosting providers will provide for free. However, if you want to grow your business you will need the ability to adapt your storefront to changing market environments by adding and removing products, and even changing the look and feel of your storefront. Unless you want to learn HTML and another programming language, you will need an e-commerce storefront system.

What Features do you Need?
An e-commerce storefront system provides all of the features required to sell products online. A good e-commerce storefront system should provide the following features.

1. Store Design

Experienced visual merchandisers know that small changes to the layout of a store can have a big impact on sales. Many merchants are frustrated when they start selling online because they can’t change the layout and look and feel of their online storefront. A good e-commerce storefront will provide merchants with the ability to change the layout and color scheme of their e-commerce storefront without any computer programming.

2. Product Catalog

A product catalog stores information about your products in a structured format. There are several benefits to a good product catalog, including the ability to easily sell the same product on multiple pages of your storefront, and maintain a single place to edit the product information. Product catalogs also make it much easier to have products loaded into your storefront, but not yet available for sale. This functionality is vital when you are reselling a product from a manufacturer that may have an embargo date on the product.

3. Shopping Cart and Checkout

Every storefront needs a basic shopping cart that allows your customers to select products they want to buy, continue shopping, and then provide payment information. However many storefronts provide feature-rich shopping carts that may include the ability to save a shopping cart for later or suggest additional items for the customer based on the contents of their cart.

4. Payment Processing

An entire article could easily be dedicated to payment processing alone. Suffice it to say that any decent e-commerce storefront must have the ability to process your customer’s credit card transactions. Some storefronts will only work with major gateway providers, such as Authorize.net, while others will support other providers. If you have an existing relationship with a gateway provider make sure that the e-commerce storefront supports your provider.

5. Product Promotion

Good product promotion features allow you to feature certain products outside of the more rigid categorization imposed by a product catalog. For example, a storefront may allow you to create a category “Home Page” and feature some number of products on that page. These products could have sale prices whose prices will increase after a fixed period of time.

6. Order Management

What happens after your customer buys something? Larger Internet retailers usually have a separate system to manage the life-cycle of an order, and many e-commerce storefronts will have basic order management functionality built in. The most basic functionality you need is the ability to print a copy of the customer’s orders for your records. Many storefronts also support the printing of a packing slip that can be included in the customer’s order as a receipt of purchase.

7. Shipping & Taxes

Do you collect taxes from customers that live in the same state that your company maintains a business presence? Many retailers do, and some e-commerce storefronts provide the ability to calculate the correct sales tax for the customer. In addition to taxes, shipping can represent a substantial percentage of the customer’s cost and the customer will want to know exactly how much shipping and handling will cost. Many e-commerce storefronts will provide the ability to specify shipping and handling costs on a per item basis. Other storefronts many only allow shipping and handling as a percentage of the customer’s total sale. It’s important that you understand if your e-commerce storefront will support how you manage your shipping and handling.

8. Inventory Management

Customers hate backorders, but many retailers choose to continue to sell products that they have backordered. Every retailer needs to make their own policy decision and make sure that their e-commerce storefront will support their policy. Many storefronts provide the ability to upload an Excel spreadsheet of stock quantity information and allow you to configure the storefront to support your backorder policy. For example, the storefront may disable a product if it is out of stock, indicate to the customer that the item is out of stock and not allow them to make an order, or indicate the item is out of stock and allow them to proceed with their order.

9. Application Integration
   • Quicken or QuickBooks. When your storefront is integrated with your accounting software, your customers orders will automatically appear in the correct account.
   • UPS/FedEx. Some storefronts allow you to get an accurate shipping quote in real-time. Others will allow you to schedule the pick-up of a package and print the correct shipping label automatically.
   • Payment Gateways. Why process payments manually when your storefront can do it for you? Though make sure your storefront supports your existing payment gateway.
   • Order Management. If you have been selling through a catalog you probably already have an order management system. Many storefronts provide direct integration to popular order management systems. Other storefronts will allow you to export a simple text file of your orders for import into your order management system. Having a separate a order management system can present difficulties when customers cancel or change their orders, as the updates to the order may not be reflected in the storefront without manual intervention.

In most cases you will not throw out the other software you use when you starting selling online through an e-commerce storefront. Many storefronts can play with your existing software packages to make your life easier.

10. Marketing Support

How do you market your products online? If you are buying keywords through popular search engines like Google and Yahoo, you will probably want to be able to measure the effectiveness of each of the keywords. Many storefronts are smart enough to figure out when customers visit your site from keyword searches on search engines, and can help you gauge the effectiveness of those marketing campaigns.

Choosing an e-commerce storefront system is not easy. But finding a suitable e-commerce storefront much easier if you examine your current business processes and select a storefront that allows you to continue to do business the way you do today.

 

Google’s Adwords program is an extremely effective way to market your e-commerce storefront. However, if you are not careful it is also a very easy way to spend a large of money with zero return on investment. This article is an easy to understand introduction to the basics of Pay-Per-Click (PPC) advertising through Google’s AdWords program and the basics of calculating a return on your investment.

From Wikipedia:

AdWords offers pay-per-click (PPC) advertising, and site-targeted advertising for both text and banner ads. The AdWords program includes local, national, and international distribution. Google’s text advertisements are short, consisting of one title line and two content text lines. Image ads can be one of several different Interactive Advertising Bureau (IAB) standard sizes.

Simply put, AdWords allows you to buy traffic for your website based on keywords. If you operate a storefront online you are buying the opportunity to sell to a potential customer.

The Basics
AdWords allows you to create one or more advertising campaigns, each with a daily budget. The daily budget limits the amount of money that you will spend on any given day that your campaign is active. Each campaign has one or more ad groups that contain one or more ads that target one set of keywords or sites.

Directly from the source:

You set a bid, or price, for all the keywords or sites in the ad group. This is called a cost per click (CPC) or cost per thousand impressions (CPM) bid. You may also set prices for individual keywords or sites within the ad group.

For example, you may create a new campaign to promote your new online storefront. If you sell three different types of products you may choose to create three different ad groups. Each ad group has its own distinct set of keywords. Each ad group can also have more than one ad, which gives you the ability to try out different ad copy and determine which performs best.

The key to success in AdWords is planning. If you are selling products online your planning process should follow a simple pattern.

1. Decide which product to advertise and choose your “landing page”

What do you want to advertise? You could promote your company, a category of products, or a single product. For this example choose a product and then choose the page to which you will direct the potential customer after they click on the ad. The page you select is called a landing page, and there are many design factors that will affect how likely the customer is to purchase your product. These factors are outside the scope of this article. Google has many recommendations for designing a high-quality landing page, but for know choose the product detail page for the product you are advertising.

2. Find your keywords

What will your potential customer be searching for when they are looking for a product similar to yours? You can use Google’s Keyword Tool to discover potential keywords. From the tools menu, click Keyword tools and then select “The Site-Related Keywords” tab. From this screen you can enter the exact URL of your product detail page and Google will recommend keywords. For each recommended keyword Google will tell you how competitive the keyword is, and how much search volume there is for that keyword on any given day. Browse the suggested keywords and click the Add link. On the right side of the page there is a link that will take you to a screen where Google will estimate the number of potential customers you could find through your keywords. Finding the right keywords is difficult, so don’t spend too much time in the beginning trying to find the perfect keywords. After you have run several campaigns you will have a wealth of information available about which keywords worked and which did not.

3. Write your advertisement

The restrictions on the length and content of AdWords is frustrating to some people. I have always found the restrictions to be refreshing. AdWords gives you the ability to succinctly communicate the value of what you sell, and it forces your competitors to work within the same restrictions.

4. Activate your campaign and measure your results

Once you have chosen your keywords and written your advertisement you are ready to activate your campaign. The next step is the most crucial: measure your results. The only way to build an effective long-term AdWords advertising campaign is by continually refining the campaign to remove what does not work and focus on what does work. Google offers many excellent tools to help you refine your AdWords program, including Google Analytics and Google Web Site Optimizer

How to Measure the Return on Your Adwords Investment
You have found the keywords and ad copy that will bring traffic to your site. That’s great, but are you recouping your investment in AdWords? Measuring ROI is tricky and the appropriate method will be different depending on which industry you are in, though a basic e-commerce example is simple.

AdWords tells you the average cost of each potential customer and the total cost of your campaign, but it is up to you to find out your actual customer acquisition cost.

1. Find your average Cost Per Click (CPC) and total clicks

AdWords will report your campaign’s average CPC and total clicks for you.

2. Find your customer conversion rate

How many widgets did you sell on the day that your campaign ran? Take that number and divide it by the total number of clicks. For example:

If you had 1000 clicks and made 30 sales, your conversion rate is 30/1000 = 3%

3. Calculate the real cost to acquire a customer

Calculating the real cost to acquire a customer is simple:

Cost to Acquire a Customer = (Average CPC) / (Conversion Rate)

If the average CPC for your campaign is $1 it is tempting to think that your cost to acquire the customer is $1. The fact is that 97% of the potential customers didn’t buy the product after clicking on your advertisement. So the real cost to acquire one customer is actually $33.33, or $1/3%.

What Should You Do If Your ROI is Negative?
It is possible that your gross profit will be less than your cost to acquire a customer. Whether this is a bad thing will depend on what kind of product you sell and how good you are at converting one time customers into repeat customer.

1. It is not necessarily a disaster. If the products you sell are non-durable or disposable, try to convert the one time customer into a repeat customer. Each successive purchase will have an incremental cost of zero and will enable you to recoup your cost to acquire the customer.
2. Decrease your average CPC by bidding less for popular keywords
3. Decrease your average CPC by bidding on more specific terms

That was AdWords the easy way. For more advanced details on using AdWords keep a look for blog posts from experts. Social bookmarking sites, such as del.icio.us, are a great way to keep tabs on interesting and relevant AdWords content.

 

We blog because we love the retail business. We blog because there are too few dynamic resources for dynamic independent retailers. We blog because we want to hear the voices of independent retailers.

Who are We?
My name is Erik Morton and I am the co-founder and Chief Operating Officer of retail software company Initiate Commerce, Inc.. I’ve spent the last seven years of my career working closely with some of the largest retailers in the US, including QVC, Target, Costco, Sears, and many others. Initiate Commerce exists to help independent retailers do better business. Our first product, ProductBlazer, is a search engine for retailers that provides instant access to a universe of new products by indexing the websites of over 26,000 wholesale suppliers and manufacturers.

The purpose of this blog is to publish and discuss information relevant to independent retailers. It doesn’t matter where you do business. It could be online, a main street storefront, catalog, or flea market. If you sell products to consumers and do so in the shadow of Walmart, this blog is for you.