ShopTalk

Supply-Side Week in Review

Hello there!

Shopster has had some major facial reconstructive surgery and is now more dimply and perky than ever! Along with this face-lift (and nip/tuck, with a bit of lipo and an ever-so-slight augmentation) comes the much vaunted product list functionality, which can be viewed in its full glory on the Home page once you log in. This stuff is pretty sweet, as it lets us directly link you to a hand-picked selection of products. Previously to do this required all of the desired products to share a common search term, which you can understand is a little awkward if you're trying to promote barbeque sauce in conjunction with Wiis (don't ask why this would happen, just go along with it).

If you don't have a Shopster account, but want to know what some of our initial lists are all about, here's a summary:

Camping Stuff - Without a doubt one of the best excuses to drink beer all day and sit in a lawn chair in the middle of a river, the commercial camping season is open for business as of May. This list of camping-related items would serve well as a beginner selection to a new outdoorsman store as it has everything from tents to flashlights to barbeque racks. The items featured here would also serve well to round-out an experienced camper's tools, with some all-or-nothing pieces such as folding cots, tripod cooking rigs, or gigantic bug-resistant canopies.

Gaming Cashcow - The video game industry accounted for nearly $18 billion (with a B) in sales in 2007. That's a 43% increase over 2006's $12.5 billion. With the release of behemoth Grand Theft Auto IV ($314 million its first day, over $500 million the first week), and the continued strength of all three major consoles, 2008 is shipping up to be another huge year. What's more is that demographics previously untouched are now being lured into the gaming sector. The Wii, touting titles like 'Wii Fit', has opened up an avenue into the fitness community, while similar Wii games along with Rock Band for the 360 and PS3 have made gaming into a family-and-friends event. And let's not forget the portable consoles, where the Nintendo DS sold 8.5 million units last year. Choo choo, all aboard the money train!

That is it for today's update! If you have a Shopster account, log in and take a look in our Feature Request forums to participate in a poll that will help determine some of the content coming to you in our new product lists.

Have a great weekend!

Don't sell the Wii

Yes, I am telling you to not sell the Wii Console. OK, you can sell the Wii Console, but the money is in the accessories.

Let me explain. Assuming that Nintendo can meet the demand for Wii Consoles the price of the Wii Console should remain constant. If you sell the Wii today you may average a 3% profit which translates to about $8 - $23. That is, you can stock your online store with the Wii Console from the Shopster Warehouse for about $275.49 and you can sell it at a competitive rate for about $283 - $300.

As Nintendo should be able to meet the market demand, consumers will most likely only be willing to buy at a competitive rate. You probably won’t see the surge in price (and profit) that you saw during Christmas 2006 and 2007 again. Therefore, there is not a huge amount of money to be made selling the Wii Console.

But, there is a ton of money to be made selling to those who already own the Wii Console. Wikipedia has suggested that over 10 million households in the United States own a Wii Console. That means over 10 million households are buying Wii accessories.

Tap into this ready made market by focusing on Wii accessories and merchandise. Accessories include games, remote charge stations, remote skins, receiver stands and carrying cases.

A few accessories that you should consider selling to optimize profit include the Aluminum Pro Gamers Case, the Nintendo Wii Action Pack and the Sensor Band. Each product may net you over a 40% margin of profit. That’s huge!

Take a look at our warehouse today. The Shopster warehouse has a ton of Wii accessories.

Happy Selling!

Supply-Side Week in Review

G'day folks, and welcome to the first Supply-Side Week in Review on Shoptalk! This weekly update outlines all the changes made to our warehouse over the last seven days. New suppliers, supplier removals, big updates, or anything else product-related we feel is important for you to know: it's all here. Without further adieu, let's get to the business.

New Supplier - The only new supplier for this week has a bit of trick to them, in that they have separate Canadian and US divisions. As such, you should now be seeing two new suppliers in the warehouse. "Baby Knapsacks (Canada)" and "Baby Knapsacks (US)" now offer a small selection of durable, hardcore baby-carryin' backpacks. The Canadian division offers two lines, while the US side carries three. The items are variance (so you get more bang for your buck) and the products themselves have been endorsed by some pretty spiffy celebrities. A Shopster account is required to view these new products: Canada / US.

Blogtastic? - The Supply-Side review began in our internal Support Blog, where Shopster retailers can watch for system updates, scheduled downtime and other relevant news about goings-on. It has been running reliably since September '07, giving retailers a helpful view into the inner workings of Shopster's supply department and doing its best to give you a head-start on upcoming changes to the warehouse. Now the Review will be available to those outside of Shopster looking for a bit more information about how the company works and what we offer. Look for some awesome updates in the coming weeks as we work on a great new way to get promotions, sales and hot items onto your radar.

Have a great weekend!

Start thinking about Christmas?

Christmas is often the most profitable time of year for all retailers. To fully reach your selling potential during the holiday season you should start planning for it now.

Your business plan for Christmas should consider buying trends, choosing the selling channels you wish to use, revamping your store, and what marketing strategies you want to utilize. You may also want to consider building your brand now so that customers will know and trust you once the holiday season begins.

Buying trends. A key to successful selling during Christmas is to understand buying trends. For example, if you sell electronics and you stocked up on Nintendo Wii’s last Christmas you probably had a very successful holiday season.

To get a better understanding about what products will be hot this season you should conduct some market research. You can conduct market research for free by using Terapeak through Shopster or you can use other sources such as the eBay Marketplace Research tool for a fee.

Choosing a selling channel. To drive sales you may want to choose the selling channel that is most appropriate, either an auction site like eBay or your own store. Often the best results are a product of partnering a couple of sales channels. For example use your auction items to drive customers to your online store.

If you choose to focus on one selling channel keep in mind that during the holiday season last year Shopster retailers sold 73% more products through their online store than through dropshipping. Your online store has great potential to be very successful during the holiday season.

Revamp your store. Changing the look of your store and adding more products during the holiday season can make your store more enticing to customers. A fresh look can create interest in previous customers.

Adding more pages, or updating content, not only entices customers back to your store, but it also increases the probability of a search engine finding your store. The more people that can find your store during the holiday season the more you can sell.

Marketing strategy. It is important to promote and market your online business throughout the year. However, it is especially crucial during the holiday season as you don’t want to miss out on the buying frenzy.

To ensure your store doesn’t get lost in the bunch, and customers think to come to your store first, you should try to come up with two or three unique promotions. Promotions can include sales, coupons, a well designed newsletter, or a focus on items that you know (from your research) will be popular.

You should heavily market your store during this time through Search Engine Optimization tactics, maybe paid advertising if you can afford, or any number of other free tactics that you can find in our education seminars or on the forum.  Remember that it takes time (anywhere from a few days to a couple weeks to months) for search engine spiders to crawl your site, and if you get submitted soon you'll be in the rotation for future updates.

And don’t forget, you should implement all of your ideas prior to December. While last minute shopping, especially from men, is common and can net you a tidy profit, many people begin their Christmas shopping in October and November.

eBay Fees – Two months on

It has been about two months since eBay restructured their fees and, much to chagrin of some sellers, eBay is doing just fine. In fact they are doing so fine that the number of listings on eBay has increased over 12% from this time last year.

There have been several attempts at an eBay boycott in the past, and like those, the most recent one failed. The boycott was in response to the recent fee and policy changes. [While the most recent boycott did fail in overtly hurting eBay's sales figures, one might argue they did succeed in bringing attention to their cause... and that tends to be how improvements get made. - Michael]

While the fee restructuring has received its share of criticism, mostly from low-volume sellers, the new feedback policy has garnered the most attention. Critics say that the new feedback policy, which forbids sellers from giving a negative review to a buyer, will leave sellers vulnerable to negligent bidders and scammers.

While at this time it does not appear that the fee and policy restructuring eBay instituted has had dire consequences for eBay or its sellers, you may want to consider reviewing your business strategy. Every seller is affected by fee restructuring, but you can minimize any negative impact by choosing products with a high margin, increasing your sales volume, or simply being cognizant of how eBay's fee structures play into your profit potential.

Happy selling!

$204 Billion in Internet Sales?

Just a quick blurb: 

The Portland Business Journal reported the National Retail Association prediction of $204 Billion in online sales this year.  That's a jump of 17% from last year's sales figures.  The major verticals getting in on the jump are: Apparel ($26.6 Billion), Computers ($23.9 Billion), and Autos ($19.3 Billion).  Shopster's warehouse sources a wide range of products in each of these verticals.  Consider getting in on these growing markets.

Check out the full article for figures and a small section on the marketing budgets of polled retailers.

eBay BestMatch Hack

Scot Wingo is an opinion leader (and news hound) about all things eBay.  He recently broke the news about greyhat techniques being employed to optimize one's eBay listings via the BestMatch algorithm.

I won't detail Scot's steps and critiques (read his post for that), but we felt it was prudent to alert Shopster's eBay users to the current methods designed to get your listings higher in eBay searches.

The technique basically entails using a tool called "BayEstimator" to optimize the keyword saturation of your listing titles.  The "BayEstimator" is a well-known tool, and Shopster encourages you to check it out.  You simply enter the title you would use for your listing, along with one to three keywords you would use.  I tried it out with "Nintendo Wii Twilight Princess Bundle" (keywords: Nintendo, Wii, Zelda).  I was then presented with a wealth of data:
1.  Title length - how many characters used and how many left.
2.  Keywords selected versus desirability of those keywords.
3.  Buyer search queries matching my item (search query, popularity, availability, BayEstimate).
4.  Keywords buyers like/dislike when searching for my item (keywords vs % desirability)
5.  Categories from which items with my keywords were typically bought.
6.  Global suggested categories.

Nothing greyhat there - this is just great data you can use to optimize your listing titles.  The [ethically] foggy stage is thus:
Using this tool, people were able to figure out part of how the BestMatch algorithm works.  And what they found was that keyword saturation in the title was more effective than initially guessed.  The example Scot brings up is about the placement of ten "NEW"s in a listing title bumping that listing well above where it should be in the listings.  It was found that saturating a listing title with a particular word (multiple instances of the same word) increased the listing's rank in BestMatch.  So, a product title like "NEW NEW Wii NEW 5 Wii Games NEW NEW NEW NEW NEW NEW NEW" ranked very well.  Much better than it should have.

What you should do:
1.  Check out the eBay Research Labs BayEstimator tool:  http://labs.ebay.com/raghavgupta/demoto/to
2.  Follow the simple directions on the BayEstimate page. 
3.  Then, Read Scot Wingo's original article here and judge for yourself whether you'd like to employ the technique he mentions.  It's called a "hack", but that doesn't necessarily mean it's unethical. 

NOTE: Even if you choose not to employ the title keyword saturation technique, BayEstimator is still a great addition to your eBay strategy.

[I know I promised an article on niche selling, but this seemed so much better.  The complementary niche article is still coming, though.  Promise. - Michael]

25% Growth in "Retail - Consumer Goods" Visits

According to my blog schedule, I was supposed to write a post today called "Internet Sales Figures and the Little Guy".  However, I couldn't find decent enough data to warrant a post [more like "couldn't afford the data"].  So, instead this post is about Internet search growth in the "Retail - Consumer Goods" category specified by comScore (the leader in collecting digital information - from whom I've taken all following figures).

Total unique visitors to "Retail - Consumer Goods" sites grew a whopping 25% from December '06 to December '07.  That might not sound super impressive, but consider that 28,829,000 unique visitors is a lot... and that 35,936,000 is way more.  That's how many visitors hit retailer websites in December alone.  Of the estimated 183,619,00 total unique visitors, about 36 million were looking to buy something.  That's promising.

My guess is that many of them wound up on big box sites or branded industry leaders' sites.  However, with growth like that it's not too big a leap to believe that small-to-medium-sized businesses saw a jump in traffic.  That's where your marketing efforts will come in.

Keep two assumptions in mind:
1.  Almost 20% of December's Internet visitors were looking to buy something.
2.  They were probably looking at major sites (re: Pareto principle) [although this assumption is changing in favor of the smaller business per "The Long Tail"]

In order to get in on that growth, you have to do one thing:  Give people a reason to buy from you.

You're going to accomplish that with two higher-level considerations:
1.  Brand your site.
2.  Drive traffic.
3.  Be relevant.

People buy when they recognize and trust the seller.  It's your job to build your brand.  Logo, slogan, color scheme, design, spokesperson/figurehead... these are all things you should be working on customizing to your storefront.  Make your brand memorable.

People can't buy from you if they can't find you.  Get into the search engines.  Optimize your ads for your target audience.  Write site copy that is keyword saturated.  Keep your site copy constantly updated.

People have expectations.  When they come to your site, they're expecting something.  The closer your store is to that expectation, the better.  The products and copy need to be focused and relevant to what a visitor might be looking for.  If it's not, you're wasting money on driving traffic because it will never convert into paying customers.

There you have it.  Internet retail visitation was up 25% from a year ago.  20% of Internet users were looking to buy something.  You stand a great chance on getting in on it if you can give shoppers a reason to buy from you.

Good luck and happy selling!

PS: Read comScore's original press release at: http://www.comscore.com/press/release.asp?press=2043

Neglected Niches

It seems like everyone's selling electronics these days.  From the point of view of a consumer, that's a good thing: It drives down the competitive price for popular products.  To a seller, though, the corollary is true: It drives down the profit margin of popular products.  That means, to be successful, you've got to sell more for less.  For a small-to-medium-sized business, that makes for tough times.

You have two options:
1.  Focus on complementary products.
2.  Find a new niche.

Another post will deal with complementary products [Look forward to Friday, April 11th for that one - Michael].  This post tackles new niches.

I could tell you to get out there and start exploring some options for what to sell... OR I could just tell you what Shopster retailers are neglecting in the warehouse.  The following is a list of well-rounded, profit-potential categories in the Shopster virtual warehouse.  They have a focused product line, a decent fulfillment record, and enough products to justify a dedicated storefront.
1.  Sports Collectibles.  PROS:  You won't find a more avid audience than sports fans.  Every season has a major sporting event.  Collectibles = Great margins.  CONS: Timeliness is a necessity - it's no good marketing Super Bowl products in July.  Relevance - you've got to know what's coming up when so you can have the products featured, and have site content that matches what sports fans are expecting.
2.  Lingerie.  PROS:  Targeted traffic = high conversion.  You're not going to be wasting ad money on as many lost leads.  CONS: Targeted traffic = low visitor volume.  You've really got to make sure your site is optimized to convert that traffic.  [Shopster insider tip: Lingerie, and clothing in general, are what we call "variant product lines".  This means that each product listing has a number of variants on that product.  You only have to add the one product, but get multiples of it.  This means, you actually get more than your 1000 product limit when you sell variant products.]
3.  Electronic Dictionaries.   (Also see Note 2 below.) PROS: High margins.  Highly targeted searches. CONS: Potentially high level of false positive searches (people looking for "online dictionaries").  Just something to consider when it comes to your keywords.
4.  High-End Jewelry.  PROS:  High margins due to enforced Minimum Advertised Pricing structure from suppliers.  Numerous holiday-based sales spikes.  Variant product line.  Tempered, steady non-holiday sales pattern.  CONS: Seasonal buying regulates site messaging.  Non-holiday site traffic may require very active marketing campaigns.

For each of the niches above (and anything, really) here's the gist:
Products don't sell themselves.  That's your job.  You need to be active in driving traffic to your store.  You need to be active in optimizing your storefront to convert visitors to customers.  Constantly update your landing pages (re: your home page).  Constantly update your featured products.  Keep up-to-date with new products and upcoming sales opportunities.

Improve Storefront Marketing With Better Data

In order to optimize your storefront landing pages, you need to know something about the behavior of your visitors.  You can take potshots and hope to hit something, or you can arm yourself with the right data and hit for sure.  Bad analogies aside, you need analytics.

Google Analytics is free, and provides as much information (probably more) than you'll need.  You'll get some script to put into your various pages, and then you log in to your Analytics account to check out your data.

The steps to set it up:
1.  Head to Google Analytics' home page and sign on up for an account.
2.  Once you've gone through the sign-up process, copy the script they give you.
3.  Log in to your Shopster account.
4.  Click the "Edit RShop" tab > Click "RShop Settings" > Click "General Settings".
5.  In the "Visitor Tracking Script" field, paste the Analytics script.
6.  Click the "Save Settings" button.

Now you have the script in place.  It'll take a while for the traffic and associated data to start rolling in.  But, you can monitor that over the next few days.  What the data is going to tell you is where traffic is going and what it's doing there.  Use that data to construct your feature pages to match visitor behavior.

Three things to think about:
1.  Focus content and product placement on what visitors are looking for.  Make your content relevant.
2.  If you see you're getting a lot of drop-off on certain pages, look around those pages for indicators of why traffic isn't stopping there. 
3.  It also gives you the chance to improve your PPC or SEO campaigns.  You'll see how traffic is getting to certain pages.  Then, it's up to you to make those pages convert visitors into customers.

Don't get me wrong:  This isn't a hands-off tactic for improving your storefront marketing.  Work is definitely involved... but then again, you knew that.  Analytics gives you the data you need to make that work worthwhile and useful.