Below you'll find the transcript for our 9.18.13 Tips for Growth Webinar, featuring Andy Eastes of SkuVault and Tommy Millett of iBuyz and SlimShades.
Transcript:
Danny
Hello everyone. Welcome to the SkuVault webinar. We’re about to begin. Today with us we have Andy, CEO of SkuVault, Inc., Tommy Millett from SlimShades and also iBuyz, and myself, Danny Shaw. We’re going to cover how to prevent mistakes retailers make during the holiday season.
Tip #1: Make sure that your system can handle a huge increase in traffic. This includes your website, backend systems such as inventory systems, order management systems, and channel management. Just make sure they can handle all the holiday traffic and the increase in sales volume.
Tip #2: There’s a lot of debate on whether it’s better to hire temp workers, or to just have your employees work overtime. Personally, we choose employees over temps every time, because your normal workers are already trained and do a proficient job. Temps require training, and if they aren’t trained well (and face it, during peak season, who has the time), they can add to holiday errors.
Tip #3: Make sure you have what you sell and you know where to find it. Pick, pack and ship efficiently. Make sure that you have an up-to-date list of inventory. If you don’t have a system, make sure that spreadsheet’s updated.
Tip #4: Responsive website. The numbers are crazy on how many people are buying from mobile devices – according to research by eMarketer, mobile sales account for 15% of all eCommerce sales in 2013. By 2017, they’re estimated to account for 25%. You want to ensure that if you don’t have an app, you have a mobile-responsive website.
Tip #5: Getting lots of stock is great - if you can sell it. Run sales reports to find out if the stock that you’re going to invest in for holiday season is a wise purchasing decision.
Tip #6: Use data to make purchasing decisions. Look at your past sales to see if the new products you want to carry and the varieties you want to carry are going to be good sellers during the holiday season.
Tip #7: Make sure you make any and all operational changes well before the craziest times of the year, like the holiday season. You need to make sure that you have more efficient picks, that your locations are correct, and that you have an accurate list of inventory.
Tip #8: Discounts. Maybe you want to implement a promo code or a coupon on your website to drive traffic directly to your website from the marketplaces.
Tip #9: Bundling and add-ons. Try to push that sale further any way you can. Offer a $5 gift card with a purchase of $50 or more. Free shipping for orders of at least $100. They key is to get your customers to spend more by creating in them a sense of savings. Go the extra mile by also creating a sense of urgency – maybe have a countdown on your homepage, “Want it before Christmas Eve? 3 days left to order!”
Tip #10: This is key: get your customer service team ready for a massive surge in questions about products, shipping, returns, etc.
We’re going to switch now to Andy for an interview about how to scale your business correctly.
Andy
Hi. How is everyone doing? We have Tommy Millett here from SlimShades and iBuyz. I think we’ll just sort of jump right into it and get him talking here. Tommy, when did you get started selling on the web?
Tommy
I started on eBay back in 2006. The reason I started, I had just graduated from high school in ’05 and needed to look towards the future. I was a full-time student at U of L, and I worked two part-time jobs. I had a job at a golf course getting paid $5.50 an hour, and a job at a gym, I believe it was $7.25 an hour. I was hurting and needed another source of income but didn’t have the time to work at another traditional job.
I bought a book, I believe it was called How to Buy, Sell and Profit on eBay. The guy who wrote the book had sold pool tables, and that kind of inspired me to get involved with eBay. That’s kind of what got me onboard. I created an eBay account there in 2006 and began selling … oh, I guess I have to say I sourced the sunglasses. I actually bought a wholesale list off of eBay to come up with my first supplier for sunglasses.
Andy
I remember those being online.
Tommy
I don’t recommend that, by the way. Most of the list was garbage. I got lucky and did find one supplier and started my business off from there.
Andy
Are you still selling sunglasses?
Tommy
I am. With SlimShades. It’s what I call a micro business. It’s just me running it out of my house, out of my basement. I also work with iBuyz where we deal with, well, we’re a small business that sells closeout goods.
Andy
So iBuyz at this point is a little bit bigger than SlimShades?
Tommy
There’s three of us there. We have a 5,000 square foot warehouse.
Andy
What’s been the hardest thing that’s hindered growing either of those businesses in your opinion?
Tommy
The hardest thing, I think with iBuyz was being able to scale; specifically, scale inventory. We ended up with a warehouse full of inventory and didn’t have a way to organize it. We didn’t have SKUs for anything. We didn’t have locations. We just had a warehouse full of stuff. Because there was only three of us there, we all kind of knew where everything was and got kind of used to it to some degree, knew where stuff was and how to operate, but it just wasn’t really conducive … It worked fine when we were smaller, but as we got more and more inventory, it became more and more of a problem. We started to look like that show The Hoarders. It backed up with stuff and it was just a huge mess. That was probably our biggest obstacle, which we’ve overcome this year, earlier, getting on SkuVault, which has been great for us, by the way.
Now, our biggest issue is just trying to bite down and get within a niche, more of a niche market. We found that clothes are good. We’ve sold all sorts of different things and tested different products. It’s okay. It’s a money generator, the way it’s working now, but it’s not the smartest way to grow a business. It’s Marketing 101 to find your niche and market within that niche, start to build a customer base and build the business from there. That’s kind of what we’re looking into now as far as the obstacle of growth.
Andy
Any idea what product types you’re leaning towards? Your niche?
Tommy
Yeah, we’ve dealt with a lot of the health and beauty stuff, hair products, hair dryers, curling irons, all that type stuff’s not real exciting to us being three dudes running the operation. We’ve also dealt with sports related stuff, quite a bit of that. We’ve dealt with everything, but these are some of the main categories we’ve dealt with. We’re leaning more towards a sports niche and possibly starting out with the NFL. We’ve done really well, and the market’s still doing real well, with NFL gear.
Andy
Have you thought of pursuing both niches and sort of decorating the store front?
Tommy
Yeah, we’ve discussed that, talked about that, and just having basically two different user IDs for the marketplaces, two different websites. Have one parent company and run these various niches underneath that parent company. That is definitely a viable option. We’ve learned to not get overloaded with trying to do more things than we can handle at one time. We figure it’s better off to let iBuyz do its thing for now, and start one niche at a time. We think NFL will be what we start with, but who knows. We’re going to get through the fourth quarter here and then launch new initiatives - should be next year.
Andy
Excellent. You mentioned marketplaces and websites. Where do you see yourself coming from?
Tommy
SlimShades I just operate off of eBay right now. Hopefully that’ll change in the future, but that’s what it is for right now. For iBuyz we’re on several marketplaces. We’re on eBay, Amazon, Sears.com, and Buy.com.
Andy
eBay, Amazon, Sears, and Buy.
Tommy
Yup.
Andy
All right. Very good. Do any one of those dominate as the major player as eBay or Amazon?
Tommy
No. We don’t really do much on Sears or Buy. We recently got on there and don’t have as much activity. With the goods we have, we haven’t seen much activity in the marketplaces. The one way we’re different, and maybe this is because we started out as kind of our bread and butter, but we do more business off of eBay than Amazon. I know that’s kind of not typical. You talk with people on forums and other people and the eCommerce isn’t too good and they tend to be kind of against eBay and eBay’s in a decline and that they do most of their sales on Amazon. We’re kind of the opposite. We know there’s a big window for us to grow in Amazon. We’re still trying to tap into that and getting better, but still do most of our business on eBay.
Andy
How do you manage the listings and quantities between all these different marketplaces and channels?
Tommy
Listings, one of our employees, Todd, he developed a little application that generates spreadsheets for the marketplaces. We’ll use this when we have mass listings to do. On just a listing by listing basis, for eBay I use a basic lister called inkFrog. It’s just a little program, it’s a dime a dozen. There’s a bunch of these types of listers out there. It’s just the one we used, and it’s easy. For big lists, when we get a whole lot of products in and need to list a whole lot of things at once, the spreadsheets are the way to go.
Andy
Why do you think Amazon hasn’t seen the growth that eBay has for you all?
Tommy
Honestly, it could be a number of factors. It could just be that we … I think that we just know a lot more about eBay than we do Amazon. We’ve been doing eBay for a long time. We know how to be successful in that marketplace. Amazon is … We’ve been on Amazon for awhile, but it’s always been a smaller part of our business. We just need to learn more about it and get better with it. It could either be that or it could be the types of products we’re dealing with. I’m not really sure, but we definitely do better on eBay.
Andy
When you’re going to do your sourcing, are you using marketplace research to help make decisions, or just sort of, hey, I think this will sell, I can get it for a decent price, let’s try it out?
Tommy
We do marketplace research. Because we deal in closeout goods we’re constantly getting hounded by suppliers about various deals and all sorts of closeout stuff going on. We always do research before we make a buy because we have been burned in the past just because something seems like a good deal on the outside, it’s doesn’t always mean it is. Because we think it’s a good deal … You’ve got to do the research. You’ve got to look at the data and follow the data. Don’t follow what you think. Divorce yourself from the product. Just because you like a product or you think it’s good, it doesn’t mean anything. Look at the data.
Andy
I agree. I love data. What do you do when you do make a mass purchase? How do you give it a …?
Tommy
Sometimes we take a loss and that’s just part of it. We try not to do that too often [laughs]. One of our eBay strategies for buying bad products is running auctions. They seem to be pretty successful, running auctions, it moves stuff, gets visibility, even if we list the stuff for less than our Buy It Now price.
Andy
Right. You do a lot of closeouts. Does that mean you can’t reorder products or do you have some lines you can reorder?
Tommy
Some of our stuff we can reorder, but the majority of it is just a one-time deal.
Andy
On ones you can reorder, how do you decide when and how much to reorder?
Tommy
We run reports through SkuVault. We check out our sales reports in there and we can kind of gauge, “how much of this product did we sell last month?” We’re out now, okay we’re selling say 20 pieces a month, so we want to be good for three months, let’s get 60 pieces in. We use our past sales data to determine what we order.
Andy
That’s generated from all your sales - you’re looking at all that in one elevated report?
Tommy
Correct. Yeah, it all goes back into SkuVault so we can get an overview snapshot of everything.
Andy
Other than SkuVault and the marketplaces, what other systems are you using right now? Any repricing software or anything like that?
Tommy
For Amazon, we use a repricing software. And another one - I believe Todd is the one that deals with that, so I don’t know too much about it. It’s called Appeagle and it does what we need it to do. As far as our shipping software, we use an application called Teapplix which I highly recommend. We’ve been on Teapplix for several years and it’s been great for the way we do things.
I know not everybody batch prints the labels, but we prefer to batch print all our labels first thing in the morning and then ship them out from there. Every label has an invoice with it that prints with it that shows what needs to go with it. It’s just been great. It’s a cost-effective solution. It’s never let us down, except for peak season. It can get bogged down. You want to avoid printing labels on Teapplix on peak hours. If you come in Monday morning, you better print your labels early in the AM before people come in or it gets a little bogged down. Maybe they’ll fix that this year, but that’s my only complaint with Teapplix.
Andy
Now, I know a lot of people do the batch printing of the labels. I am a supporter of single printing, myself. Maybe the pros and cons of that would be good to discuss. One of the big things, problems, is when you print them and those shipping platforms mark as shipped at that point.
Tommy
Right. As soon as they’re printed they’re marked as shipped on Teapplix. Teapplix kicks out notifications to marketplaces and uploads all the tracking data, so they’re …
Andy
Right, which is very cool. But, my only problem with that is I say, okay, if I’m a worker, you printed them out Monday morning, I come in, I’m tired, whatever, don’t feel like doing it and I throw half of those orders away, when will you realize it?
Tommy
Right. That’s funny you ask that. That’s actually been a problem brought up in the past. Not that exact scenario, but just a few weeks ago we had a few orders that just failed to print. We batch printed 100 orders and then for whatever reason, it almost never does this, I’m not sure why, but it didn’t print out the last two or three orders. We didn’t find out about that until the customers contacted us.
Andy
That’s the only big thing I hate about the batch printing. I understand especially in peak season you’ve just got to get them out. A lot of people like to use those invoices as pick lists, which that’s what you all do, right?
Tommy
Yeah. We have it set up so a label prints out right after, immediately after the shipping label, an invoice prints out right there in the 4x6 printer.
Andy
You just keep them together.
Tommy
Right, so the invoice stays attached to the label and then the invoice has the buyer’s name on it, so if there’re every any questions, it’s all right there.
Andy
How are those sorted?
Tommy
We sort them by location, which is actually really beneficial there. We print the labels based on the SkuVault location. Then we save a lot of time whereas I told you how our warehouse used to be we’d have things everywhere, so we’d be walking all over the warehouse pulling stuff. Now it’s the way they print out. We have two shipping carts. We keep one at the shipping area with the packers packing the loaded cart, and then the picker takes the other cart. It all snakes around the warehouse in order. Since the locations print in out in order, you’re picking in order. There’s a lot less foot traffic. It’s a lot more efficient. There’s a lot of time saving between having to walk around the warehouse and pull products. You’re pulling them all in a certain order.
Andy
Do you ever have issues with labels getting mixed up or confused? I have all these labels sitting on products on a table ready to be shipped … could I accidentally send the wrong item out to the wrong person because the labels got mixed up?
Tommy
I can see that being an issue, but since we’re a small business, we’re all pretty apt to check. I check them as I’m picking. Todd, our factory, he checks them as he’s packing, so they get double-checked. I can see how that is going to be an issue … If - and we will at some point, since we almost need it now – we need to hire some lower level employees to do shipping, just hourly employees; That’s where that’s going to become an issue.
Andy
Tell me about inventory issues. What were the biggest inventory issues you have besides just not being able to find stuff? I remember I first walked into your warehouse and I pointed at something and I said, “Can you tell me how much this costs?”
Tommy
Costing is one thing, we’d have product in there, we’d have to look through all our old invoices to get our product costs. A lot of the stuff we just know off the top of our head. Another issue with inventory is oversells. We’d always have to do physical counts in the warehouse and adjust the quantities for marketplaces, and so we’d get quite a few oversells. That was somewhat of an issue. Most buyers are understanding if you have an oversell. Send them a message, I apologize, this is the refund, and we’d like to offer you 25% on another item. Most buyers are okay, well… depends on the time of year. Fourth quarter they kind of get agitated if it was a gift, all that stuff. That was a problem with us before we got on SkuVault.
Andy
Is there anything big you push during the holidays to make people feel more comfortable that yes, you’ll get your right item, and you’ll get it on time before Christmas, or anything like that on the marketing end?
Tommy
Like a guarantee?
Andy
A guarantee or just something to even make them feel better about it.
Tommy
We haven’t done that, but that’s probably a good idea. We should.
Andy
I know I’ve been reading some stuff and Danny mentioned it in the top ten mistakes that you want people to know that hey, I am aware that it’s the holidays, and I’m aware that you’re ordering this for a gift, so I will do my best to make sure you get everything you need on time with the right item and the quantity of it.
Tommy
We haven’t put any guarantee out there, but we are aware of that and we do try to do that. It’s funny, 2011 we actually, we had some gloves, some $5 gloves on eBay’s daily deals. This was back when the daily deals were structured a little different, and we got hit real hard on eBay. We came in and had in one day’s time over 2,000 shipments. This is a lot for us. I know some businesses are bigger and it wouldn’t be much, but this is three guys trying to ship 2,000 packages in a day. Needless to say, we were overwhelmed and we actually had to … this is something you almost never want to do … but we were so overwhelmed there and we wanted to meet customer expectations, we shut down our eBay store for a day. We wanted to shut it down and just close off sales so we could meet those orders.
Andy
In order to fulfill those, yeah. ... So that’s good that you do that for your customers, but it’s bad for business.
Tommy
I never wanted to have to shut down our eBay store. We were cringing when we did that, but we also definitely want to look after our customers and we wanted to get packages out on time. That was a day from hell trying to ship out all those packages.
Andy
How do you push people to the website? Without giving away too many details, about eBay, specifically about their rules and everything like that, but do you do any email marketing, or …?
Tommy
With iBuyz, our website, we never really do, we do have a website but it’s more for our suppliers. We didn’t really develop an eCommerce site because of the nature of the products. Kind of what I was getting at before. We’re dealing with so many different random products at iBuyz, it didn’t … It works well in the marketplaces. We can plug in where the markets exist, but as far as branding a niche and making sense in the customers’ eyes, it didn’t make sense for us to create an eCommerce site there. With our website, it’s just informational. With that said, we do hope to develop a niche or niches in the future and have a site to where we could really direct and push traffic from there. As far as how to do that, that would be a question for Todd. He’s our SEO master there.
Andy
All right. Next thing I would ask would be sort of, if you had to focus and narrow it down to three big things you want to do to really push the business to the next level, what would those be?
Tommy
Three main things. Let’s see. For iBuyz … Are you referencing iBuyz?
Andy
Either company.
Tommy
Either one. iBuyz it would be, like I already covered, we need to come up with a niche, start with one, potentially branch off into others. With that niche, we’ll need to fill out the product category more. That’d be number two. Source more products within the niche. Number three would be to just expand into more marketplaces, I guess, and do more on Amazon. Like I said, I know we’re, just from discussions with other people, we’re lacking on Amazon. We need to look into that more and do more business on Amazon. I know Amazon is the emerging marketplace. Who knows, in five or ten years eBay may be nonexistent or it may be going out. The way things are going, who knows what’ll happen. Amazon is the top dog in the marketplaces right now and I think it’ll stay that way.
Andy
Do you offer international shipping?
Tommy
We do. We do offer international shipping.
Andy
Do you know what percentage is international?
Tommy
A very small percentage goes international. I would say maybe 4% or 5% is international.
Andy
That might be a big place to focus on.
Tommy
Focus on international business, yeah. That would be another thing with marketplace expansion. I know eBay has got various sites dedicated to different countries, like the UK, and Canada.
Andy
They’ve got that new Cross-Border trade program as well, which looks pretty interesting.
Tommy
The GSP with local shipping program?
Andy
Yeah, that’s part of it.
Tommy
We haven’t tried that but I’ve read about it. We have to be out there. Not only be out there, but be able to manage it all. That’s another issue we’ve tried to overcome. Juggling products between marketplaces to where … It’s fine, normally we buy stuff in bulk, so the beginning is fine. It’s just when we get down to the last, you know, three units and we’re in four marketplaces and things start selling kind of fiendishly especially going into the fourth quarter, so I know ChannelAdvisor is the well known source to handle something like that with juggling and product lifting, the various marketplaces. We don’t feel that we’re in a position to hit ChannelAdvisor right now. We’re looking for another solution there, at least for now.
Andy
With that, you’re basically just doing, once or twice a day, saying, hey, I want to see all my items that have had sales with the new total available is under X, maybe say three, and then you’re going in and allocating two to eBay and one to Amazon, zero to Sears or whatever.
Tommy
Right. There’s a transaction history board in SkuVault, which is actually a lot easier than what we used to do. We used to actually do physical inventory counts and just kind of monitor as we picked, or worst-case scenario, correct it after we oversold. It’s helped with that. Another feature in SkuVault that we’ve kind of utilized a kind of a double-check: We look at sales reports and we also have programmed reorder points so it’ll alert us when…
Andy
When you need to reorder.
Tommy
It alerts us when we need to reorder, exactly. You can set up specific reorder points for items. For instance, if we have 500 of something we may want to be notified when we get down to 50 units or … It depends on how marketable the product is.
Andy
Vendor lead times and all of that.
Tommy
If we have five of something we may want to be notified when we get down to one if it’s something that we don’t sell very often, like twice a month.
Andy
Have you ever run into a situation where it says hey, yeah, reorder this from this reorder point you put in when you first started carrying this product and then you notice like, okay, yeah, I’ve sold a bunch but maybe the profit margin isn’t’ there or maybe my markup’s not high enough. Do I really want to reorder it? Just because I’m selling it doesn’t mean I want to keep stuff.
Tommy
Exactly. Like you said, what we do with iBuyz and sometimes we have to sell them at a loss. Sometimes we sell them through auctions. That is crucial. We do monitor. Just because it comes up to reorder doesn’t mean we automatically do it.
Andy
So you sort of look at the reorder report with a grain of salt.
Tommy
Yeah.
Andy
Yeah, I can reorder and sell it, but am I making money?
Tommy
We review the reorder report as kind of a safety net. Not necessarily a reorder but just a, hey, giving the heads-up, we’re running low on the site and we’ll check it out. Do we need more? A lot of stuff that we do reorder it’s just a no-brainer. We know what sells.
Andy
Do you know what your turn is in a year?
Tommy
Inventory turn? I can’t tell you. I know we’re sitting on stuff. We’re sitting heavy on inventory. We need to move through a lot of … That’s one of our goals for this fourth quarter. Go through a lot of our older goods and then to rebrand it to a niche, beginning next year, and kind of run that simultaneously with iBuyz, a niche in iBuyz, and then down the road maybe delve into some other niches. The niche market is the way to go.
Andy
So you do plan to stay on the e-commerce space and really focus on growing that?
Tommy
Absolutely. Yeah. Absolutely.
Andy
Do you have any specific areas of eCommerce that you think you want to dive into?
Tommy
I’d love to learn more about using the marketplaces to drive traffic to a website. We know we want a site at iBuyz, once we develop a niche. I’m trying to developing a site for SlimShades for sunglasses. The marketplaces are doing something in this day and age that’s really neat. You can start a business within the marketplace, and you can use those marketplaces, within their rules and parameters, you don’t want to go and blasting messages on eBay, but you can use the marketplaces to generate customers and trusted, the customers trust you, and then they’ll go back to your website. That’s the end goal, pull those customers back to your website. I think even larger companies are using marketplaces, not in the same way, not to develop their business, they’ve already developed it themselves, but they’re using the marketplaces to expand their business, so …
Andy
Right.
Tommy
Getting on there to expand it, so they know … what they are, are ready-made marketplaces. Whether you’re a small business and you want to tap in and get your business kicked off and started, you get a solution for that, or if you’re a large business it’s a solution to get in and really expand your market.
Andy
I think Under Armour has done a great job on the marketplace. They’re a good example to sort of look to on that.
Tommy
I think the bigger companies are slower to integrate to the marketplaces. I think they see some of the fees incorporated with it and it probably makes them cringe, but it really is a good idea to be everywhere possible online because that’s the way it’s going. I can’t imagine where eCommerce is going to be in ten years from now.
Andy
I think you’re right, and it’s only going to keep growing. Well, I think we’ll wrap it up on that note. I just want to say thanks for coming in and talking to us, Tommy. Tommy’s based in Louisville, Kentucky, as are we, and iBuyz and SlimShades were some of the first companies on SkuVault, so we really appreciate the support there.
Tommy
Happy customer’s right here.
Andy
There you go. Very good to hear. We try. Thanks everyone for joining us. Look for our next webinar and contact us if you have any questions.
Danny
Thanks everyone. Have a good day.
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