I was out letting myself be distracted by Facebook the other day and I saw a post where the person asked what did I wish I had known my first selling season? I jotted off a note about never buy Justin Bieber anything ever again (never! I’m haunted by singing toothbrushes!), but it got me thinking. In all seriousness, here’s what I wish I’d learned sooner:
- Take more risks
- Buy deeper
- Invest in my winners
- Plan to be tired
- Get help
- Have a plan
- Reprice more often
My first year, I didn’t start buying toys until the first week of December. While I was dazzled by the possibilities, I was also timid. I had so few dollars to invest and I was afraid of making a mistake. I had no idea what a good rank was. When Chris Green convinced me to buy a Dipping Dots toy that was ranked around 80,000 I had no clue if that was good or what (yes, it’s good!). I had a lot of internal anxiety because I did not know what I did not know. To spread out my risk, I was buying a small amount of a wide variety of inventory. I had DVDs, toys, electronics and I didn’t know much about any of those categories. I wish I hadn’t been quite so afraid. This is not to say that I endorse risky gambling-like behavior, simply that I realize looking back that I constrained myself unnecessarily.
Part of my fear was spending money on inventory. When I was buying books, I’d spend no more than $2 per unit so if it was a failure I hadn’t lost much. The Dipping Dots was priced around $20. I was selling it for $79 BUT only because Chris was. I was still at the phase where I couldn’t believe people would pay that much. Even after they did and I was buying more Dipping Dots, I didn’t quite believe it. I waited for a barrage of returns…that never came. It is funny now to think of $20 being a big investment but it was my reality back then. Intellectually it is obvious that buying fewer items with more margin and return is easier and faster money making than lots of small, cheap items for a small return, but emotionally it is not.
At the time I didn’t have the confidence in myself to buy deep. I would literally wait for something to sell and then go buy more and send it in. This is a safer way to go, but I missed out on a lot of possible sales and sometimes when I went back out, the product was sold out. My first year could have been a lot better if I’d had lots of inventory at the warehouse ready to sell.
Because of the way I was buying toys (mostly), it was hard to invest in my winners. By the time I went back, a lot of them were gone. So even though I can tell you that Dipping Dots sold well in 2010 and 2011, it was hit or miss to find them. I had to go to a lot of Big Lots stores in the Metroplex. I wish I’d bought a lot of them up front. Also, I wasn’t really sure what my winners were that first year. I had toys that sold fast and I had toys that sold for a high margin, I was slow to identify those that sold fast and had a high margin. I am much more analytical now.
Plan to be tired. This could be a life lesson and not just a fourth quarter lesson! Still, I was really tired. I worked my day job during the day, scouted and packed inventory at night. I was a zombie and I didn’t have my systems in place to help keep things rolling. Now I plan to be tired all the time – for meal planning and everything else. I ask myself what I could do now when I had energy to prepare for the fact that I was going to be really tired later. How was I going to get through it? How was I going to feed the family without relying on expensive fast food? And not just physically tired from standing on concrete for hours on end, but also mentally exhausted from all the scans and the math in my head.
And then there is the lifting of all the bags and stuffing things in your car and then unloading at home. The physicality of it all adds up. At the end of the day you think “why am I so tired?” right before you pass out. It is because of all those things. The advice I would give my younger self is to take some time off. To recharge and to spend time with my family during the holidays so I don’t resent what I’m doing. Shop during the day if you can, spend time with the family at night. Back then, I couldn’t do that, but I can now.
This leads into get help.
Besides unloading the car, I didn’t initially ask my family to help me much. I saw this as my job and I did it alone. I was really tired and it seemed overwhelming to try and teach what I was doing to them so I did it myself. You have no idea what I’m talking about? Hah, hah, hah! Necessity taught me to give that up. My family knows now that fourth quarter it is all hands on deck. They lift, weigh, de-sticker, polybag…whatever I need. We turn on the TV, and sit in the living room with our Scotty Peelers and polybags.
I’ve also got an assistant who comes in about 10 hours a week to list and pack boxes for me. Having help makes it bearable and much better for me. Even so, I know I’ll be tired and I’ll need a strategic plan or else I end up eating a bag of Cheetos and a Cadbury Egg for dinner – bad. I will often pack a lunch and keep it in a cooler bag in my car. I bring water so I don’t have to buy it, etc. It is worth taking time in the morning to plan because when I return home with my batteries spent (all of them – phone, Scanfob, back-up battery and me!), I won’t have the mental wattage to light a candle let alone cook dinner. Even so, I find my planning slips during this time of year. It is just a busy, exhausting time (see aforementioned Cheeto and Egg dinner…).
Now when I prepare for the holidays I think about what I want to sell and where I want to spend my money. While this may seem obvious to many of you, I will confess I was pretty opportunistic (still am sometimes) in the beginning. I’d see something in a store that was a good deal and I’d buy it without necessarily thinking about where it fits in with the rest of my inventory. The first year I sold appliances I had to buy a bunch of boxes in bigger sizes. Not a big deal, but something that was unplanned and required extra effort. Over the years I’ve gotten a good feel for where my margins and fast turnover sales are. I’m still on a budget so I’m choosy about the deals I take. I’m set up for food, health & beauty, bedding, toys, appliances and books box-wise so if I wanted something much bigger or smaller, I’d have to think about it now because of the extra effort, costs, etc. I don’t sell very many toys. I don’t like all the fierce competition and the narrow margins. I would rather sell baby spoons than Baby Alive.
I’ve had folks ask me for weeks whether or not I was going to shop on Black Friday. I have done so before, but I’m not sure if I will this year or not. I like to spend Thanksgiving week with my family. The kids are all out of school. It is also my anniversary on the 25th. Tom and I like to get away for the days after Thanksgiving when we can. Usually everyone usually passes out Thanksgiving night which can be a good shopping time for me. Given all the insanity of door busters, etc., I won’t camp out or shove my way in the first hour or so.
It is not worth it to me. If I have a plan as to where I’m shopping and what I want to buy, then I’ll get help. It is great to have someone standing in line while I’m shopping and for my husband to take my packages home while I start on the next store (we only have a Hyundai Sonata).
A lot of times, the things that I’m buying are not the door busters. I can’t sell a TV on Amazon and if the DVD is $X price at Walmart on sale, it is probably the same price on Amazon and everywhere else. While the price will probably go up again after the weekend, you’ve probably noticed I’m risk adverse. My money is usually made on the not specifically advertised sales and the regularly low priced items. While lunatics are clawing each other’s eyes out in toys or electronics, I’m scanning somewhere else. My mild ochlophobia can really play hell with me on Black Friday or even just in stores with narrow aisles.
I’ve been known to run panic-stricken from a Macy’s to the relative safety of the crowded city streets outside. All this is to say, I’m careful on Black Friday. I want to get great deals but I’m willing to wait until the crowds thin and take my chances.
One year we were out of town but, being the scouting addict that I am, I slipped into a Big Lots about 9:00 PM on Black Friday – long after the hordes were gone. I ended up making about $1,000 off the things I picked up and was able to cram into our car (which had luggage and stuff in it already). My husband is very patient and understanding man which is why we’ve been married for 20 years.
In this past example and probably for this year, I am not doing what I would call “serious” shopping on Black Friday. I’ve spent most of my inventory dollars to get stuff to the warehouse by Nov. 21. That’s a choice I make. Some people save more of their money and shop hard during the sales. My dad and his wife were standing in line at their local Toys R Us at 2:00 a.m. one Thanksgiving night because his strategy depended on buying toys on deep discount. He told me it was a real beating. He got some great stuff, but he wasn’t sure it was worth it to be up so late in the crowds waiting in line over an hour to check out. What matters isn’t whether or not you shop Black Friday; it is whether or not you have a plan. If all your inventory is up at the warehouse and you are out of money, go play with your family and don’t worry about it. It is not the end-all be-all for sourcing. It IS the kick off for selling, though, so be prepared. I’m working 12+ hour days right now, 6-7 days a week so I can have a lot of inventory at the warehouse by Nov. 21ish. I will slow down after that. I take the week after Christmas off completely every year. [P.S. I usually only blog once or twice in December, FYI.]
I’ve also done some online shopping for Black Friday. While I love that I don’t have to leave the house and possibly panic in crowds, I don’t like shopping online as much. I already spend a huge part of my business life sitting on my butt in front of a screen and I get tired of it. I like seeing the products myself. It seems faster to me than surfing the internet although I may have to change that point of view once I start doing online arbitrage the way Chris does.
My past experiences with OA have been a mixed bag. Every shipment I’ve ever gotten from TRU, for example, was beat to death and I had to return units because I couldn’t resell them.
After the third time, I stopped looking at TRU. Walmart and Sam’s Club were fine online in terms of box condition, but I didn’t always make the best choices and I still had to do the walk of shame at the store. Some of the products I ordered online took a really long time to sell.
I know this doesn’t make sense does it? I mean a product is a product. I’m still making the decisions. I’m just overall happier with my results when I find the item and put it into the cart myself. I’m very much aware that emotion plays a huge role in my success as a seller and emotion has nothing to do with logic and analysis. Finding the balance between emotional happiness/security and emotion-less analysis of your inventory and business is part of being successful as a business owner…but I digress.
Be aware that emotion plays a huge role in your pricing. In a moment of calm, think about yourself and how your emotions – particularly fear – might affect your decision making. For example, I’m always somewhat disappointed when I can’t get my price for an item. This is normal (I think), but it can be a problem is if I let that fear of disappointment keep me from repricing when I should, which means it may take a long, long time for me to sell my item. On the flip side, some people are so afraid that they’ll never get their price that they drop their prices unnecessarily and plunge to the bottom sparking the price war they were afraid of in the first place.
What helps me is to think about my pricing beforehand. I think about the lowest I’m willing to go before I’d hold and wait for the lowballers to sell out. This way when the time comes to reprice, I’ve already decided two things: 1) I’m willing to reprice and 2) how low I’ll go. Then I try not to let fear get the better of me. That becomes a lot easier after you have some experience under your belt.
Make sure that part of your plan is repricing pretty much every day, sometimes several times a day. This is particularly true if you sell toys, but everything is freakishly competitive this time of year. If you don’t check your inventory regularly, someone could start a race to the bottom and you don’t realize it until after the price has tanked. If you’d known it was going down, you could have reduced your price and sold your inventory before it plunged to the floor. This is my first year using Feedvisor and I’m really excited because I know I won’t miss out on price fluctuations and that my price will be competitive all the time without me having to constantly adjust my prices. Feedvisor lets me set my floor and ceiling in advance when I’m in analytic mode. It is such a relief! If you missed my blog post on Feedvisor, click on the link to learn more. My first year I didn’t reprice nearly as often as I should have. Plus, I was doing everything manually. My mind that year equated repricing with pain and it hampered me. I could have sold a lot more that first year if I’d had a system.
I have no regrets one way or the other when it comes to Black Friday. The years I did it, the years I didn’t all worked out fine for me. Ultimately it gets down to you, your stamina and your desire. There are some people who LOVE Black Friday anyway and have made it a family tradition for years long before they were Amazon sellers. They are going to go out there and make BF their…itch. More power to them. They will be glad they did. Others will stay home and surf online for deals. They will be glad they did. Still others will be at home putting up their Christmas tree because they sent in all the inventory they could buy the week before. They will be glad they did.
While it would have been great to know back then what I know now, the fact is I didn’t and I still did OK. Everything I learn helps me.
Every year gets better and better.
I’m doing the best I can and it pleases me. Keep that in mind and be kind to yourself. Don’t hold on to your ghosts of fourth quarter past.
The present is the best place to be. Choose your flavor of happy this year, my friends. Don’t forget to buy presents for your family (you laugh but…) and enjoy them, too.