The Entrepreneur Highway Part 7

Small Budget Business: Can you really have too much of a good thing?

You’re an honest to goodness online business now and you’ve got the license hanging on your wall to prove it. Wholesalers have been winnowed down to just the right merchandise you want to showcase in your brand new e-store.

Long hours have been invested in creating a selling identity, procedures, terms, and web pages that let potential buyers know who you are, what you’re offering, and how you plan to make their shopping experience as pleasant as possible.

Whether you sell directly through your own website or on one of the large e-market sites like eBay or Amazon, having a small inventory budget means making the most of the products you do decide to sell. The more polished your listings, terms, and service, the bigger and more professional your business often appears. And unlike a brick and mortar business there’s no need to invest thousands to fill up your online store to begin with.

When you’ve finally decided on a specific product or line of merchandise, proceed slowly with samples, less expensive styles, a small selection of colors or sizes. Starting with minimum wholesale orders lets you see how buyers will respond to the merchandise and your style of listing. Smaller quantities also gives you easier control for testing and tracking which items sell quickly, how long listings remain active before making a sale, if at all, or which items become popular and have buyers asking for more.

But remember, it’s not just the products you have to work into your inventory budget. It’s also the shipping materials like boxes, bubble mailers, protective wrap, and packing tape. Most local office supply businesses will have what you need to begin. However, when the time comes to increase your stock you’ll need to find a reliable supply company that offers a lower cost per unit on larger orders. If you can’t pick up your supplies nearby when you need them, don’t forget to consider shipping costs and delivery time when selecting an out of town supplier.

Now that you’re ready to start showcasing all those great products, there are a couple of things to keep in mind when listing your merchandise.

Flooding your web pages or listings with every size, color, and style of each model you have available is a waste of time and money. If you have identical items, provide photos of one, along with a clear description, the number of multiples available, and the price per unit. If you have matching items but in different colors, simply list one of each color as a visual, along with the multiples available and the price per unit.

Another simplified point to think about is pricing. Consider all the online sellers with the same or similar stock as your own. If each seller dropped their price lower than everybody else to attract more buyers, soon you would have rock bottom prices with buyers grabbing up bargains and sellers not making any money for new stock and the whole market dries up and nobody wins.

Be competitive with your pricing. You can only price so low before you stop making money and selling is no longer worth your time and effort. Not to mention quickly sending you into bankruptcy. By virtue of having a non brick and mortar store you basically need to cover the cost of goods, shipping materials, your time or employee’s time, plus a margin of profit.

There are other ways to attract buyers to your store that doesn’t cost a penny or mean a compromise on prices. Trust is earned slowly by proving with each sale that you are a professional with quality web pages or listings that buyers can turned to for all the information they need or get answers to questions in a timely manner; you have quality merchandise that you stand behind with either warranties or buyer recourse should something go wrong; and you offer quality service that lets the buyer know exactly what’s happening with their purchase and that it arrives in pristine condition.

So what do you do when the time comes to reorder stock? You might be thinking how hard can it be? Whatever sold will be reordered. The answer is yes and no. The strategy changes when analyzing numbers for different holidays or summer vacation time or those barren early few months of any new year. Do you stay with the tried and true? Or will you carefully follow all the trends and fads and spend a substantial amount of time checking into blogs and social media sites to pick up insight to all the latest and greatest?

To make the most of your budget dollars you need to study the facts of your inventory and listen to your instincts. Experimentation is always needed to expand and help keep buyers anticipating and coming back. Just go slowly with small quantities until the product either proves itself a seller or a dismal disappointment.

The way to get those facts about your business is by analyzing sales numbers, cost breakdown, site visits, titles and keyword usage, to name just a few. You need up-to-date facts and figures available to accurately put together a merchandise reorder.

The best way to record all this information is by using a spreadsheet. Yes, it’s time consuming at first, some would even say boring. But creating some simple spreadsheets for an Inventory Wish List, Stock Pricing, Cost Breakdown, even a Stock Reorder Sheet will save you hours of poring over months of sales receipts and scraps of paper to figure out what’s been selling, if there’s a bit of profit to try something new, or not worth re-investing in. Wouldn’t you like to know how individual items sold per month? What product sold the most, what day of the week your site gets the most visits, or the optimum time for offering sales or introducing new products?

As you streamline your merchandise or expand to carry more variety, you’ll discover what information is important to you and your inventory budget. Print out what you need so you don’t always have to be at the computer to find the answer. You’ll be surprised how often you’ll be referring to these simple, easy to read reports, or adjusting the data and columns to show exactly what’s necessary to at least make an informed decision. Because now again it will happen and the stock you select will be the wrong choice. But the loss should be minimal and considered more of a learning experience than a failure. Sometimes there’s just no accounting for what becomes a top seller or a basement dud.

Get in the habit of using the spreadsheet filters to manipulate the data to see how your business is doing by product, by sales, by high or low volume. A few minutes gathering and inputting data every week into your spreadsheets will give you the heart of your business in the palm of your hand. Now that much profitable information will never be too much of a good thing.

I’m an online entrepreneur. How about you?