Eric Mindel, the founder behind Peppy Parents and current president of ecommerce consultancy ReturnItUp, dropped by our offices today and gave us a few minutes of his time to talk through his ideas about vision, omnichannel selling, and how to build a path to success. These are great expert strategies.
This interview will energize you as the leader of your business. Check it out. Learn more about how Eric can help your business at ReturnItUp.
Tell us about the challenges of ominchannel selling across web, mobile, and brick and mortar. Is it really worth it?
Omnichannel is a buzzword we’ve been hearing for a few years. In my eyes, it’s all about a convergence of systems so the customer has a consistent experience no matter how they’re engaging a seller. For someone just starting out, it’s much easier to outline that plan and execute thoughtfully on it than it is for the established large company that developed different channels in silos across many years.
Not every channel is right for every seller. Some items are a long-sell requiring depth of product knowledge and a hands-on engagement. So for this type of product, web may serve as lead generation to drive visits to a brick-and-mortar.
Or, if an item is not a commodity product available at a hundred retailers online, there’s a different discussion to be had about the marketplaces on which to sell the product. If the seller is in control of distribution; it may or may not be part of the business plan to get it onto eBay and Amazon.
At the end of the day, every company should be tapping the most promising opportunities to maximize sales. Whether we call that term “omnichannel” or anything else, the company best positioned for growth will be the one that delivers a consistent customer-centric experience no matter how the customer engages the company.
How does Amazon open up opportunities for sellers? In what ways does it threaten sellers?
For any retailers not selling truly unique products, they definitely need an Amazon strategy. The strategy may have some variation from seller to seller.
For consumer goods products not covered under a MAP (minimum advertised price) policy and offered by multiple sellers, the nature of the Amazon marketplace is that pricing will quickly be a race to the bottom among third-party sellers. In my experience, it’s often the case that the lowest price offer does not offer enough margin to have a sustainable plan to compete against it.
For products under MAP, there’s a bit more protection of reasonable margin on Amazon, though there are often sellers who violate the MAP policy by cents or dollars in attempt to win the Buy Box or gain a competitive edge for sales. While this doesn’t necessarily erode margin all that much, it reduces opportunity for sales.
I see many Amazon opportunities for sellers of consumer goods, here are a few that come to mind:
- Use Amazon to help guide product selection based upon a product’s selling rank and market price at retail. For sellers wanting to build out their product categories or introduce new categories, it’s an invaluable resource for quickly narrowing down a list of promising SKUs based upon demand and what a reasonable retail selling price will be.
- Use Amazon to clear out of stale inventory. Tens of millions of daily visitors coupled with bargain prices to get some cash back out of inventory that has been sitting unmoved for months means quick liquidation of the product.
- For products that already perform fairly well on Amazon, do the analysis on how FBA (Fulfillment by Amazon) may bolster performance on these items. Even if a seller has its own warehouse or 3PL provider, keeping 2-weeks’ turn of a SKU in FBA adds free Prime shipping for customers; which may prove to be a winning strategy. Repeat with more and more SKUs; whichever ones pay off with on-going analysis.
- Use Amazon to help build a brand and customer base. If a seller controls distribution of its brand (i.e., not much competition for the same exact item); and there is breadth of product selection that builds long-term customer loyalty, Amazon could be a valuable customer acquisition funnel. A product sold on Amazon could be a break-even or loss leader to gain new customers; as marketing peripherals inserted into the package would provide compelling incentive for the customer to visit the company’s own ecommerce website for future orders. Compare a “break even” on an Amazon sale to acquire that customer to what Google Adwords would cost, and it could be a no brainer.
Tell us about the model you used to build you store. Is it repeatable for other sellers?
I had an ecommerce model that sold premium juvenile products like strollers and car seats. My strategy was to target the mid-to-upper income new parents who were willing to spend for the more innovative, trendy, and perceived safest gear. I focused on MAP protected product lines to help level the playing field against competitors.
My focus was always long-term building of relationships with vendors, which paid off when there were new opportunities or limited stock of hot items.
Because the retail business I started is still operating, now in the hands of new owners, I’m not able to disclose many specifics in strategies.
What’s your advice for sellers in a funk, those trying to take their sales to the next level?
‘Funk’ apparently being more a psychological diagnosis than business term, I think the advice I have for sellers in a funk would be as much personal as professional.
First, there has to be a plan that differentiates from competitors, that is adaptable as needed, and that has promise of success with persistence and good execution.
I’ve talked with many business owners who look at better sales figures from a couple years ago, and they try to do the same thing as two years ago to recreate the success. This is a losing proposition.
I ask sellers, “Why would I buy this from you and not Amazon or a competitor?”
There has to be an immediate, compelling answer to that. If there is no strong answer, there is a lack of vision on where the company is going and why customers will be loyal. Getting to this answer does not cost any cash.
With money, though, the brutal reality is that most small retailers struggle with cash to invest in new website functionality, marketing campaigns, or other strategies that can help build new revenues. And, the brutal reality is that if there is limited resources, many small retailers trust a vendor that doesn’t deliver on the promised positive impact; a painful outcome.
So, I go back to the vision. With a vision, a small retailer is less likely to chase the latest shiny gizmo in social media, advertising, or other internet marketing tactic. A vision helps guide the steps needed to achieve it.
Having that vision helps a team rise above funk. Without the vision, funk is waiting around for every bad sales day or sales month. But saying, “We’ll get there in 6 months because we know where we’re headed” helps enthusiasm and morale.
Most businesses are going to have an ebb and flow. Suffering through the ebb is what produces perseverance; perseverance builds character; and character build hope. So that’s not all bad on a personal level!
Building a business is a lesson in personal and professional growth. The funkless don’t grow nearly as much personally as those of us who stare down funk and find a way to continue!
Check out more of Eric’s thoughts in our Facebook Live Q&A for even more expert strategies.