Small Business Blog

« November 2006 | Main | January 2007 »

December 2006 Archives

December 5, 2006

Shop Girl

headerblue2

One of the fun things about working online is the ease with which you can add and subtract content. At the drop of a hat I can cut a feature that isn't working ("d*s snaps") and add one that does ("mini-trends"). The internet's ability to change quickly also works to the advantage of someone as antsy as myself. I tend to get bored with websites (especially my own) faster than I'd like so I appreciate being able to get a new venture up and running relatively quickly. One of those ventures was the D*S Shop. Running the shop has been one of the most challenging things I've done yet, but thankfully I've found some great online resources (and people) to help me get my footing along the way. Since so many readers are running small businesses and considering starting their own shops I thought it might be helpful to share some tips and talk about the day-to-day reality of running an online shop.

[One quick note before we get started: the D*S shop is a non-profit shop in the sense that I've opted not to take any of the proceeds from the shop's sales. I chose to give the designers 100% of their proceeds and sell advertising on the shop to cover the cost of taxes and fees. That said, I still deal with all the day-to-day details like orders, credit cards, inventory, shipping, customer service and finances like any other shop.]

My shop was inspired by stores like Tiny Showcase, Etsy, Sodafine, Rare Device and Relish. Seeing relatively young people (especially young women) running their own shops and managing to stay above water was something that kept me going when I decided to take the leap. Tiny Showcase was the main influence behind the format of the shop: independent designers, affordable prices, limited editions and giving back. I knew it would be important to me to give back in some way (which is why I donate a percentage of the shop's ad revenue to a different charity every month) and let the designers keep as much of their money as possible. So I sat down and asked myself the following questions:

1. Why am I doing this and will this serve some purpose for my readers and the community at large?
2. How will I cover the costs without taking money from the designers?
3. How much time will this take and how will I manage responsibilities on my own?

I didn't know the answers right away so the first thing I did was talk to people around me. I called up friends and readers who ran shops and asked them what they wish someone had told them before they started a shop. The answers I heard most were:

1. Make sure you have enough money to cover starting costs. It's expensive to invest in the initial design, photography, materials, shipping, etc.
2. Make sure you speak with a financial advisor about taxes and regulations. California and NY especially.
3. When in doubt, have customers sign or agree to a policy that protects you from unfair lawsuits or charges.
4. Know when to ask for help.

I took all of this into account and in the meantime emailed designers I'd met through my site to see if they'd like to be a part of the shop. Once I had about 40 designers lined up (with 6 designers showing a month), I knew it was time to get the ball rolling. It was at this point that I remembered number four above: know when to ask for help.

Up until now I'd done most everything concerning my site entirely on my own. No interns. No employees. A control freak by nature, the idea of giving someone access to my passwords, content, etc. was terrifying. But part of running something bigger than I'd done before was recognizing I couldn't do it on my own. So I turned to a graphic designer named Kate Klapfish.

I'd worked with Kate before to help with some coding issues so I knew she would be great to work with. Thankfully she understood the plight of the small business owner (being one herself) and agreed to help me out for a percentage of the ad revenue from the shop. So, after a bit of reformulating I created a budget that allowed me to dip into my main site's ad revenue to cover the costs of taxes, fees and Kate's retainer. She worked with me to design the look of the site and incorporate a logo I'd hired artist Alice Stevenson to create. Once the look was finished and the product information loaded, Kate helped me deal with the financial issues by setting up a shopping cart via PayPal (which let me choose to accept PayPal accounts and Credit cards- for a fee, of course) and set up an account with Mal's e-commerce. And then suddenly tip number one came into effect: start up costs.

Once we started the PayPal account and Mal's account the fees just kept coming. 3% here, 5.5% there. It just didn't end (and it still doesn't). Luckily I had my ad revenue from the main site to cover these fees but I highly suggest finding out all the hidden fees including with services like PayPal, Yahoo, Mal's and other shopping cart vendors to make sure you've covered everything before you get started. They add up quickly.

With the shop designed and the cart ready to go I talked to the designers about shipping. My concern was getting products to customers all around the world quickly and for the lowest price possible. Since a number of my designers were in Europe I decided to have them send their entire inventory to me to ship from my apt in Brooklyn. While this ended up saving people up to $17 on intl shipping fees it ended up being one of the most time consuming decisions I'd made. Exhibit A:

290157960_712f40425c

Here is one of the shop's wonderful designers, Matt of Sesame Letterpress mailing coasters from his living room. This is the real life of independent designers and small business owners. Mailing, shipping, label making- it's all done at home and it's most often a mess. I take in at least a few products a month to mail from my home and I'm inevitably covered in labels and mailers for weeks until we're sold out. Here are some tips about mailing:

1. Track everything. It make cost a little bit extra but when someone tries to stiff you for $250 in goods it's helpful to have a receipt saying they received it.

2. Invest in a PayPal account that lets you print labels via the USPS. I can do everything from my computer at home and skip a trip to the post office. I didn't do this the first month and after hand-writing 150 labels and waiting in line for over 2 hours I decided it was worth the investment.

3. If you're mailing prints or photographs it's worth investing in those pricey waterproof mailers from Staples. I used thick (and I mean thick) cardboard mailers to mail Camilla Engman's prints and they managed to still bend (even with "do not bend" stamps) and result in needing to replace customer's prints.

4. Stay in contact with your customers. If you need to mail something late just let them know. If you're running a small business most people will understand if you're running a tad late or if there's been an error. I had some products get stuck at customs and my customers were very understanding about the slight delay once I emailed them individually.

So every month after Kate has kindly built the pages for each customer and updated our cart I track each individual order, direct it to the right designer and make sure orders are being shipped on time. If it's for an intl designer I mail things myself using my PayPal account and mailers I buy at Staples. However, if you're mailing more regularly it probably makes sense to start an account with U-line. Their prices are better and you get discounts for buying in bulk.

If you've got products and shipping down now you're left with inventory and customer service. I track the inventory of every product (we don't have a service that does that automatically) and make sure we're not selling product we don't have. After that I'm the go-to for all comments, complaints or questions with the site. If you can afford to hire someone to deal with this aspect (or wrangle a spouse into it) I highly suggest it. After reading dozens and dozens of emails asking for layaway on a $13 coaster set or if they can get something for free because they read your site you run the danger of losing your polite tone. I find it's best to wait a bit before I respond to emails like this. The last thing you want to do is be rude to a potential customer. But keep in mind that some people will try to get things as cheaply as possible. So if you don't offer layaway on a $13 item (one customer wanted $13 spread out over 3 months) be prepared deal with a customer that may still be upset and rant about it being unfair. It's just part of running a shop.

After you've got things going there are some great online resources that have been invaluable to me. First and foremost is THE SWITCHBOARDS- a site with a forum and helpful articles on running a small, indie business (with an emphasis on women). Every issue I've ever had has been addressed on here and their advice is wonderful. This site has also been extremely helpful with details regarding legal issues and finance. And last but not least- connect with local business owners in your area. Even if you run an online shop it helps to have people near you that you can talk to about issues, concerns or just connect with to test out ideas. I've started a local Business Women night in the NYC area but I suggest checking out Meet Up.com to start your own or see if there's already a small business owner meet up in your area.

I hope some of this has been helpful for those of you running (or thinking about running) your own shop. As always, I'm happy to answer any questions I can via email so please feel free to email with questions or concerns about getting your shop up and running. If I can help I'll do my best to connect you with someone in your area who can.

ABS – Always Be Selling

You might have heard of the ABC’s of sales, “Always Be Closing.” However, it’s not always just about closing the deal, it is also getting your message, your product, your idea, out in the public eye. To win, you must differentiate your product or idea from all the others and create a niche market that makes you truly unique in the public mind.

I sell wind generators. These are not the giant machines that stand 300 feet in the air producing electricity for thousands of homes. My machines are very small by comparison and provide enough energy to power one home – reducing or eliminating your monthly electric bill. Sound exciting? It is. The challenge, however, is creating what we call the “Residential Power Appliance Market.” Currently, this market is almost non-existent. Most people don’t know it’s possible to use solar or small wind systems to power their home. Our second challenge is that we are a small company (less than 100 employees). Our sales and marketing budget is about the size of the office coffee budget for a major corporation. However, you’ll find us in just about every major publication over the last six months and Skystream orders are piling up. How did we do it?

“Always Be Selling” is finding a way to get your name in the public eye through every possible channel. Last week I was in Washington D.C. attending a conference on renewable energy. Tom Friedman, author of The World is Flat, was a presenter. After his speech I was the first in line to speak with him. I gave him a Skystream brochure and suggested how he might mention us in future talks. Later that day I met with a reporter from USA Today, as set up by our public relations firm Porter Novelli. I spent an hour talking about the benefits of small wind as a way to fight ever-increasing utility costs. That evening I met Amory Lovins of the Rocky Mountain Institute, a leading energy think tank. The week went on and on in much the same way. This is how most my weeks play out. I also spent a great deal of time looking for the right people to promote a new tax incentive for renewable energy in 2007.

“Always Be Selling” could easily be a 400-page book. Here I’ll consolidate ABS down to a few points.

1) Know your competition and find a way to differentiate your business. A favorite story of mine is Procter & Gamble’s (P&G) marketing of Cheer laundry detergent back in the 50’s. The marketers for Cheer were looking for a way to differentiate Cheer from the highly successful Tide. They added blue sprinkles to the formula and marketed Cheer’s “Blue-Magic Whitener.” Sales shot through the roof. Cheer succeeded in creating a special niche in the not-all-that-exciting laundry soap industry. A great book about marketing is The 22 Immutable Laws of Marketing by Al Riece and Jack Trout. It’s a must read.

2) Once you’ve defined your message and what makes you unique, get the message out. A good public relations firm is always helpful. But even if you can’t afford one, get out there and do it yourself. Don’t be bashful, get your product in front of all the leaders in your market. Get them to talk about it. Advertising works but news stories offer far more credibility. Draft press releases and send them to everyone you think might be interested. Keep the story fresh and make it newsworthy. Don’t stop at magazines and newspapers. Write to authors and speakers and send them images suggesting your concept could be used in their speeches. They like to keep things fresh too. So if they like what you have, they’ll likely use it.

3) Also, put your product to work. Invest a little in placing your products around the country or planet to demonstrate how they work. And be sure to let the press know you’re coming.

“Always Be Selling” means thinking of the big picture and getting the product out in the world and into the minds of the consumers. We are all bombarded with advertising and have largely become immune to the ads that plaster bathroom stalls or airline seat tables. Your product will be lost if you don’t find a way to make it different and exciting. Remember, have a brochure with you at all times and always be ready to deliver your message. Speak passionately about your product so the person you’re speaking to feels the excitement of the story. If P&G can make Cheer successful with blue sprinkles, you too can differentiate your product!

About December 2006

This page contains all entries posted to BizBox Blog on Slate in December 2006. They are listed from oldest to newest.

November 2006 is the previous archive.

January 2007 is the next archive.

Many more can be found on the main index page or by looking through the archives.

Powered by Movable Type 3.33
Hosted by LivingDot