Recently a customer asked me for some advice as she prepared to start an online business. Here is my response – I am sharing because there are some general principles that can be universally applied. Hope you find this information useful!
I am one step closer to opening the business. It will be exclusively online to start and after that is set up my focus will be on marketing it. I hope to market a referral system if I can find someone to write the program or whatever they call it to make it function seamlessly with the website. Simple concept: for every order placed the person who referred them will gain points towards purchases. Simple but could be a logistical nightmare without a system in place. Your thoughts? While I will in time have about 4 vendors or so, I am giving you the initial order of about $2200 to $2600 exclusively. I am not in a rush to make sales, sounds stupid I know, but am anal enough to not want to start things til at least most of my ducks are in a row , understanding most everything needs tweeking as you go. I have broken down the money by your categories and wonder what you think: amber pendants – $200; amber necklaces – $290; amber rings – $390, amber earrings -$70. Bracelets- $500, Earrings $360,Pendants $450, Rings $250, Chains $150. I would be curious as to what you think.
You are on the right track to design ways to make your site work because online marketing is challenging and can be costly. Also you are doing the right thing by setting up your systems in advance – nothing drives visitors away faster than a website that is poorly designed aesthetically and/ or organizationally. The referral program is a great idea. There are turn key solutions out there you can pay for (monthly usually) and if you go through yahoo stores or Prostores they may have this integrated already. If you have the knowledge to at least project-manage development of your site yourself, visit www.elance.com – you can get good programmers for $5-$10/ hour. But do your research into provider and make sure you know EXACTLY what you want when you write your specs.
Your biggest challenges will be 1) Driving traffic to your site and 2) getting a decent conversion rate. There are books about this but I can give you a few bullets and you can call me if you want to chat more.
1) Traffic – If your site is doing well, you can expect a 1% conversion rate. So for every 100 visitors you will average 1 sale. This stat alone gives you a sense of the mountain you have to climb. You need a LOT of traffic to do well with a website. You can get traffic by paying for clicks (google adwords – again, there are books on this), or getting some clever viral stuff going (not my forte) to get people to your site. Case study – when paypal started 12 years ago they offered $10 for every referral! Wow! I was an early adopter and made $300+. Seemed like a bonehead idea at the time but look at them now. Anyway, once your site is setup to your high expectations you need to get people there. Also you can do things to optimize your site so you rank high organically on bing, google and yahoo.
2) Conversion – This has a lot to do with the design of your site – should be: beautiful, eye-popping, simple, good/ logical flow, MAGNIFICENT PHOTOS (VERY VERY IMPORTANT!!), and, in my opinion, not sterile – give it a personal feel… everything has to work all the time – no dead pages, mising product pics, etc. ONce again… books are written on this …
Regarding your inventory – Really you should sell what you are most attracted too and based on what audience you are going for. I can tell you only in general terms that you want an eclectic and diverse mix of product categories and price points. To start, don’t get too many rings – stick with earrings, pendants, bracelets (one size fits all). Get most of your items such that you can mark them up an average of 2.5 times and retail them for $20-$30 (maybe 60% of your stock). Then fill in with some high end and low end stuff. Get different stones too – most popular are: amethyst, rainbow moonstone, amber, turquoise … lots more obviously, but these are the ones I sell high volumes of very consistently.
My most important bit of advice to you:
BUY Your Wholesale Jewelry NOW !!!!!!!!!!!!!!!!!!!!!!!!
And I will add this caveat so you don’t think this is a sales pitch – I don’t care whether you are buying from me or someone else NOW is the time you should stock up. As in, you should be purchasing the bulk of your jewelry within days or weeks at the most. You may have heard silver has spiked by almost 80% ($17/ ounce – $30/ ounce) in just 2 months. This is unheard of. Highest price ever. lots of sellers going out of business or switching to costume. Don’t panic, but be aware, wholesale prices have already been going up and within a month (you can mark my words) wholesale prices will be through the roof – 30-40% higher than they are right this instant.
Here is the sales pitch – due in part to good planning, a bit of luck and to the fact that I think treating my customers the way I want to do business is the best way to conduct business … my prices have not increased yet. All my jewelry was made pre-september – when silver was $15-$17/ ounce and the pries on my site reflect this. But as I bring in new inventory I also will have no choice but to raise prices.
So this is why I am saying to buy sterling silver now.
And related to this – try some stainless steel jewelry – we will be stocking more very soon – still some on the site. And we will also be stocking lighter weight pieces soon to keep those lower price points active.
Hope that helps, if nothing else then to give you some more homework 😉