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I am running an old economy business selling witches, which means buying, storing and selling/sending physically existing products. The past twelve months mark a considerable breakthrough for our online-sales, which now amount to about fifty percent in total. More and more robustly google has established our site as THE authority in our little market-niche, and I am in the lucky situation that whenever I design a special html-page on a given sub-topic within a few days or weeks it will be indexed taking one of the first spots on the search-queries I target at.
We have a very inhomogeneous core of about 3000 products we regularly order. The broader niche covers - as I'd estimate - a range of 250k products available from my suppliers with very fuzzy edges/overlaps into everyday needs. So storage space and capital-binding are very serious matters whenever I think about the next steps.
I have a relatively clear core, which supplies me with a constant stream of every-day-orders meanwhile, but there were quite a number of highly interesting deals we made last year with some single products from that long tail; it's B2B officially, so we had some cases where a single customer ordered several hundred items of a single product, in some cases more than ten times as much as I'd normally sell the whole year and in some cases even five times outnumbering our normal whole-years-orders from that specific supplier.
My major problem is that many of the low-price-products are only available in packages of five to twenty pieces. How can I cope with that?
My primary goal for the current year was to get data-material from my suppliers and make that niche-information available on the net in order to make that long tail even longer. It is a pity and a chance at the same time that these my suppliers in most cases are fairly small companies with only a few employees: On the one hand this is the reason why I have become an authority for google, on the other hand this means that most are highly inflexible with respect to the data they may sent. The best I can get in most cases is some badly designed PDF-documents with the products (and sometimes even prices), but it is almost impossible to convert this information for a database.
I got some good material from my most important supplier. I do store almost 30 % of the products he sells in total, so I inserted the remaining 70% into my database marking it as „available on demand in whole packages." Surprisingly enough, we did receive a few orders concerning these items, although these were only available over the search-function inside our shop-system. But I doubt such a strategy is worth the effort all in all.
There is another supplier, whom I recently listed new, because I found a considerable amount of search-queries in my logfiles from people explicitly looking for his brand. As a test I ordered about 20 of his 3000 items, but I fear many of my visitors are still highly disappointed. I probably could make a hundred k turnaround only with that supplier, but I neither have the storage capacity, nor the experience which of his products people are really seeking, nor the money to account for a complete listing.
We're relatively small. I have one full-time employee and six part-timers, who are doing everyday jobs quite fine. I managed to reduce my own amount of work as a company owner to only a few hours a day, but this work has to be done constantly and is quite brain-exhausting, so my resources for programming are fairly limited. The same holds true for my financial resources, since 2003 and 2004 have been really bad, as for many, I assume. I'll need at least one or two more years before being able to employ another full-timer with knowledge in html/php/mysql, and I came to the conclusion, that specific knowledge of our niche items is so fundamental, that I see no way to outsource this part to freelancers.
Apart from some general „what would you do next?" I have no particular question in mind. I just wanted to share some experiences from „real life" instead of adsense, books, cds or the travelling industry. Sorry for the long post.
Well, it's first of may isn't it?
Hmm, alas Walpurgisnacht is not that well-known in the English-speaking world.
Never read "faust?"
Ah, I think I've got it. You mean "widgets"? (I thought it was a misspelling of "watches" and was getting confused ;-).
Gruesse in den Harz (?)
I guess you know what are your most saleable products, one that people comeback to buy time and again, do those people other related products?
If so Id strip yourlines down to something like your hard product line.
When it comes to buying in fives or more, well yes thats a problem ive faced and theres nothing you can do to get around it.
I think your biggest problem is lack of capital.
So storage space and capital-binding are very serious matters whenever I think about the next steps.
Can the supplier do blind drop-shipping, or just-in-time fulfillment to you? Anything where you don't have to hold inventory.
Even at a higher cost 'per witch', this might be worthwhile. It would let you mark certain crones as 'available' and get those one-off-orders without having to lock up your capital in inventory, then you could sell at a lower price for larger quantities, where you'd do fulfillment through normal channels (slower-but-cheaper delivery by broomstick, presumably?). :)
Well, yes, I heard about those theories of "core-competences" and the like, but I think the long-tail-concept is somewhat quite the opposite. The key issue is: how to make that long tail longer without binding too much capital and without wasting too much time working on products-data noone is actually interested in.
> Can the supplier do blind drop-shipping
We did that wherever we could. Some of those unique deals we made comprised products we never had listed; the customers stumbled onto our website using a very broad search-term, because they did not find anything specific, and with our products-competence we could serve their needs. What I'm aiming at, is to bring thousands - if not millions - of "words" to our site in order to enlarge the probability of such instances.
That is how I understand the long-tail-concept, but how do you organize this in an inhomogeneous environment? Inhomogenous means, that the products we sell vary tremendously in price, size, weight and all other relevant factors.
At present I am always in danger of "getting lost in the details." I might spend hundreds of hours improving these small little things on all levels; given all this turmoil around big-daddy I'd hesitate to make any long-term-decisions, because I do not know whether I can rely on anything. On the other hand, time is money particulary for these online sales. I think it is only a matter of five to eight years until the larger companies discover the chances the internet and SEO truely bear.
So what would you do?
- work on the details, listen to your customers and serve their needs?
- spend considerable time in seeking for venture capital and aim at a level ten times as much as at present?
Or, as Pink Floyd once put it: "...noone told you when to run, you missed the starting gun..."