Do you underestimate the power of tracking your sales? According to Lisa Suttora, founder of WhatDoISell.com, online retailers can learn a lot from those figures. Says Suttora, “When it comes to figuring out what inventory to sell in the upcoming season, you need to start by looking at your sales from seasons past – the numbers tell the story.” As your e-business moves forward, tracking this data helps you avoid repeating mistakes and enables you to make well-informed product sourcing decisions.
As you look at your sales history, there are five specific questions you should be asking, to gain a proper perspective on your sourcing position:
1. What patterns did I see in my business during the previous season?
Identify the defining characteristics of your best-selling items. If your eStore sells clocks, were your best-sellers vintage? Were they modern? Feature-heavy? Brand-name? But don’t stop yet – you’re only half-way there.
Once you’ve determined which items were your fastest movers, go a step further and look at the consumer trends that drove those product sales (e.g. technology-enhanced products, earth-friendly living, etc.) If the trends behind those sales are still growing, then you know those items will continue to sell well. If, however, they’re on their way out, you don’t want to drag down your profits with products and trends on the decline.
2. Has my customer base changed over the year?
If you detect a shift in the demographics of your buyer base (e.g. an upsurge in the percentage of female buyers), you need to discover the cause. This is where your customer feedback becomes important – whether it’s paying attention to customer emails or sending out surveys. To figure out how to keep your customers coming back, you need to find out who they are and why they’re buying.
3. Am I up-to-date with my current suppliers?
Many sellers operate out of distributor catalogs that are two quarters old – in retail, that’s a lifetime. Your suppliers spend a great deal of time and money doing research to keep ahead of consumer buying trends. You need to leverage their research by implementing the results into your product selection and sourcing. That means getting their catalogs as soon as they come out, signing up for their newsletters, and reading their emails. These items all contain a great deal of information on where the market is heading.
4. Have I integrated any of the products that my current suppliers have introduced into the marketplace in the last year?
It’s easy to get stuck in a product sourcing rut, and simply re-order the same products again and again. But if you want to maximize your selling potential, you have to continually test-market new products, and expand your line and your customer base.
5. What trending research methods do I currently employ?
It’s important to study the trending information that’s coming out of the retail industry you sell in, whether you’re attending trade shows, visiting trade association web sites, or reading consumer magazines and industry publications. This is how you learn which trends are rising and which trends are on their way out, so you can move your eBiz into the future.
Examine Your Sourcing Strategy
Documenting your monthly and seasonal sales records allows you to look back and spot patterns in what products sell best, and when. Explains Suttora, “Truly successful e-tailers track and study their product sales. If you’ll implement these practices into your own business strategy, you’ll quickly recognize whether you’re on the right product sourcing path, or whether you need to shift your sourcing in a new, better direction.”