This is the second article in ShelfTrend's Entrepreneur Series contributed by our Entrepreneur of the Moment, Heather Potter.
When I first started Shoe Envy I was operating on the principle of, “If you build it, they will come”.
So I flew to China, splashed out $20,000 on my first range of shoes, popped them on a website and waited with glee for the sales to come flooding in.
I waited... and waited...
After a few weeks, I developed a cold well of terror in the pit of my stomach. I might have just blown $20,000.
Everything up until that point had been fun and relatively easy and it made me think, “I don’t know why everyone doesn’t just quit their job and start a business. This is a piece of cake!”
But obviously, if it was that easy, everyone would be doing it and that’s exactly why they’re not; it’s NOT easy.
Over the next several weeks, I’m going to share with you how I set up my own online business.
I’m working with ShelfTrend on this Entrepreneur Series because I see how our financial situations are more vulnerable and exposed than ever. We cannot just rely on our jobs anymore. Selling online is an excellent secondary or, if you’re really committed, primary income. All it takes is some gumption, good judgement and some sound advice from someone who did it the hard way (that’s me) and of course, really solid data from ShelfTrend.
If ShelfTrend was around 7 years ago when I started my business I would have saved myself so many expensive missteps on critical issues such as understanding the market, learning from and monitoring competitors and even pricing. I’m going to talk about some of these things in future articles so sign up for email updates and follow me through my crazy journey.
So how did I start? I already knew I wanted to sell shoes. I love shoes. I did zero research but I’m a real believer that if you’re working with something you’re passionate about, the market will make room for you. Plus you get a head start with all that knowledge and experience you already have with that product area you already love.
I didn’t know it then, but I had made several major errors when it came to developing and launching my first shoe range. Fortunately, I was able to wait it out but I learn some expensive lessons.
So if you don’t have $20,000 to squander on product that won’t sell, here are five tips for building your best product strategy.
Tip #1: Don’t believe your friends and family
I gotta start with this. My loved ones have lied to me. And yours will lie to you too. They don’t have skin in the game except for their relationship with you and they don’t want to mess that up. So they’re either going to praise you uncritically to make you feel great about what you’re doing so that you’ll love them more, OR they will rain on your parade and be totally unsupportive so that when everything falls in a heap, they can say I told you so.
When it comes to your business, get some new friends or pay for a business coach who’s done this before as their job. You deserve real advice that will actually help you succeed.
Tip #2: Build a product Niche for your customer, not yourself.
When I went on my first buying trip, I shopped for my business as though I was shopping for myself. I built a range based on my tastes and purchasing behaviour and curated my own fantasy shoe wardrobe.
This would have been amazing if my customer base was just like me but as it turned out, they weren’t. Over time, I learned that the people who were attracted to my brand and had the purchasing power to support my business were different to me in lots of ways. I was young, footloose, childless and fairly irresponsible. They were:
Older
Married
Had teenaged or adult children
Owned their own homes
Came from two-income households.
Importantly for my product strategy, their days of wearing 12-cm heels were behind them – which ruled out every single pair of shoes in my first range. I learned these things from data; I surveyed them. And it became obvious my product strategy needed to change.
My first foray into a new product was designing a pair of “commuter flats” that were suitable for walking to the train station but dressy enough that they didn’t look out of place with a suit. They were a smash-hit.
Had I done my research on ShelfTrend I would have understood from the outset that the online selection of fashionable flats were generally only available in condescending grandmotherly styles. There was a massive product gap wide open for more youthful and stylish designs, AND with a higher profit margin than high heels! It took a couple of years and I lot of painful and expensive experience for me to figure it out the slow way – through failure – but I got there in the end.
It was a huge shock that I, a committed wearer of 12-cm platform heels, was now in the business of making comfortable shoes! But there was no arguing with the data. I had found my market niche.
Tip #3: Know the products already in the market
When Shoe Envy first started, I had a male business partner who was eager to get involved in developing the products – despite his obvious lack of credentials in the area of understanding women’s footwear choices or motives. He was eager to include a lot of plain “commercial” styles in black and beige, which is logically what most women would buy. I instinctively resisted.
I didn’t know much about business then, but with a 15-year career in PR under my belt, I did know quite a bit about promotions. I pushed back and insisted we needed “media shoes” to use as the promotional show ponies that would catch our customers’ eyes and help us sell the brand.
My audience loved them. My boldest, most dramatic and colorful “media shoe” ranges sold out quickly, leaving a glut of plainer products on the shelf. Over time, I reduced the volume of plain styles and added more and more dramatic styles.
One evening, I was strolling by a major shoe retailer when I noticed something interesting about the stock. The shelves were an ocean of black and beige “commercial” styles – the kind of thing customers can get anywhere.
That’s when it dawned on me – they were coming to Shoe Envy specifically because they couldn’t get bright, colorful, bold and patterned styles in regular stores. It wasn’t necessary for me to stock “commercial” styles at all because that’s what everyone else was already doing.
Looking through ShelfTrend today, there are already almost 3 million shoe listings on eBay Australia alone. That’s a lot of shoes! Top ranked and dominating the search results are Ugg Boots – no surprise since we are all in lock-down over the winter period. But flipping through the inventory already gives me so much insight into what is in market and what customers currently have to choose from – makes me itchy to start another shoe business but now with data that gives me the perspective I need!
Tip #4: Use real data to remove the guesswork
I started my business based on a series of assumptions that appeared to make logical sense, and they just felt right. Had I known ShelfTrend was available, I would have discovered I was actually really quite wrong in several critical (and costly) ways.
With ShelfTrend, I would have been able to fact-check so many of my assumptions. I needed real information about where the market opportunity was, including:
What sort of products are already available in market?
What are customers spending their money on?
Is there a market niche not being served?
Does buying behavior and eBay’s search rank reveal anything about my ideal customer
ShelfTrend’s live data from eBay shows what millions of customers are choosing to spend their money on in real-time. If I had done the smart thing and tested my assumptions against this enormous data source, I would have spotted my errors pretty quickly.
For example, it would have been obvious that the demographic I was intending to sell high heels to was already buying similar products from eBay at less than my landed cost price. I would never be able to compete with that.
I would also have discovered that comfortable shoes targeting older women sell at higher price points. They are also generally only available in condescending grandmotherly styles, leaving a niche wide open for more youthful and stylish designs with a higher profit margin than high heels.
When I was starting my business, I spent three days searching on Google to learn two things – I love platform heels (which I already knew) and there’s a great town in China that specializes in manufacturing them. If I’d spent just three hours running reports on ShelfTrend, I would have discovered vital information that would likely have saved me $20,000 and three years of wasted time.
At the end of the day, there is no substitute for data. Everything else is just a guess.
Tip #5: Plan your product range to encourage repeat purchasing
When I designed my first range, I was so excited about launching the store that I put every single pair on the website immediately. This created two problems:
Decision paralysis: New fans of the brand went from having nothing to choose from to having ALL THE THINGS at once. If people have too many options, they can become overwhelmed and ultimately do nothing.
Boredom: Because I gave them everything I had, once the initial excitement from the launch died down, I had nothing new to offer them to keep them coming back. They got bored and traffic died down.
I learned the hard way that just because your shoes arrived in your warehouse all at once doesn’t mean they have to land on your website all at once! In subsequent years I put a lot of effort into planning my shoe orders, including:
Planning for the seasons – I would design product that could be released throughout the year in line with the changing seasons. That meant having weather-appropriate styles for different seasons and also being ahead of the trends in terms of what will be popular next summer, not just right now.
Creating mini ranges – If I was ordering ten styles of a particular shoe in different colors and materials, I would split them into three distinct ranges of three or four styles each and produce a set of shoes that could be grouped together as a range. I would then stagger their release to keep excitement high and increase the chances of customers buying more than one style within the range.
Extending the brand concept – I wanted to create names for my products that captured the imagination and reflected the personality of my brand – which was just a little bit naughty. For example, my first range of low heels was called “Little Mischief” and the styles in that range had names like Sassy, Naughty, Brazen, Minx and Trouble. This was one of the first ranges to sell out and was the most-requested sold out range I ever manufactured. The naming convention was a huge part of engaging the right customers and making my brand memorable.
Putting together the right product strategy that sells is both art and science with a dash of risk and excitement mixed in. Underpinning all of this is an obsession with knowing the market and your customer. Armed with your own sales data and the inventory insights offered to you by ShelfTrend, you’ll gain a deep understanding of what is needed to win the next season and the next, and the next.
In my next blog article I talk about really connecting with your customer and building your tribe. Stay with me during this Entrepreneur Series – I promise, that the lessons and stories I tell are worth considering when starting your own adventure in online selling.
Heather Potter
Heather is a journalist-turned-Public Relations extrordinaire to digital communications specialist. Having worked around the world for big brands in the commercial and NGO sectors, she decided to try her hand at building her own ecommerce business - and it worked! Although she had to close Shoe Envy for family reasons, she remains passionate about ecommerce and small business, especially enabling others with the same entrepreneurial spirit toward online success with engaging content and communications. Find her at Chilli Dog Consulting - she'd love to have a chat.
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