Yesterday I was given the top-secret task of getting snacks for our children at Costco. I made my way through the crowds of people clamoring to get a free sample of some disgusting sausage. I was headed towards the produce section.
If you’ve never been to Costco, this is an amazing place. The sheer size and magnitude of the place is overwhelming. Once you get past the size of the place, you realize that everything is sold in huge serving sizes. They sell 700 ounce containers of toothpaste and packages of M&Ms that come in boxes of 80.
I believe the initial intent of Costco was for retailers or restaurants to buy supplies in bulk. But Americans being Americans fell in love with the place. You can celebrate excess and gluttony and feel good about it because you are saving money. (Or so you believe)
I had already filled my cart with the required snacks for my children and candy for myself. I enjoy the candy. I made my way to the produce section to get some fruit.
Don’t Waste The Lettuce
There in the corner was a stack of lettuce bags that went up to the ceiling. It was absolutely enormous.
Costco is a huge place and does incredible volume. But looking at that stack of lettuce, I couldn’t help but think how much of it was going to be thrown out and go to waste.
Buying and predicting demand is an art. I have no doubt that Costco and their vast sales data know exactly how much lettuce they need. They probably aren’t going to waste much at all.
But it made me think about one of the lessons we talked about in our book. Deciding on a product to sell online is a crucial part of your success. When starting your online store, the first thing you have decide is what product to sell online. Products that have longevity are superior to ones that don’t.
What do I mean?
A Boring Product To Sell Online Often Wins
Perishable items are a tricky product to sell online. If you can’t sell them before they go bad, you eat the loss. (no pun intended)
One of the things I look for when deciding on a product to sell online is whether the product goes bad. This isn’t specifically food related or perishable items.
There are other types of things that are like this. For example if you start an online store selling high-fashion goods, these go out of style quickly. Designers change collections each season.
You may find yourself stuck with a large amount of excess product to sell online at the end of the season.
Not only are these items dated, you want to keep turning inventory to show new products. You may be forced to sell them at a deep discount and eat into your margins.
Seasons and styles are pretty standard for a lot of retail items. I’m not saying it’s insurmountable. I’m just saying it’s something you need to consider. If you decide on a product to sell online that never ages or goes out of style, you’re on the right path.
Buying Is Tricky
The perfect balance for any online store is having enough inventory to maximize sales while not having any left over. Buying is a tricky art and something you have to think about when selecting a product to sell online.
For example in my wife’s fashion jewelry store she wants to continue to bring in new jewelry designers and new pieces. This means she has to make sure not to over buy inventory of any particular designer.
She attracts customers back, for repeat business, by offering new inventory on a regular basis. This is tough. Some items sell and others sit. How do you know how much to order of each.
It’s a delicate balance of ordering too much or too little of any particular product. When you are first starting out, its better to order a smaller amount. You rather sell out than be stuck with a product you can’t sell.
They Can’t See Behind the Curtain
The beauty of an online store is that nobody knows whats happening behind the scenes. People don’t know how many of your product you have in stock. You can list a product to sell online and only ever have one. It doesn’t matter.
We talked about this in my post about whether to show out of stock items in your store.
A broad selection with a thin supply looks better online than a narrow selection with a large supply.
So if you’re starting out and you’re still thinking about what product to sell online, make sure you think about this. Sizes, Trends, and Perishable goods make selling online that much trickier.
You have enough to worry about as you finalize all your details for your online store. Buy small, and resupply if you have to.
After all you don’t want to be stuck with a stack of rotting product in your house.
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