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How the Small Survive Online

Jan 1, 2007
by Alfred Branch, Jr.

While the Amazons, Dells and Sears of the Internet landscape dominate online commerce, it is the small wholesalers and retailers who make the web hum. Statistics on the exact number of mom and pop websites are tough to come by, but needless to say that without the millions of small online storefronts dotting the web, ecommerce would not be the bustling, diverse selling alternative that it is.

The difficulty for small online sellers is how do these businesses boost their profile when there are so many companies in the marketplace searching for exposure. How do smaller web sellers stay competitive?

Dozens of Posters
Anthony Fontana, owner of Wholesale Galleries in New York, said the key is to make sure prospective buyers can find his store on the web. He uses Wholesalecentral.com to alert wholesalers and sell his products, and while using eBay, Amazon, Froogle and other sites to peddle merchandise. Wholesale Galleries sells posters and museum quality art prints at wholesale and retail.

Currently, the majority of the revenue is generated through the online retail sites, but Fontana said that his wholesale business would undergo a reorganization within the next 12 to 18 months to help boost those sales. Most of his posters and prints wholesale for $2.50 to $4 a piece, and retail from $6 to $20. "We are always looking to add new products and improve our selection," Fontana said. "That will be a focus for us in 2007."

Fontana also said that small business should not be afraid to experiment with different sites and listing strategies. A smaller online reseller can be more flexible and nimble within the marketplace, so owners should take advantage of that. "The only way to learn what works and what does not is through trial and error. Open up as many online storefronts as possible, because you want customers to be able to find you anywhere. If one does not work, move onto the next."

While small companies might at first look to offer only a single product, they should quickly add more, once the time is right. All those interviewed said that offering a single product is great for learning about the market and how to reach customers, but to retain those customers and find new ones, companies have to diversify the product line.

In addition, small ecommerce sellers have to be willing to work with prospective customers. If a business wants 40 units instead of the usual 50 that a company offers per lot, consider taking the deal and trying to negotiate other terms, such as promises for future orders.

Toy Worms Equal Profits
You move and it moves with you. That is the Magic Fuzzle, a furry, little toy worm sold by a Tennessee based company by the same name, and according to the company's web sales guru, Mary Harouff, the future looks bright because the toy and magic markets continue to sell briskly. The small fuzzy worms wholesale for $0.99 per unit and can retail for between $5 and $15. Minimum orders are for 200 units.

Harouff said that initially the company concentrated on selling a single product. It avoided distractions early on, as it grew its wholesale business. Initially, the company sold the product at fairs and similar events. "We decided to wholesale the Magic Fuzzle and train people how to sell it via training videos. The training video sparked a complete starter kit," she said.

Magic Fuzzle listened to its customers and created a secondary product, the starter kit, to help feed sales of the original item, an approach Harouff said she got from a company she admires, Wal-Mart. A wholesale buyer can purchase a training starter kit for $29.99.

"Love it or hate it, Wal-Mart has given the consumer what they want. We hope to give our customers a product they love at an affordable price," she said.

A Colorful Idea in Flip-Flops
According to Lisa Middleton, the idea came to her in a dream. Middleton, the founder of IgglyBiggly.com, which sells brightly colored flip-flops in a clear plastic tote bag, said when she finds something she likes she often buys more than one of the item, especially flip-flops. And one night, the concept appeared to her while she was sleeping.

"People wear so many different pairs of flip-flops, in so many colors," she said. "I used to buy as many as I could when I found a style that I liked, so I liked the idea of selling multiple pairs at a time."

The idea is catching on with retailers. Although the company was only launched in August of this year, Middleton said that IgglyBiggly generated more than $1 million in orders in its first six weeks. She said one of the keys is to develop samples first to see what buyers want. Middleton said that should sales continue at a brisk pace, IgglyBiggly is hoping to sell to the European and Chinese markets within the next year or so. The company will also add beachwear, sunglasses and a line of baby clothing to the mix. IgglyBiggly plans to add new products every six months. But Middleton is quick to add that she will not offer the other items too quickly. "You have to work-out the kinks when you are smaller. We decided to go with flip-flops partly because they are inexpensive, people lose them and they can buy multiple pairs. Companies can grow too fast and not have an adequate foundation underneath them."

The company's planned expansion into overseas markets is the result of research, which Middleton does as much as possible. "Women in China are among the biggest block of web buyers in the world," she said, adding that to reach those new customers, the business must stay up to date.

"Do not put too much money into product, because you want to know what your customers like or do not like about it," Middleton said. "You can have a great idea for a new shoe, then order up 3,000 pairs from a manufacturer and find out that they do not sell." When she was pitching her concept to retailers, she had, "Fourteen different designs, but four were the hot sellers, so those are the ones I concentrated on."

Middleton has the benefit of once owning a dress company, during which she learned a lot, such as not expanding too fast and staying up to date. She said she also sought out mentors in the industry, which she would recommend all small businesses do. She counts former Esprit president and CEO, Carrado Federico, among those who she turned to for guidance. "Over the years, I have called him quite a bit for advice," she said. "I had always loved Esprit."

Small online wholesalers and retailers should also consider using an online marketing expert to boost exposure. As one wholesaler put it, "Instead of hemming and hawing, get someone who knows what they are doing to market your site. It could save you a lot of headaches down the road."

But if an online retail business cannot afford a marketing expert, do not be afraid to think outside of the box when it comes to marketing. If the market for a clothing accessory is teen-agers, for example, be sure the business is visible where they hang out.

Population Control T-shirts
Lance Marlo has some distinct ideas as it relates to the U.S. and its ever expanding population. So five years ago, the New York based construction foreman decided to put his thoughts on a t-shirt and AmericaIsFull.com was born.

"Growing up, I used to belong to the Sierra Club and other environmental groups, and they used to talk about population growth in this country and how it was in danger of becoming overpopulated. Then in the 1990's, it seemed like those discussions stopped, so I decided to start up the conversation again," he said.

Marlo sells t-shirts emblazoned with, "America is Full," "Wake Up America, Close the Borders," and other hot button slogans, and he says the key to selling provocative products is to have a passion for them. "With all the political discussions about immigration, my t-shirts are very topical," Marlo said. T-shirts wholesale for $6.25 a piece, with minimum orders of 12 shirts for $75. The shirts can retail for upwards of $14.99.

"If you have a product that you truly believe in, stick with it," he said. "But make sure there's an audience that is receptive to it. Talk to people." Marlo said he has faced resistance from newspapers and other media outlets when he has pitched story ideas about the company, due to the subject matter. So he relies on word of mouth to help drive sales.

For more information, contact:

Wholesale Galleries
330 Tompkins Ave., Suite 2001
Staten Island, NY 10304
Tel.: 516-223-2395
Fax: 516-223-2489
Websites: www.wholesalecentral.com/wg/

Magic Fuzzle
4521 West Ravenwood Drive
Chattanooga, TN 37415-2345
Tel.: 800-496-7938
Fax: 800-496-7938
Website: www.magicfuzzle.com

Iggly Biggly
111 Pickwick Lake Drive
Sheffield, AL 35660
Tel.: 256-740-8355
Fax: 256-740-8203
Website: www.igglybiggly.com

America Is Full
1204 Avenue U PMB 1232
Brooklyn, NY 11229
Tel.: 646-764-1650
Website: www.americaisfull.com

Topic: Business Strategies

Related Articles: ecommerce  small business 

Article ID: 15

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