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Every Friday, I post a small insight into running Curio City and/or Blue Hills Editorial Services. My most recent posts are directly below. You can also start with the first post, or use the subject labels to the right to home in on particular topics. Feel free to comment on anything that interests you.
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Friday, April 27, 2007

When Good Merchandise Goes Bad

The well-known 80/20 rule says that 80% of retail sales come from 20% of a store’s merchandise. Four out of five new items that I bring in are going to end up in the “tail”. After nearly a year and a half in business, I’m starting to understand why things end up there. Let me illustrate.

Hand-painted ceramic tile jewelry boxes and serving trays from Tile Craft are drop-dead gorgeous works of art when you see them in person. I was drawn to them at last year’s Boston Gift Show. But they don’t present well online. No photograph can capture the depth of color or the 3D texture that makes them so beautiful. I’m glad that I bought them conservatively, because I have not sold a single piece, even at bargain pricing.

I’d previously sold just enough ceramic tile designs by Sybil Shane to hint at a market for them. I expected Tile Craft’s functional items to do better than Sybil’s purely decorative tiles. When I saw another very nice ceramic line from a company called Basheer Art Tile at the spring gift show, I was sorely tempted to try a few styles. But I can’t gamble on this category until I understand why Sybil’s tiles sold (however modestly), and Tile Craft’s didn’t. The Basheer rep opined that the subject of the art matters most – cats always sell, for instance. My bestselling Sybil tile was the black cat. Yet, my favorite Tile Craft jewelry box is a cute cat picture. Basheer has no minimum order quantity and I have still not ruled out experimenting with a few of their subjects. I just can't afford the inventory money right now.

I originally expected wine accessories and wine-themed merchandise to be another blowout category, and I do sell some wine merchandise reasonably well. The occasional mention from The Cork Jester always perks up interest. But no wine product has ever made it into my top 20%. Maybe there is simply too much product out there, and it’s hard to get people’s attention. The Life With Wine software should have been a breakout product. Marketed right, maybe it still could be. Most recently, I thought these wine facts towels would break out. So far, no such luck. I’m still searching for that unusual, useful, interesting item that isn’t widely available.

Sea Stone Bottle Stoppers theoretically fit that bill. They’re beautiful. They’re different. They’re practical. They aren’t widely available. They have all the hallmarks of a successful product…yet they haven’t sold at all, even at a discount. This time, I think I understand why: Each stopper is unique. People want to choose one specific stone, not have one picked out for them. This is another item that would do well in-store, but that dies online.

For all that I try to learn from my failures, sometimes they're just plain mysterious. Light switch plates should have been a sure-fire hit. I spent a big share of my startup inventory dollars on them and put a lot of time into photographing them and creating their product pages. And they didn’t sell at all. Since marking them down to cost, I have slowly recouped maybe 75% of my original investment. I still sell one every now and then, but eventually I’ll have to dump what’s left at a big loss on eBay. I have struggled to understand why these failed. Maybe they are too complicated (Do you know how many single, double, and rocker switches your home has?). Maybe they’re too mundane or too mainstream to be a “curio”. Maybe they would work as an in-store impulse item. For whatever reason(s), I couldn’t sell them online at all.

Finally, some generalizations: Products whose function is easily described, and that are identical from one to the next, and that boast some obviously clever feature, sell the best. Products whose appeal is primarily visual or tactile, or that are unique from one piece to the next, or whose most interesting aspects are subtle, don’t sell online. It is very difficult to describe beauty, or any other subjective quality, in a compelling way. Photos don’t get it across. Products with a lot of variety -- like refrigerator magnets or greeting cards -- don't do well in limited selection. If I can't afford to offer scores or even hundreds, it makes no sense to offer a dozen.

The amount of disposable income that most people can spare often surprises a low-income person like me. Moderately expensive merchandise -- $40 and up – sells better than cheaper items. People will sometimes toss in a magnet or a Flashmouth with a larger order, but they seldom order these small items alone. Shipping costs are probably the driving factor here. The more valuable the order, the more willing people are to pay for delivery.

Sometimes circumstances knock a 20-percenter into the 80% tail. I’ve written previously about Typewriter key jewelry, the Neverlate Clock, and other fallen stars, so I’ll just reiterate that the top 20% is always a moving target. (Incidentally, DayClocks – maybe my favorite product -- have come back from the dead since I wrote that column.)

Of course, a well-placed advertisement or a lucky media mention can quickly overturn these rules. Don't even get me started on marketing. As you can see from my subject labels, that topic comes up over and over again.

A final lesson reluctantly learned: I can’t afford to bring in new products that I expect to end up in the 80% tail. “Maybe I’d sell a few” won’t cut it for future merchandise choices. I won’t order anything that doesn’t have a reasonable shot at making the top 20%. Sadly, the 80/20 rule is not easily fooled.

1 comment:

  1. Matrix1:03 PM

    "not easily fooled?" I think its never fooled. It can be off balance for short while, but at any extensive period of time that rule is a RULE. I just learned it hard way, after spending 80% of my time on developing my park bench book and 20% on my off line business. Well, the profit wise it is reversed i have probably 90% of my profit coming from off line coaching and 10% from the book. So now i am all but dropping any marketing effort of the book (it can sit there, but thats about it) and refocusing back on the coaching. Just had this month, my biggest month so far in coaching profits.


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