So a couple of years ago my hubby Dan and I decided that we would dip our toes into the wide world of online retail. Having worked online since 1999 in the info marketing side of things I was curious to get a taste of online business from the ‘other side’.
We opened www.myfavoritebabygifts.com in February 2007 and began selling all kinds of fun, cool baby related items. If you click that link you will see that it is no longer an active site as of this past week. We decided after the holidays to shut this site down, and I wanted to share a couple of lessons/reasons behind that choice…
- There’s alot of (boring) work with a retail store. Being a smaller, home-based store we were the ones who had to pack up and send the orders. Let’s just say that gets old pretty quick, hehe. Compared to info-marketing and all the great systems that automate the product/service delivery.
- Margins are quite a bit less. We went into this knowing that of course, but I had a bit of an ick knowing that 50% (or more) of a sale goes directly to the cost of the goods themselves. Especially when compared to info-marketing and coaching/consulting offerings where there are very low (if any) cost of sales. A $250 sale on the info-marketing side puts 90% in my pocket, vs. 40% or less for a similar retail sale.
- It’s not as much of a relationship based business. I hadn’t really considered this until we started marketing our store. With retail we depended alot of search engine marketing (adwords and other SEO strategies) – which means people would find the site online and if they liked what they saw they bought. Compared to an info-marketing business where people get a ‘taste’ of what you have to offer, get to know-like-trust you and then buy your products/services. Relationship is important in either kind of business, but it really is the hub of an info-marketing business compared to just being a ‘piece’ of a retail business. And for me I really like being able to build a long-term relationship with people and continue to serve them in bigger and better ways.
- Not as much repeat business. Along the same lines as the relationship thing, there wasn’t as much repeat business in our store. This of course can vary depending on what you sell – being that we were focused on baby gifts there wasn’t much repeat business until someone needed to buy another gift (which doesn’t happen very often). Compared to the ‘raving fans’ that you can create in info-marketing who really enjoy what you offer and consistently buy from you over time.
- There isn’t much room for creativity in retail. Choosing products to sell vs. creating new products to sell. I missed the creative element on the retail side.
- Where attention goes, energy flows. We simply did not give our retail business the proper amount of TLC for it to truly thrive. I was focused on other elements of my business and quite honestly our retail store was almost an afterthought. So it is no surprise that it didn’t grow into a bustling little online biz.
And so we made the decision to shut down the site… I have to say that I was really resistant to shutting it down at first. A part of me was like “come on! don’t give up, there has got to be a way to make it work… yadda yadda.” And then I was reminded the other day when listening to a biz class that part of being successful is knowing when to let go of what isn’t working – and for me the retail side of online business doesn’t work.
Plus now I have a bit more energetic and literal space to work on the things that DO excite me – stay tuned for more on that in the near future. 🙂