You meet a lot of interesting people out there. Like Otherwise Nameless. About two years ago I met Otherwise, a shy fellow who asks that I not use his name, and since then I’ve enjoyed a remarkably rich intellectual exchange with the dude.
Around here, we know that when Otherwise recommends something, you should be listening. The guy walks the talk:
“I’ve been selling online since 1994-ish (my last company used the internet to grow from sub $100k to over $4 million – mainly from strong online marketing). And, since selling out two years ago, I’ve made a comfortable living selling stuff online – every dang day.”
So when someone in a thread on a private discussion group asked Otherwise for his ideas on the fundamentals of marketing online, here’s what he had to say (his words, not mine).
How Much Can You Spend To Acquire Customers Without Going Broke?
If your product has a low price point (we’re talking plastic food containers, right?), what’s your margin? What’s your cost of product, plus labor, shipping, returns, and conversion (getting people to see your offer and buy your product) and what’s leftover for you?
Until you know these, you’re likely to lose your shorts going the traditional ‘online marketing’ (or direct marketing) route. Know your metrics first.
You’re in luck! There’s never been a better time, place or method to test-market your new products – and understand your metrics – without spending umteen thousands on market tests. Ready?
Many product developers I know start there (even before they develop their product or make production molds or do patents). Why? Within moments you and I can see what’s selling to the millions of people who frequent the ‘Bay’ (there’s almost a million bids a day I hear). And we can learn our metrics cheap, quick, and easy.
1) Check out what’s being sold within your niche.
2) What’s the general demand for your product category? [An advanced search specifying Closed Auctions only will give you information about what’s been selling and at what prices. HotBidz, an Ebay search tool that sorts based on bids for current and past auctions (based on category, keyword or...) is also a good avenue for research.]
3) For those products selling in your niche, what are the features/benefits, average bid, average shipping/handling fee and traffic (pay particular attention to the ‘auction counter’ your competitors place on their auctions – it’s a cheap way to know what’s of interest to your market)
4) How is your own product positioned to compete? How do you position: price, value, features, bundles, etc.
Is there demand for your stuff? Test it. Add an auction of your own. See how much traffic you get (add an auction counter). Pay particular attention to emails you get from customers (cheap focus grouping, Batman). Do whatever it takes to sell your stuff.
Within a week or two you’ll know if there’s a direct B2C market online for your stuff. And, you’ll avoid the initial outlay for a web site, search engine marketing, cost per clicks, banner ads, and such, until you are dang sure there’s a direct consumer market for your stuff (and how much you can afford to spend on building a web site, cpc, search engines, banner ads and the like).
What if you don’t get any bids on your auctions? Change the title, change the offer, change the price, play with copy, bundle in other products, partner with others to offer your stuff as a loss-leader, position it for different markets (tailgating, craft storage, pet food keeper), etc. Understand – without equivocation – what sells for your product and niche.
What if you still don’t get bids or they aren't profitable? Your product may be better for B2B – meaning you need to sell to retail stores and other existing B2B channels (in large runs) to make your margins work. Selling one-off deals online may not be worth it.
But the only way to know is “asking people to open their wallets for your stuff” – and I'd suggest you point your browser to Ebay first.
Words you can take to the bank. Oh, and Otherwise has a few more words for you:
“Here’s something else to think about: Run, don’t walk to Wizards of Web. This stuff above is a one-off primer, but Wizards of Web will give you your very own Web Marketing PHD – in three days or less!”
You gotta love a shameless, but completely unsolicited plug!
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