If you had this big problem ....WHAT WOULD YOU DO?

14 replies
BRIEF OVERVIEW:
My job has recently shifted to marketing parts of christmas trees, pools, inflatables and lighting (xmas trees) ect. In total we have roughly 1000 or so parts. The manufacturing company is in China (which is huge) and are major clients are B2B clients like Home Depot, Lowes and Walmart (heavy hitters). To those mega clients, we sell the full products (full above ground and inflatable pools, chrismas trees ect) but not the parts directly (filters, pool liners, christmas lights and bulbs and general replacement parts ect...).

We have done a case study and realized the "parts industry" is a huge untapped market and a potential billion dollar industry over the next 10 years. My bosses are now wanting to market all these 1000 or so parts ONLINE (via an online store) to the B2C (the regular person off the street).

HERE IS MY PROBLEM
Common sense wise, the regular customer off the street will typically only buy 1 replacement part (tops maybe 3) over their lifetime. As I look at this, there will be a huge marketing effort (and cost) to market 1000 or so parts (via an online store) with a target market that typically will not be a volume or "repeat buyer". The logistics to market all of these "parts" will be enormous and very costly....hence [in my opinion] will not get a good ROI for the company - which is my #1 concern.

YOUR SOLUTION, ADVICE AND OPINION?
Would your solution bealter the focus to small to medium size business owners (not the regular customer off the street)because they are more volume type of purchasers and more likely to be "repeat buyers"? For example, should we target small and medium size business owners that own Christmas specialty shops and pool and spa companies instead of the regular "Joe Shmo" customer?

ANOTHER ADDED NUGGET
When we sell our products to the major retailers, we include a warranty notification inside of the product itself. So if the customer has a problem with the product, they call a 1-800# which is here in the US. A strategy (which its in its infancy stage) is to use that first initial contact to solve their problem but also sell "parts" to them on the back end (filters and pool cleaners ect...) and capture that lead and contact. We have not have done so well in maximizing and training the staff to upsell on the back end. Perhaps it is better to focus on selling "these parts" via the major call centers rather than market all these parts online via the online store.

In closing, overall I don't want to take the company down the path of marketing these online parts as it appears to be costly and very time consuming and we won't get a good ROI. Any thoughts overall and any creative ideas to increase these part sales that will give us the more bang for your buck.

Thoughts/Opinions?
#big #problem
  • Profile picture of the author yukon
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    As a customer who bought a swimming pool from Walmart (example):
    • Why would I go to a 3rd party to buy replacement parts?
    • How would I ever know the 3rd party replacement parts supplier exist?
    • Would it be worth my time to fix the cheap/low quality product?
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    • Profile picture of the author chrisnegro
      Originally Posted by yukon View Post

      As a customer who bought a swimming pool from Walmart (example):
      • Why would I go to a 3rd party to buy replacement parts?
      • How would I ever know the 3rd party replacement parts supplier exist?
      • Would it be worth my time to fix the cheap/low quality product?
      Its not a 3rd Party. The manufacturing company sold the product to Walmart [for example] and when they open the box, they are first instructed to register the warranty and immediately call an 800. At that point....we capture their contact for future marketing or if/when they have an issue with their product. During the phone call, they give them a courtesy reminder that if their is anything wrong with the product withing 1 years they will replace it for free and if they need any replacement parts like filters, liners ect...

      In terms of would it be worth your time....YES. The reason why is they buy a pool......and the liner rips....rather than buy a whole pool at walmart.....they buy the replacement part. Also....even though the liner is 60% of the cost of the original pool....many people don't want to set up the pooI again and put the water in it again. We found that they want convenience more that be concerned if its a wise financial decision or not.

      Any other thoughts out there?
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      • Profile picture of the author eccj
        Originally Posted by chrisnegro View Post

        Its not a 3rd Party. The manufacturing company sold the product to Walmart [for example] and when they open the box, they are first instructed to register the warranty and immediately call an 800. At that point....we capture their contact for future marketing or if/when they have an issue with their product. During the phone call, they give them a courtesy reminder that if their is anything wrong with the product withing 1 years they will replace it for free and if they need any replacement parts like filters, liners ect...

        In terms of would it be worth your time....YES. The reason why is they buy a pool......and the liner rips....rather than buy a whole pool at walmart.....they buy the replacement part. Also....even though the liner is 60% of the cost of the original pool....many people don't want to set up the pooI again and put the water in it again. We found that they want convenience more that be concerned if its a wise financial decision or not.

        Any other thoughts out there?
        It looks like the customer service approach is the winner. No offense but you are selling junk not quality. If people wanted to spend time and money they would have bought quality and not have gone to Wal-Mart or Home Depot.

        Maybe you get some customers to buy when they call in but don't expect them to go to a store or buy on a website.

        You are wanting people to replace a transmission that costs almost as much as another new car. You service nice cars. Junk cars you are happy with whatever you get.
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        • Profile picture of the author chrisnegro
          Originally Posted by yukon View Post

          As a customer who bought a swimming pool from Walmart (example):
          • Why would I go to a 3rd party to buy replacement parts?
          • How would I ever know the 3rd party replacement parts supplier exist?
          • Would it be worth my time to fix the cheap/low quality product?
          Originally Posted by eccj View Post

          It looks like the customer service approach is the winner. No offense but you are selling junk not quality. If people wanted to spend time and money they would have bought quality and not have gone to Wal-Mart or Home Depot.

          Maybe you get some customers to buy when they call in but don't expect them to go to a store or buy on a website.

          You are wanting people to replace a transmission that costs almost as much as another new car. You service nice cars. Junk cars you are happy with whatever you get.
          Its definately not IPhone's or XBoxes that is for sure. But the margins are asternomical in the business when you primary breadwinner is selling to mega corporations. They want me to head up the tedious "parts business" and seem to think the target market is the average joe on the street. Personally, I think its good in concept....but the target market should me the small and medium size business owners versus the every day citizen and then piggy back the call center angle.

          Any other thoughts out there?
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  • Profile picture of the author savidge4
    Originally Posted by chrisnegro;10801007[COLOR=Blue

    YOUR SOLUTION, ADVICE AND OPINION?
    Would your solution bealter the focus to small to medium size business owners (not the regular customer off the street)because they are more volume type of purchasers and more likely to be "repeat buyers"? For example, should we target small and medium size business owners that own Christmas specialty shops and pool and spa companies instead of the regular "Joe Shmo" customer?
    I'm not going to beat around the bush here... your thinking and potential methodology is very much "corporate". I would say you are so missing the boat here its not even funny. I would say that you need to do some pretty in depth research on Millenial buying habits - that would indicate the numbers you are throwing around are flat out wrong.

    Lets take a Christmas tree for example... Show of hands real fast.. how many people have a specialty "Christmas shop" in their community or immediate communities? I know I don't.. not to say that these store don't exist... I know they do... but there is nothing immediate about planning a trip to one of those for a part. online is IMMEDIATE. I have a issue with my product.. I go online, I order the fix, the part will be here in a few days PROBEM SOLVED. to be honest, I wouldn't call your inadequate 800 number.. they ALL are inadequate. I would rather get online and order what ever it is.

    Without really knowing the structure and culture of your company... I can tell you that you are stuck in what I would call the yuppie mindset. "If its broke buy a new one." The world has changed, and you and your corporate structure needs to do the same.

    You control the packaging, to some extent you may even control the display of your product. Adding that you offer "Factor Direct" replacement parts and accessories.. My god man!

    The website specifically... Its not about the parts.. If you implement a drab corporate replacement parts site, it will be a failure. Look at the website for whole foods as a good example. Its not about the prices and products.. its what can be done with them.

    So you need to implement content that is developed to maximize the use and longevity of your product. Proper pool placement. Proper pool maintenance. ( filters chemicals etc ) How to properly store your tree. ( I am sure you sell the storage bags ) How to set up the tree. how to test if there is a bulb out or the entire string of lights. and on and on and on 1000 times over.

    Research the millenial mindset - you really need to understand who is buying your product... again being blunt, you don't have a clue.

    I would suggest you contact more than a few marketing firms to maybe gain a better perspective of what you are missing and how you can capitalize on it.

    If everything is implemented correctly.. that call center of yours should grind pretty much to a halt. not to say it shouldn't be there, but the staffing will have thinned out considerably - and you wont have to worry about the up-training for the upsell
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    • Profile picture of the author chrisnegro
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      • Profile picture of the author savidge4
        Originally Posted by chrisnegro View Post

        Whole Foods is a different product with different buying motivations and triggers. I get your concept but how can you practically offer a website with such a "non necessity" based product like Christmas trees and Pools that is as fun, and necessary as Whole Foods? How can you translate a boring "non necessity based" product and make it fun and interactive like Whole Foods. Whole Foods has recipes that target FOOD AS A WHOLE.....we have many different products in different industries. That would be great if we can have ONE TAB that says recipes for the foods that they sell. Find ONE TAB that can have that much simplicity to put your content "or the how too" would be nice but not as seamless and practical as in the industry of Whole Foods. I feel overall what your saying though....good stuff!
        I am going to disagree here.. product is product. you are seeing it as a collection of 1000 boring pieces.... I don't see it that way at all. So you don't have food.. you have all the parts and pieces that make memories. Your little parts and pieces are the backbone to American tradition and culture. We are talking Hotdogs Apple pie and Santa Clause here. Americans spend an ungodly amount of money every year making summertime and winter holiday MEMORIES.

        you want one tab? how about 2? Summer or winter products? Ill give you another decent web example to look at, Ridgid tools ( ridgid .com ) They sell replacement parts, but also are the advertising center of their products and where to buy them.

        Being a marketer and designer, I absolutely love the whole foods approach to their online presents. Its not about selling, its about giving the consumer ideas that in turn probably result in their consumers buying more. I also like the Ridgid approach. A little more within the box.. Obviously more product centric, but their product line in number far out numbers yours... its not one tab its more than a few. All of the needed elements for selling are there along with all the needed aspects of after sale support. Manuals, part purchase, where to buy etc.

        Just for giggles want to see a bad website example? Ryobi tools ( Ryobi .com )

        Originally Posted by chrisnegro View Post

        So what are you saying moving forward?
        You have an online marketers wet dream before you. You possess the ability to transition offline communication with online connection ( the internal packaging of your product ) Online product registration would be a direction I would follow. ( Ridgid does this ) I would pray to god that the call center you currently have keeps a record of what each call pertains to. I would Answer all of those inquires in assorted online medias ( video articles images etc ) I would flow more towards the Whole Foods approach showcasing the product you sell in retail outlets, and implement the ability to upsell the accessories to make the base product better.

        I would implement online communication software such as infusion soft to segment my consumer communications based on the product registration and have killer once a month seasonal content with advertising drops on key aftermarket items ( pool filters, tree storage bags etc )

        STOP looking at your pieces and parts as trivial. I personally look at the purchase of a pool or even a Christmas tree as an investment.. not one that I wish to make every other year. I have had an artificial tree now for 7 years and have replaced the light strings ( its a pre wired tree ) once and have bought 2 storage bags.

        A little side story. I personally have ventured into home building and house flipping. Along the way I have built a small business doing home repair. This last summer one of my fix it guys was asked if there was anything they could do to repair the safety net on a trampoline ( It had a horizontal tear in the net ) - they kind of laughed it off.

        The customer called me, and my wife and I made a stop by to look at it. My wife being the crafty one said yeah we can fix that, it will take about 2 hours and its going to cost $40.00 to fix. The customer was all excited and we went and got the needed supplies ( black string and a large needle ) and we went back and she proceeded to sew the thing up in an hour and 45 minutes.

        The customer was elated that her kids were safe again. ( and then proceeded to refer the f out of us ) How many trampolines do you think my wife has fixed this summer? Would it suprise you if I said 20? What about 30? to be exact.. 43. and WHY? These people would have bought a replacement net... but you cant buy one. They didn't want to fork out the cash to buy a whole new trampoline, the one they have is good.. Just the net was bad.

        So my wife ran around and made $1700+ and spent less than $30 in materials... BUT the fact of this story is that each and every one of the 43... they looked online for a replacement net, but couldn't find one. There are other parts they would like to replace as well on these things - but they simply are not available.

        The same is true for pools and trees... The just buy another one mentality is gone.. and to be Manufacture direct source for replacement parts and accessories for the products you sell... I would venture to say that over time, 2 to 3 years... the parts business might out earn the product itself.
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        • Profile picture of the author eccj
          Originally Posted by savidge4 View Post

          The same is true for pools and trees... The just buy another one mentality is gone.. and to be Manufacture direct source for replacement parts and accessories for the products you sell... I would venture to say that over time, 2 to 3 years... the parts business might out earn the product itself.
          You are thinking BIG. I think its great BUT....

          What you are talking about would be a complete overhaul of the business. Most importantly they would have to go from selling throw away junk to selling something of quality. They need to stop selling Coleman and start selling Yeti.

          Rigid sells nice stuff Ryobi sells lower quality.

          They sold their soul to Wal-Mart, HD, maybe Costco. They sell at dirt cheap prices and I don't think you can really replace the stuff. With most tools or machines when you want something you can work on or replace parts you need to get at leas a mid-level part.

          All I'm saying is you got great ideas but I doubt these people are in the position to act on them.

          That's a cool story about the trampoline. I would be scared a kid would break through the sewing and I would get sued though.
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          • Profile picture of the author chrisnegro
            Originally Posted by eccj View Post

            You are thinking BIG. I think its great BUT....

            What you are talking about would be a complete overhaul of the business.
            No it isn't. They are stopping their main cash cow with the mega corporations. They just simply adding another leg of their business in selling individual parts to a different customer. Its that simple.

            Originally Posted by eccj View Post

            Most importantly they would have to go from selling throw away junk to selling something of quality.
            .
            Again, I think we are missing each other. They sell full quality products and are the worlds largest producers of synthetic xmas trees and have 35% of the world market of inflatable pools and above ground pools. They are going from that....to selling individual parts. Not sure your reasoning of selling junk to quality
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          • Profile picture of the author savidge4
            Originally Posted by eccj View Post

            You are thinking BIG. I think its great BUT....

            What you are talking about would be a complete overhaul of the business. Most importantly they would have to go from selling throw away junk to selling something of quality. They need to stop selling Coleman and start selling Yeti.
            I don't see this as a overhaul at all.. the reality is I suspect they are NOT in the space what so ever.. its not an overhaul as much as it is market expansion. You can twinkle toes into this, or you can go in with your big boy boots and stomp out some profits.


            Originally Posted by eccj View Post

            Rigid sells nice stuff Ryobi sells lower quality.
            The irony in this is that both Ridgid and Ryobi are owned by the same parent company. Ryobi is the lower end consumer product, and Rigdid is the higher contractor / pro series stuff. Many of the internals of both are exactly the same. With my Satellite business the 2 are the mainstays in regards to tools we use. I do work on and repair both. and the reason for that is.. they have websites that actually have replacement parts.

            Originally Posted by eccj View Post

            They sold their soul to Wal-Mart, HD, maybe Costco. They sell at dirt cheap prices and I don't think you can really replace the stuff. With most tools or machines when you want something you can work on or replace parts you need to get at leas a mid-level part.
            With this instance in particular.. I don't see it as soul selling, as much as I see it as partnering high volume retailers. Lower overall profit margins can be made up for through volume. This is BIG business. I can only imagine Gross sales here are in the 10's of millions a year.. and a 10% profit margin isn't such a bad thing... ramp that up to 20 and 40% ( cheap and from china ) and its 10 bedroom 12 bath homes all the way around LOL.

            In regards to replacement. Lets look at pools... When you buy the Pool at Walmart, it has a filter a liner.. a structure, a pump etc.. all of things COULD be replaceable if they were made available. You rip a liner.. you going to buy a whole new pool or replace the liner? I think I saw on the OP's other thread that the liner is 70% the cost of the entire pool... Id buy the liner! LOL

            Originally Posted by eccj View Post

            All I'm saying is you got great ideas but I doubt these people are in the position to act on them.
            The are the manufacture of the product.. they are absolutely in the position to do this... the question is are they willing to act on it?


            Originally Posted by eccj View Post

            That's a cool story about the trampoline. I would be scared a kid would break through the sewing and I would get sued though.
            That's what Liability Insurance is for LOL but really in the 43 we have done there has been a few cases of rips after the wife did the sew job.. but its actually not the repair that rips but some other weak spot around it.
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            • Profile picture of the author eccj
              Originally Posted by savidge4 View Post

              I don't see this as a overhaul at all.. the reality is I suspect they are NOT in the space what so ever.. its not an overhaul as much as it is market expansion. You can twinkle toes into this, or you can go in with your big boy boots and stomp out some profits.



              The irony in this is that both Ridgid and Ryobi are owned by the same parent company. Ryobi is the lower end consumer product, and Rigdid is the higher contractor / pro series stuff. Many of the internals of both are exactly the same. With my Satellite business the 2 are the mainstays in regards to tools we use. I do work on and repair both. and the reason for that is.. they have websites that actually have replacement part

              With this instance in particular.. I don't see it as soul selling, as much as I see it as partnering high volume retailers. Lower overall profit margins can be made up for through volume. This is BIG business. I can only imagine Gross sales here are in the 10's of millions a year.. and a 10% profit margin isn't such a bad thing... ramp that up to 20 and 40% ( cheap and from china ) and its 10 bedroom 12 bath homes all the way around LOL.

              In regards to replacement. Lets look at pools... When you buy the Pool at Walmart, it has a filter a liner.. a structure, a pump etc.. all of things COULD be replaceable if they were made available. You rip a liner.. you going to buy a whole new pool or replace the liner? I think I saw on the OP's other thread that the liner is 70% the cost of the entire pool... Id buy the liner! LOL



              The are the manufacture of the product.. they are absolutely in the position to do this... the question is are they willing to act on it?



              That's what Liability Insurance is for LOL but really in the 43 we have done there has been a few cases of rips after the wife did the sew job.. but its actually not the repair that rips but some other weak spot around it.
              I say they probably need a new brand...

              Anyways, I hear that Sears is looking to sell Craftsman. I think you should put this stuff together and make a pitch.

              Maybe get Bob Villa and Tim "The Tool Man" Taylor in on the deal and I think you have a billion dollar property.
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  • Profile picture of the author Oziboomer
    Originally Posted by chrisnegro View Post

    HERE IS MY PROBLEM
    Common sense wise, the regular customer off the street will typically only buy 1 replacement part (tops maybe 3) over their lifetime. As I look at this, there will be a huge marketing effort (and cost) to market 1000 or so parts (via an online store) with a target market that typically will not be a volume or "repeat buyer". The logistics to market all of these "parts" will be enormous and very costly....hence [in my opinion] will not get a good ROI for the company - which is my #1 concern.
    Thoughts/Opinions?[/COLOR][/COLOR]
    If I had a big problem I'd break it down into small easy to solve components.

    First I'd sit back and read Eli Goldratt's "It's not luck" or "The Game" just to get the mindset on identifying the constraints.

    I'm kind of thinking that you don't have to make one big website selling components but perhaps just list the most common and profitable replacement parts on Amazon and Ebay and test how things go.

    Don't spend any money on marketing the parts just spend time on getting the right product descriptions in place and maybe some key video assets on Youtube or other social media.

    If someone is looking for a part and it is out there to be purchased they will find it.

    Perhaps you can also partner up with other businesses who are experts at fulfilling replacement parts.

    I've had a few experiences with things like this recently in particular "power supply" for tools or equipment where the gear is still good but the batteries have passed their use by.

    There are some great suppliers in that space...as are several toner replacement suppliers who thrive on supplying toner to people who have old printers that still work. - I still have one business printer a HP5P that is from maybe the mid nineties yet it still functions and works well for what it was first bought for.

    You don't need to re-invent the wheel or even build anything that is too complex here.

    Just list the replacements for sale and optimise to match the market search terms.

    Let the 2nd tier suppliers...not the walmarts...know that the parts exist and can be bought either on Amazon or via a website and let them know they can make a healthy margin selling the replacements.

    The suppliers who want to service their clients will buy and resell the components and the ones who don't want the trouble will refer the enquiry to where you have told them it is available.

    All you really need to do is list one or two components from each product and if people visit websites set up to be a point of contact for the product and they are looking for something they will submit a "request for replacement" form and then you capture the email and also send them a "buy now" link via email where they purchase immediately via Paypal or Amazon and the item is delivered to the customer.

    Best regards,

    Ozi
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    • Profile picture of the author savidge4
      Originally Posted by Oziboomer View Post

      I'm kind of thinking that you don't have to make one big website selling components but perhaps just list the most common and profitable replacement parts on Amazon and Ebay and test how things go.

      Don't spend any money on marketing the parts just spend time on getting the right product descriptions in place and maybe some key video assets on Youtube or other social media.

      If someone is looking for a part and it is out there to be purchased they will find it.
      If you want to test the viability before jumping in the deep end, I could see doing this... I would totally agree that the actually marketing spend in this would be minimal but the content placement and usage is KEY.

      Here is the thing for me.. 35% of the WORLD market.... They are not selling hundreds a year.. its in the thousands.. 10's of thousands... 100's of thousands. 1 in 3 non permanent pools the WORLD over they manufacture. When I look at it this way... the parts themselves, they are the easy part... Hell just list the whole inventory on Amazon and call it a day.... But what do we discuss here time and again.. Owning the web property. Even with 1000 items.. You break Amazons TOS and out the door you go.

      The main interest as I see it, is in the list... How to get the owners of all these products on a mailing list.. if they bought once, they will buy again correct? 35% of the WORLD market, and I would venture to say they probably have access to less than 1% of their current customers with their 800 number registration process.

      The EPIC fail here is not lack of aftermarket product sales... its in the lack of ongoing communication with their customer base - there PROVEN buyer base. The product sales are icing on the cake at that point. Stop looking at the sale and start looking at the potential lifespan of the customer relationship... THAT is where the money is!
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      • Profile picture of the author mojo1
        Originally Posted by savidge4 View Post

        If you want to test the viability before jumping in the deep end, I could see doing this... I would totally agree that the actually marketing spend in this would be minimal but the content placement and usage is KEY.

        Here is the thing for me.. 35% of the WORLD market.... They are not selling hundreds a year.. its in the thousands.. 10's of thousands... 100's of thousands. 1 in 3 non permanent pools the WORLD over they manufacture. When I look at it this way... the parts themselves, they are the easy part... Hell just list the whole inventory on Amazon and call it a day.... But what do we discuss here time and again.. Owning the web property. Even with 1000 items.. You break Amazons TOS and out the door you go.

        The main interest as I see it, is in the list... How to get the owners of all these products on a mailing list.. if they bought once, they will buy again correct? 35% of the WORLD market, and I would venture to say they probably have access to less than 1% of their current customers with their 800 number registration process.

        The EPIC fail here is not lack of aftermarket product sales... its in the lack of ongoing communication with their customer base - there PROVEN buyer base. The product sales are icing on the cake at that point. Stop looking at the sale and start looking at the potential lifespan of the customer relationship... THAT is where the money is!
        Samcart.com is the solution to continued communication after the sale. This product creator has figured out how to pull customer data into its software and integrates with most of the major marketing automation providers including infusionsoft along with 1 click upsell opportunities after the checkout....

        It also offer customized Paypal checkout pages which currently look awful, are limited in functionality and will again capture customer contact data which allow for continued communication long after the initial sale.
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  • Profile picture of the author mojo1
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  • As some have already mentioned, Chris, you're actually sitting on a goldmine. I would start digging, cultivating and chipping away as quickly as possible until you reach pay dirt. Opening a store with Amazon is definitely an option, just keep in mind they will get 15% referral fee plus whatever else depending on what seller program you end up with. You'll have to make sure the profit margin is worth it.

    I worked with an aircraft parts supply store before. Their biggest buyers were military or aircraft repair companies. They started wanting to target smaller businesses that don't normally buy large quantities of parts, but because they did, their business grew significantly.

    True, your average consumer might not buy no more than 2 or 3 components from you in their lifetime, but when you're talking about thousands upon thousands ordering just 2 or 3, that's a nice sum of revenue. Ever read The Long Tail Theory?

    If I were you, I'd get the ecommerce site up and running with the product information and pricing on there as soon as possible so you can start getting some traffic from the search engines. Let time and content do its thing, because if you have that many products on your website, you'll definitely get some traffic organically without much effort.

    You just have to focus on having a nice website to convert the traffic though. I can't see your signature to see the site. I'm sure you've done well with it. Best of luck.

    Also, instead of selling to Christmas/pool specialty stores as you've mentioned (those guys may already have a supplier and you'd really have to offer a great deal to win them over), I would suggest partnering up with other kinds of specialty stores and exchange banners on each others' websites. It makes you money, it makes them money without neither one spending any money. That's an easy "yes" for them to work with you.
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