Welcome to part 3 of our series on the 4 pillars of selling merchandise. The first two pillars we discussed, hand-to-hand sales and vending, both involved face-to-face interaction between you and your customers. Today we’re going to discuss a method of selling merchandise that’s entirely different: direct shipping. Let’s take a look.
Pillar 3: Direct Shipping
What is direct shipping? Simply put, it’s when you ship a physical product from your inventory directly to your customer. In order to use the direct shipping method, you must keep a physical inventory of your products. Is keeping inventory good or bad? Well, it’s got benefits and drawbacks.
Keeping a physical inventory is good because it enables you to personally inspect each piece of merchandise before it is shipped. Because you are responsible for the packaging and presentation of the order, you have a lot of options for personalization. For example, many small businesses like to include a hand-written thank you note with each order.
Wrapping is another great way to personalize an order. One example would be to wrap the folded garments in some kind of decorative tissue paper and tie the bundle with a ribbon or seal it with a sticker. There are also less labor-intensive options for personalizing orders. You can give the customer a redeemable code for a discount on their next purchase. You can throw in a free item, such as a sticker. Direct shipments are also a great way to send any printed marketing material from your business or your affiliates.
Why is personalization important? Because it creates an experience for your customers. Think about the experience of walking into a Nike store. The lights. The music. That new shoe smell. There are other customers in the store, as well as salespeople, which adds to the atmosphere. The store is designed and decorated in a certain way, using color and space and various combinations of wood and glass and metal. When you make a purchase, you don’t just get the shoes. You get the box they come in, and the shopping bag. For some brands, carrying the bag containing your purchase is just as much a part of the shopping experience as trying on the shoe.
Shopping at a Nike store is an experience. Shopping online is a very different experience. Your customers aren’t going to be able to see and touch and try on their garments before they purchase them. You can control the look of your website, but things like music, smell, and atmosphere are out of your control. The truth is, every customer that makes a purchase on your website will have a different shopping experience because of those variables. So what can you control in the online shopping experience? Personalization of the orders. It’s pretty much your only opportunity to put a little bit of your brand’s personality into the experience for your customer.
Now to the drawbacks of having a physical inventory. When you’re just starting out, your inventory might consist of two or three cardboard boxes that sit on the floor in your closet. But as your business grows, so does your inventory. Having a physical inventory requires you to have somewhere to store it. Not everyone has enough space in their home to store all their merchandise. Once you outgrow the space in your home, you will have to pay to store your inventory somewhere else, which can be a huge expense that cuts into your profits.
Another key drawback to maintaining physical inventory is the accumulation of unsold pieces. Say you’ve printed a design that didn’t sell many units. Now you’re sitting on an inventory of 400 t-shirts. How much space do they take up? Should you put the item on sale to try to get rid of them? How long should you keep the sale going? What if you put them on sale and you still can’t get rid of them? How long should you keep them? When you do decide to get rid of them, what will you do with them? Unsold inventory can be a huge waste of money, space, and time.
Join us next week for the 4th and final of our special mini-series on selling merchandise, when we will talk about pillar number 4: drop shipment.