14 Secrets to Selling $4 Million: How to Find Digital Success Using Old-Fashioned Values

I adore today’s guest post from Beth Marbach of Downtown Gal. She spent 12 years building a $4 million designer shoe resale business on eBay. Her story has everything: Scrappy moxie, digital prowess and a health dose of good old -fashioned values that catapulted her to success. Whether your business is online, in an office park or on Main Street, you will devour these 14 secrets which Beth was kind enough to share. Enjoy.

In 2001, I was an executive recruiter, and I wanted out. Desperately.

On the side, I started selling books, CDs and DVDs on eBay. With time I moved onto selling dog jackets. My profits on books were $4 to $6; my profits on canine apparel were $19 per jacket.

It was when I spotted a $49 pair of Coach Boots at DSW, which I bought and sold that very evening for $149 that my whole life changed. Twelve years later I had earned $4 million selling designer shoes online. The lessons I learned along the way were many. I honed relationship, business and marketing skills amongst many others.

Here are 14 such lessons I feel were some of the most critical to the success of my business.

1. Make Study Sheets

The success of my business was critically dependent on the monthly trips I took to various designer shoe outlets around the country. I made these trips to purchase shoes, but I also made them to solidify and grow relationships with store personnel.

See, my revenue was determined on the quantity and quality of shoes I could access, and as I could not be in all places at once, that access was greatly determined by the store personnel who thought to call or email me first (before any other reseller) when new inventory arrived.

To help support me in this, I made laminated spreadsheets which included basic information such as store names, phone numbers and addresses. These spreadsheets also included names of all store personnel (which I had met to date), and any information which would be helpful in both personal and work related conversations.  Prior to going into every store I studied these sheets and directed conservations accordingly.

2. Call Ahead

Spreadsheet studying and traveling across the country all prove to be futile if, when you arrive, your favorite sales person has the day off. To prevent this from happening I always called ahead to make sure when I arrived, they were waiting for me.

3. Know the Best Days of the Week to Shop

I was not a store’s average customer. I did not go in and purchase a few pairs of shoes. I went in and made purchases up to $10,000. To do this, I needed the undivided attention of store personnel which meant I needed to go on the slowest shopping days of the week – Monday and Tuesday. 

4. Inexpensive Branding Can Work

My branding did not come from a high priced design shop but from a few hours of my husband’s time with Photoshop. Likewise, my business name was not derived from expensive brainstorming sessions but was simply borrowed from what was, during my single days, my Match.com handle – Downtowngal. (Editor note: See? Told you building an irresistible brand on any budget was possible!)

5. Hire Effectively by Hiring Creatively

Having 100s of pairs of shoes to photograph, inventory and ship required assistance. I hired super smart high school gals, paid them more than the mall and kept them happy by letting them listen to whatever music they wanted.

6. Consider Office Space Very Carefully

Storing 100s of pairs of shoes in a basement and working for 12 years alongside them might seem less than ideal, but doing so saved me $1000s of dollars annually (or 10s of 1000s of dollars over 12 years).

7. Know there is More than One Way to Get Supplies (and Just about Anything Else You Need)

The price of shipping supplies was always a challenge. As a cost savings work around, I utilized the clean (and in good condition) shipping boxes from my local grocery store and daycare center. I then invested 2 cents per branded sticker and placed one on every box I shipped.

8. Become an Expert

95% of what I sold was shoes, and within that I focused on a small handful of designer brands. Developing my niche allowed me to use my time effectively (which was very important when you have two little kids), provided me focus on the key relationships to develop and provided me the ability to increase revenue in ways that would not be feasible had I attempted a broad product line. (Oh, and it greatly reduced daily insanity, so there is that too.)

9. Please Your Accountant

With the enormous number of fraudulent designer shoes in the marketplace, it was critical for me to keep all receipts in the case the legitimacy of my inventory ever came into question. More often than you might imagine customers asked for proof that shoes they purchased from me were legitimate. It was always good to have that validation readily available.

Keeping all receipts also helped quarterly taxes go quicker, ensured I received maximum tax benefits and made my accountant quite happy. (Happy accountant = Happy business.)

10. Categorize Your Customers

Keeping detailed records on my customers including their gender, designer preference and shoe size allowed me to easily contact people when I received shipments in which they might have interest. Sometimes I could even sell shoes to them before I had to take the time and expense to put them on eBay.

11. Consider Online and Offline Inventory Acquisition Options

The majority of the shoes I purchased were from brick and mortar stores; however there were times where I could buy shoes directly off their website. To make this process efficient, I bookmarked 20 stores, which I knew carried the designer shoes I desired. Every morning I would go through these links, purchase desirable footwear and have it shipped directly to my house.

12. Be Nice to Everyone. No Exceptions.

The sales folks at the designer outlet stores were underpaid, overworked and rarely appreciated. I found the simple act of bringing a goodie along – calling and taking coffee orders before I arrived, buying nice chocolate as gifts or bringing in a fruit basket significantly differentiated me from other resellers who, I might add, were frequently downright ruthless to store personnel.

Who wants to call a jerk to give them the heads up that new inventory has arrived?

No one.

Who wants to call the woman who is nice to them every time she sees them, brings them coffee and gets to know them so well she is invited to their wedding?

Well, that is how I built my business. It is also how I made an enormous number of wonderful friends.

13. Thank People the Old Fashioned Way

When I was growing up my parents made me send handwritten thank you notes when someone extended kindness towards me. When I received a shipment from a reseller who thought to call me first, I did the same. Within that note I included a $25 Starbucks gift card. For one quick note and a small gift of coffee, I was always one of the first resellers they called.

14. And Keep Thanking Them. All of Them.

I certainly wouldn’t have a business without the designer outlet personnel I befriended over the years, but I also wouldn’t have a business if it weren’t for the UPS drivers, the folks at the post office, my staff and of course, my customers. Christmas time at DowntownGal Shoes meant it was “thank you” time.

To my UPS drivers and post office friends I gave wonderful holiday cakes and popcorn tins, the gals I worked with could pick any pair of shoes they wanted, and the sales associates at the designer outlets would receive a  Starbucks gift certificate (with a higher value than the normal $25 cards I gave throughout the year), a card and a photo of my family. And regardless of what time of year it was, I included a free shoe shine kit for my customers with every purchase.

In the end, I found that although we live in a society that drives very hard towards the big things; it is, in fact, the little things that guarantee we get there.

About the author: To learn more about Beth Marbach, and her 12 year saga selling $4 million dollar of designer shoes on eBay go to: http://downtowngal.com/

Photo credit:  geishaboy500

Your Call to Action: Which ONE tip will you put into practice to boost your business this week? Please share in the Comments below!

Which problem is killing your business?

As a new book author, I have learned a ton about the publishing industry over the last year or so. I’ve pretty much been riding by the seat of my pants and unspoken rules are revealed to me each day, much like an onion shedding its layers. I used to think publishing a book was fairly straightforward – and it can be if you self-publish and have millions of devoted fans ready to devour your product. But you have to work to get to that point, as Seth Godin just announced: after millions of best-selling books  he’s able to bypass the traditional publishing establishment and self-publish direct to his legions of fans.

Sure, anyone can do this. But do they have the base that Seth has to make that a successful proposition? Well, guess it depends on what your goals are and the size of your tribe.

Putting all that aside, I’ve heard a lot of hoopla casting eBooks, Kindles and iPad’s as the assassins to the traditional brick and mortar stores and your lovely independent bookseller around the corner; That publishing as we know it is a dying due to the new vehicles and opportunities that people with good ideas have for spreading their words.

Well, I have a different theory: it’s not these new technologies or shrinking margins that are going to kill the traditional publishing-bookseller industry: it’s going to be their willingness to adapt and get the heck out of their own way. I present my exhibits to the court below.

Is your business suffering from any of these ailments? If so, better change course before it’s too late:

Exhibit A: Refusal to Acknowledge: At the recent 600 person Pacific Northwest Writers Conference, the elephant in the room was self-publishing and alternate options. While the conference focused heavily on how to sell your book, build your marketing platform, etc, two funny things happened: A breakout on alternate publishing forms erupted in a minor mutiny when attendees demanded to know why the conference was focused on the “song and dance of pitching to big agents and editors” but no one was talking about eBooks and self-publishing as credible options. In this session, a so-called book marketing expert even said: “I don’t believe in social media or authors needing websites. It’s a waste of time.”

Is there a market change or customer need that you are ignoring or refusing to see to protect the status quo?

Exhibit B: Refusal to Adapt: In the large editor panel, I asked what they thought about the long time to market when going the traditional route when I was able to publish with an independent press from contract to book in four months? The response: “Given that reviewers want galleys 3-6 months in advance of the publishing date means you’ll always need a long lead time. Plus it helps with quality control and editing.” Really? The reason we are not going to adapt the model is because the REVIEWERS (Publishers Weekly, et al) won’t adapt their models to current market dynamics? By the time my book’s “galleys” were ready, so was the final book!

Are you allowing the tail to wag the dog when it comes to adapting your manufacturing, marketing or distribution model – instead of adapting to what your customers want and need?

Exhibit C: Refusal to Trust: I had to convince my publisher to post an excerpt on Scribd. She said she’d heard bad things about it and forwarded me an article about an author suing them for copyright infringement. I explained that Scribd itself did not pirate the work; someone else must have posted it and that Scribd is just the channel (like YouTube). I also explained why we should get in front of it and post our excerpt ourselves to control the marketing and message. After all, Chapter 1 is already available on the publisher’s website: What’s to stop someone from stealing it from there? At least on Scribd, people will actually see it who would purchase the book. This fear of piracy and infringement is real, but the upside of promoting the full book is so well worth it.

Are there marketing channels (like social media) or new technologies you are ignoring out of fear, when they could be prime ways to reach your customers?

Exhibit D: Refusal to Coordinate: Because my book is a short run printing (my publisher is not Random House and doesn’t print 50,000 at once) it is listed in a separate “small press” database (DB) on Ingram, one of the distributors in the business. This same DB houses self-published and Print on Demand (POD)  books, and the retail bookstore chains refuse to carry those, mostly because of the lack of return policies and quality concerns. We had to make it very clear to local booksellers that my book is NOT a POD or self-pub and that it’s 100% returnable to convince them to carry a local author. Borders in downtown Seattle agreed and I just did a signing there; Barnes & Noble, however, marked it as POD in their system and the stores are saying they physically can’t order such books through the system and we have to talk to NY. NY has said they will fix the issue, but that the stores are wrong and can order anything they want. I’ve since learned that basically forward-thinking managers can “go rogue” and order the local authors their customers want but it’s not “policy.” We’re stuck in the middle  – trying to give local booksellers great content and signing events to help them boost sales. So now Borders gets me for a signing, while B&N competing down the street can’t get out of their own way. Borders even told me, “People are craving local authors right now – similar to the local food movement!”

Are you not communicating effectively with multiple locations, partners or employees to the point that the only people who lose are your customers? Are your policies getting in the way of you staying competitive or giving your customers what they want?

Brand at work: How DRY Soda’s brand has evolved

Here’s a peek at a case study that will be featured in my upcoming book, Branding Basics for Small Business, due out this Spring/Summer:

A strong brand strategy does not remain stagnant; it can evolve to adapt to changing demands and dynamics while still staying close to its roots. Sharelle Klaus, Founder and CEO of DRY Soda Company (www.drysoda.com), has evolved her strategy while still staying true to her mission of creating a new soda category. Sharelle saw a market need for a modern non-alcoholic beverage when she was pregnant and couldn’t drink alcohol. As a food and wine lover, she grew frustrated with the lack of options available to pair with fine meals. Sharelle hoped for a drink that was simple, all-natural, caffeine-free, low in sugar and made with the highest quality ingredients – a beverage that could complement great food or act as a light refreshment on its own. DRY Sodas come in seven flavors: cucumber, vanilla bean, juniper berry, lavender, lemongrass, kumquat and rhubarb. DRYs brand is modern, all-natural, well-designed and sophisticated and this is conveyed through their gorgeous bottles, their visual identity and the fact that DRY is found in high-end restaurants, stores and at food and wine events.

As the brand grew, they protected it by carefully choosing high-end distribution partners and initially did not want to mass market it in any way. However, consumers’ beverage choices are changing and wellness has become a bigger priority to everyone, not just the higher-end market. People are cutting down on sugar and First Lady Michelle Obama has unveiled an initiative to fight childhood obesity. The New England Journal of Medicine asked soda companies to lower their sweetness level and DRY Soda was the only one that met the requirement. In keeping with their brand as a “modern soda company” they had to evolve the strategy to meet consumers where they are today. So they increased their flavor choices to include more mainstream preferences, decreased their price point to stay competitive, and opened up distribution channels. They are looking to begin selling through Target in 2011, a mass market brand but one with cache and sophistication that aligns well with DRY.

They are staying true to the brand by still choosing those distribution partners carefully. Partners that do not align with their carefully cultivated brand values will be turned down. As they open up distribution, DRY is finding which “brand levers” work in different markets. But they stay on course to the original brand values of all-natural, sophisticated, modern and well-designed so as not to alienate their early adopters.

“We still need to build the brand customer by customer even though we are expanding our reach,” says Sharelle. “We always want any new consumer’s first experience with DRY to be consistent with the brand and you tell your brand story by where people can find you. We build our brand region by region so people can develop strong emotional attachments– and that approach influences how we roll out the product in each new market.” DRY Soda can be found throughout the United States and Canada and in limited international distribution.