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Tuesday, May 16, 2017

Sales Approach $4,300 Half Way Through May and The Importance of Controlling One's Emotions in Business

Sales have continued to be nothing short of phenomenal this month. In addition to strong E-bay sales, we have begun to develop a very strong clientele outside E-bay, and these collectors have placed lots of orders with us for material. We attended our first show in over a year, which was held her in Saint John. I went in with very few expectations this time: my only objective was to put on a good display for the people walking by, to hand out business cards and copies of our blog posts and establish some rapport with the people I met. As it turned out, I was able to meet these expectations and sell $630 at the show as well. Then after I got home last night, a relatively new customer, who collects covers bought over $200 worth of covers, and this purchase led me to start showing him the rest of my covers today. So there could be several hundred more in sales coming from this customer over the next few months. So by the end of today, we have just under $4,300 in sales with 16 days left to go in the month. This is set to be our absolute best month yet.

However, there have been a couple of situations that left me fuming last week:

1. E-bay has announced that we are no longer to have any contact information for ourselves in our listings. So I would have to spend a few days to remove our telephone number from every one of almost 6,500 listings.

2. This comes a month after E-bay announced that we had to get rid of any active content in our listings by June. Fortunately Auctiva was able to do this for me on all but 122 listings. However, they should have been able to do that with all of them. So I'm going to have to spend at least 1 day of time I could be spending doing more important things to fix listings on E-bay that I have already created months ago.

The E-bay situation is not new, but this time it has become abundantly clear that E-bay is never going to stop trying to micro-mange my business. It's what they do. I have long believed that eventually the wholesale changes that they come up with would eventually slow down and ultimately stop - at least for a time. But, there seems to be no limit to the number of ways that they can micro-manage the businesses of their sellers, and I'm just waiting for that fatal policy change that comes at me  when I have 20,000 listings up and I'm half way through my contract. I feel fairly certain that this type of change is coming eventually. I just have no idea of when. It is that feeling of uncertainty and fear that gets me really down every quarter. You expect in business to have to be on your guard for external threats from demographics and your competition, but you never expect your largest threat to be one of your suppliers or service providers.

An astute analogy is to imagine that you are opening a store in a shopping mall. You sign a 5 year lease and pay $100,000 for leasehold improvements and fixtures, and another $50,000 in moving expenses. At first everything is wonderful, with sales coming in and lots of traffic. Then after a few months, you notice officials from the mall standing outside your store telling customers "You know, if you are looking for XYZ product sold by this store here, you can actually find it cheaper down there in that store". The mall management assures you that this is a good business practice because they want to make sure that the shoppers in the mall have the best shopping experience and that they will direct traffic to your store if your prices are lower. You tell them, that you don't understand how they can do this when you are paying them RENT and that you are not a store that competes on price. You try to explain that you compete on the quality of your product and your service, but it falls completely on deaf ears. You are told, "Well, you can cancel your lease and move out with no penalty if you wish. Thank you for being a valued mall tenant.".

Of course after dropping $150,000, you're not going anywhere, so you grudgingly accept this annoying practice and carry on. Then a few months later, mall management comes into your store with a new lease and tells you that by staying in the store, you are accepting the new terms of the lease. They leave and you begin to read the new lease. In the lease they tell you that after two months have passed, you will no longer be allowed to sell one of the products that you carry. No reason is given. You are also told that your prices all have to end in $0.99 because they have done studies that show that this is what shoppers prefer. So you have to go and re-price your entire stock, closing the store for a week, to do this. Again, you aren't going to leave, so you do your best and re-price everything, losing out on a week's revenue to do this. Of course, it doesn't wind up making any difference to YOUR sales, and you knew it wouldn't, because you know your customers. After its all done, things get back to normal, and you have a few really good months in the mall.

Then three months later, they come back to you again, with you guessed it, a new lease. This time they don't like your use of colourful window displays. They tell you that it is distracting to shoppers and you have to change your displays or move out. They also tell you that you are no longer allowed to have your website on your business card or a telephone number, and that the only way your customers can reach you is by coming to the mall in person. When you ask them why they are instituting such a rule, they tell you it is because they are seeing too many instances of sales being completed outside the mall and they just can't have that happening, since they feel entitled to a percentage of all the potential revenue from these shoppers. You've never had any calls from customers before, so you agree to the rule change. But you are annoyed because you just ordered all your business cards the month before, and took out an ad in the yellow pages. Now you are going to have to change everything.

And you sit there wondering: "what's next?" Are they going to tell me how many staff I have to have? Are they going to tell me what my price tags have to look like? What credit cards I must accept? and so on.

Sounds pretty absurd doesn't it? Yet, this is exactly how E-bay today does business and treats its sellers. They were supposed to be a venue, like the yellow pages, where a business could go to sell its product. For the privilege of the traffic, they paid E-bay a fee, and E-bay minded its own business. That is how it used to be before the MBA types who now inhabit management got a hold of it and started the metamorphosis that has turned it into what can best be described as a "racket". These people have clearly never taken ethics courses, or if they have, they weren't paying attention. There used to be certain ethical rules of good business that just didn't get broken when I was growing up in the 1980's and 1990's. I can well remember stamp auctions where you had to be a dealer, with a registered business to bid. Why? Because the auction houses at the time correctly recognized that if they allowed members of the collecting public to bid against dealers, they would be harming the businesses of the dealers - their largest customers. Nowadays, its a free-for-all at every auction, and I have had many collectors tell me that can't pay my retail prices for the full service I provide since they can just bid against me at the same auction I source my material from and get it cheaper.

So, not competing with your own customers used to be a big one. If you were a wholesaler, you didn't go into retail too, or if you did, you did it through a completely different company, so that it at least looked like you weren't doing it. Not taking actions that have the effect of injuring your customers businesses is a fairly well known ethic in business. In common tort law there is  concept of "tortuous interference", which is basically interfering in someone's right to conduct business freely, and it is a tort that historically has allowed the injured party to sue for damages. But E-bay does this all the time by a variety of different things too extensive to list here. However, a few of those things are:

1. They would place ads in your listings for competitors product if that competitor was selling something cheaper than you. They would also put ads from non-e-bay stores that were paying them into your listings. So if you were selling computers, they could put a "Best Buy" ad in your listing. WTF? right? You are paying them, and your competitor is paying them and they are advertising for your competitor in your listing. Unethical? Yeah just  bit. This year, they have stopped that, undoubtedly because they realized they would eventually be sued, but what they have replaced it with now is "promoted listings", which is a form of pay-per-click advertising that is only available to anchor stores like myself. This may benefit me, but it will hurt any seller without an anchor store.

2. They tell you that you have to accept paypal as a form of payment. You can't use any of the other payment gateways, which is odd now, given that supposedly Paypal was spun off from E-bay and is a completely separate entity now. To me this is a form of "tied selling" and tied selling as far as I know is illegal, or at least it was.

3. They manipulate the search results where they put the sellers with the lowest price first, regardless of how much inventory they have, or how much history they have with E-bay and regardless of the overall quality of their item descriptions. They do this to force their sellers to compete on price. They bump listings to the top that offer free shipping and downgrade those that don't. Again, they are trying to force sellers to offer free shipping if they want to be in the top of the search results. Sometimes they hide your listings altogether and don't display them at all. This later practice was clearly illegal and fraudulent when sellers were paying e-bay for each listing. So what E-bay did to get around this was they started offering free listings, but cut the top rated seller discounts and raised final value fees instead. This way they can always say that they can do whatever they want with your listings since you didn't pay for them anyway. The problem with all this is competing purely on price is not competing at all. It doesn't take any business acumen whatsoever to compete on price, and few businesses that do this blindly will succeed. Those that do have a very clear strategy and are aiming at a very specific market. To try and force every seller to compete this way is bad for the sellers, e-bay and ultimately the buyers, because it means that the sellers of quality items will be forced out and replaced by sellers of junk, and that is exactly what is happening.

So as you can see this makes me very upset. Unfortunately for me managing my emotions and concealing them at appropriate times is not my strongest suit. I tend to get worked up and my usual routine is to call customer service at E-bay and complain, trying to get someone more senior up the chain. For a while I actually thought I could reason with someone senior there, but after many conversations I realize that such is not the case. They really don't see good sellers as their greatest asset. To them, it is only the buyers that count, and there is no persuading them to alter course on this. Actually, they may well realize that we are a great asset to them, but they also realize how vulnerable we are as sellers. So the short term consequences of upsetting us is not great, since if one seller leaves, there are many sellers just waiting to give it a shot.

So I've had to realize that while my emotions may be white hot, and I might want to call E-bay and threaten to close my account or some such thing, it is not a good idea, and it is not going to help me deal with the problem, which is over-dependence on one sales channel. E-bay is convenient and relatively easy, but I can see that it is a very bad idea to continue being wholly dependent on them. The sooner I can develop a presence at stamp shows and a customer base outside of E-bay, the better off I will be. So this is just one example of many in business where one has to take a deep breath, step back and think strategically. Getting worked up, angry and depressed doesn't help you think clearly and it doesn't help you deal with the issues at hand. In business, as I am learning, there are going to be a lot of these situations, and while it is OK to experience all these emotions, it is important to be honest with oneself about what the primary driver of the emotion is. In other words, while I may feel very angry at E-bay for what they are doing, my real anger is to myself for being too trusting and not accepting sooner the fact that the rules of business have changed for a lot of businesses. If I accept the new reality, then I can't really be mad at E-bay. I simply make a decision to restructure my business to make the best use of them that I can. Maybe what it means is I only list the cheap stuff on there from now on. Maybe it means that I don't list stamps that have any probability of return, and so on. I'm not sure - I'm still figuring it out. But I wouldn't be able to see any of these clearly if I were still caught up in my emotions.

So, in closing, it is a very important lesson to learn in running a business: feel how you feel. Experience your feelings and get them out, preferably in  safe non-judgmental space, and then once you have let them out, let them go. Refocus yourself on identifying the real problem and finding a solution. But whatever you do, don't waste your time calling management, filing complaints, talking to ombudsmen etc. because whatever victory you will have will be nothing compared to what you have lost in your emotional health and serenity. 

4 comments:

  1. I.m glad to see the business starting to pay off. And it sucks dealing with the customer comes third attitude that dominates the business community these days.

    Just be true to yourself

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    Replies
    1. Thanks Dale. I'm doing my best, and overall it seems to be working quite well. We are fully sustainable now, which I didn't expect to be after 20 months.

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  2. and you get to c your family and long-lasting friends say once or twice a year - FANTASTICK

    ReplyDelete