Emarketers’ Bullish Outlook

Wholesalers of everything from lawn décor to baby clothes, Triple-A batteries to lingerie, are predicting strong finishes in 2006, which has already recorded double-digit growth.

In chorus, they all sing the same melody: a song about how sales growth on the web keyed their success this year. They also expect the trend to continue in 2007.

This year’s strong finish should come as no surprise, given that online sales over the first three quarters have been substantially higher than sales during all of 2005.

Gaining further momentum, Forrester Research predicts that Internet shopping will increase by 23 percent during the last quarter of this year.

In view of packed parking lots, pushy crowds, over worked sales staffs, out of stock items and the like, the convenience of web gifting is not difficult to grasp. Of course, these are only a few of the holiday traditions awaiting shoppers, as the 2006 buying frenzy kicks into high gear. More consumers than ever are avoiding last minute mall trips and the anticipated hassle, by choosing to shop online.

Consequently, wholesalers and retailers with an emphasized focus on the web will not only reap the benefits of the season, but also get a head start on what promises to be a remarkable 2007. First, let us take a look back at just a few triumphs of 2006:

Organic VS. Paid Search
“We have seen sales grow by approximately 35 percent over the past 12 months,” said Matt Post, vice president of Etronity, Inc., in Anaheim, CA. “We have seen tremendous growth. It is been unbelievable. We have been able to increase our customer retention rate by narrowing down our marketing efforts. We have simply gotten better at targeting across the board and messaging things to where they need to be.”

In one example, through inquiries made by its customer service reps, Etronity was able to identify what keywords would be effective in search campaigns by learning where the customers originally learned about the wholesaler. In particular, if it were Google, Yahoo or MSN, they would ask the customer if they remembered which keywords were used in the search. The feedback would guide not only the paid search campaigns but also the company’s organic efforts for its chief site at www.wholesalebabyblanks.com, where it offers baby clothing and accessories such as bibs, onesies, hats and preemies.

“Organic has outperformed paid in the end,” Post said. “We have optimized our website to pick up traffic from both organic search and paid search. It is important to find that right balance. For their own reasons, if they find out about our website without having to click on a paid ad, they just seem more comfortable and willing to try out products.”

The organic campaigns also bear fruit at vertical sites like WholesaleCentral.com, where WholesaleBabyBlanks.com is listed in the Baby Products Section. “WholesaleCentral.com has positioning on a lot of keywords that allow us, as a member of their network, to indirectly benefit from,” he said. “We get about as much traffic, registrations and sales from WholesaleCentral.com as we do Google. When you think about that, it is pretty amazing. When we signed up, we were expecting a lot less traffic. But we have been extremely happy with being there.”

Etronity found that its customer service was so effective during business hours that it would be advantageous to streamline web traffic straight to the phone reps. The easiest way of doing this was by taking the price list off of the website and encouraging them to call.

“We believe in combining the convenience of the Internet with the human interaction that can only be found offline with an actual person’s voice,” Post said. “By actually speaking to a live person, they know that they are dealing with a real, trustworthy company. They know you are a legitimate business and not some 12 year old kid with a bunch of boxes in his room.”

Retailers who visit WholesaleBabyBlanks.com can quickly register by clicking a button on the top right hand corner of the homepage. Even though Post has second thoughts about what he calls the passivity of email compared to telesales, he said that his company plans to experiment with electronic messaging during 2007. With growth like Etronity has seen, they can afford to try some new tricks.

“We are not ready to announce them yet, but we have big plans on other new features too,” Post said. “Because of these new features, we think that our customer retention rate will be even higher. We think our sales will be at least 40 percent higher in 2007 compared to this year.”

The ways in which Etronity nurtured its growth have been echoed across the marketplace in terms of making the most of free search campaigns on major portals and taking advantage of directories at vertical destinations. For example, add Marc Joseph to the list of wholesale industry executives who agrees with Post on the value of organic search marketing over pay per click. The president of Dollar Days and renowned author of, “The Secrets of Retailing: How to Beat Wal-Mart,” says a healthy mix of paid and free search campaigns works, but in the end, the latter
example is more profitable.

“Our most successful or profitable search efforts have always been organic, although we do some pay per click as well,” he said. “I think a big part of doing well with search engine optimization is by making sure that your products and services are relevant to what people want.”

As evidence, Dollar Days (www.dollardays.com) has recently made the Inc 500 list, coming in as the 15th fastest growing company. In fact, the five year old Phoenix based firm is projecting a year ending 50 percent sales growth. “It has just become so much more acceptable for people to be doing trade on the Internet,” Joseph said. “There are more and more people doing their wholesale and closeout business online, and we are riding that wave.”

Remerchandising Boosts Sales
If you have got a couple key products that simply outperform the rest of your offering, perhaps there are variations of them that can lift your sales by 15 to 25 percent. Outdoor dÄcor wholesaler, Super Quality, experimented with this approach and recorded both a 23 percent rise in overall revenue and a 19 percent lift in online sales. Because of the extra products, more web viewers were finding their way from the search engines to the firm’s web store at
www.wholesalecentral.com/superquality/store.cfm.

While already providing a slew of garden/lawn spinners and wind ornaments, the company decided to diversify its selection of these items. Instead of just offering nylon spinners, as one example, it added a metal line. This move allowed them to offer more flexibility to its core audience of hardware, garden and gift stores. Super Quality even introduced six pack assortments of spinners, with colors of red, green, blue and rainbow, among others.

“We let them buy a variety of spinners in assortment packs,” said Brian Quach of Super Quality. “Our customers like this feature because they do not have to go through so many pages of product to get every type of spinner they want. This saves them time, and of course we are all busy, so time is money. There are just so many things going on in the marketplace right now; the less time you make them spend at your site, the more likely they will come back to take advantage of the convenience you created. Diversifying my product offering truly helped sales. The more products I added, the more customers I got. It should also be noted that I spent my advertising dollars very wisely. I was fortunate because I was a member at WholesaleCentral.com, which produced a lot of hits for me.”

Indeed, expansion seems to be part of the conversation, as we look forward to switching gears for 2007. Quach said an integral part of his company’s plans in the near future was adding more designs. “In 2007, we want to continually introduce new exciting garden decor items for our customers,” Quach said. “There are more and more people using the Internet to do wholesale to retail business these days. At first, people were shy about putting their credit cards into the computer, but now they are getting more and more used to it. It is better for wholesalers and better for retailers this way.”

Lingerie’s Web Appeal
Most mainstream press would have you believe that retailers are always the first in a niche to adapt to ecommerce and that wholesalers come in second, which is not necessarily correct, according to Michael Choo, assistant manager for Sensual Mystique in Walnut, CA.

“A lot of online retailers are simply taking over the marketplace, and it is going to be hard for the traditional stores to compete,” he said. “They are already having a lot of trouble in my opinion. It is not actually bad for us. As a wholesaler, we do not care because we have changed with the times. But it is bad for the traditional brick and mortar stores who have not made a serious effort to use the Internet as a competition tool. I think you will see more and more of that during 2007.”

Choo said that his company, which can be found in the WholesaleCentral.com Lingerie Category, as well as at www.sensualmystique.com, saw overall revenue go up by, “At least 25 percent,” compared to 2005. He added that his firm’s web division registered a 30 percent increase in orders and that international sales lifted by 35 percent.

“In terms of the advertising and marketing that we employ, we do really well with WholesaleCentral.com and a combination of paid and organic with Google,” he said. “I think what you will see in 2007 in our sector is online lingerie space for retailers continuing to become more competitive. A lot of busy people do not have time to shop in the morning or afternoon, so they buy their lingerie and clothes at night. The only way to do that is online, and it is easy. Plus, a lot of women are too shy to buy their negligee in a store, so the Internet is the perfect tool to give them the privacy they desire."

Companies in the story include:

Etronity Inc.
Wholesale-Baby-Clothes.com
8503 Woodcove Drive, Ste.128
Anaheim, CA 92808
Tel.: 800-707-9692
Website: www.wholesale-baby-clothes.com
Or http://www.wholesale-baby-clothes.com/


Dollar Days International, LLC
7575 E Redfield Rd
Suite 129
Scottsdale, AZ 85260
Tel.: 837-9569 or 480-922-8155
Fax: 480-922-3764
Email: savings@DollarDays.com
Website: http://www.dollardays.com/

Super Quality
1717 Potrero Ave.
South El Monte, CA 91733
Tel.: 626-443-9883
Fax: 626-443-9003
Email: sqgroups@sbcglobal.net
Website: www.wholesalecentral.com/superquality/store.cfm

Sensual Mystique Inc.
394 South Lemon Ave.
Walnut, CA 91789
Tel.: 909-468-2705
Toll free: 800-346-6110
Fax: 909-468-2704
Website: www.sensualmystique.com/sunshop