Don’t be the Cheapest

In a market that’s saturated with competition, with everything else being equal, the one that offers the lowest price is usually either the newbie or the laziest…or both.  I say this is usually the case because on rare occasions, they can also be the smartest if there’s more to them than just being the cheapest.

Why do many businesses try to offer the lowest this, the lowest that, free this, free that?  Because it’s by far the easiest way to compete.  Price may be one factor that affects a customer’s decision to buy, but it’s not the only thing.  For a lot of businesses, it’s too much work to try to figure out everything else that affects a customer’s purchasing decision, so they just try to compete on price.

I’ve learned never to engage in price wars.  There will always be somebody that will sell things cheaper.  Somebody can always find ways to make the same products we make cheaper.  There is always someone who values their time less, has less overhead, and is willing to give up more for less money.

If your only advantage over the competition is that you cost less, then there’s really not much that sets you apart.  You run the risk of having the most volatile client base–the price shoppers.  If the only reason your customers are shopping with you is because you cost less, they will drop you without batting an eyelash when someone else comes in cheaper.

Focus on offering true value, not just a better deal.  Build something spectacular, something worth talking about, something people need and want, something only YOU can create, something only YOU can provide.  When you’ve captured a market with something that’s uniquely yours, the world will be your oyster.

7 Ways to Irritate an Online Retailer

After years of dealing with relatively small online retailers and being one myself, I get to hear a lot of the rants about some of the most annoying customer behaviors.  I personally find them amusing–as long as I’m not dealing with them.  If you have nothing better to do and want to irritate the living crap out of one of the dot com stores out there, here’s how:

1.  Pretend you can’t read their store policies. A lot of customers either like pushing the limits of a store’s return policy for fun, or they think they’re exempt from having to follow the rules. Regular product returns are sometimes annoying enough as it is, but when customers try to test your patience by trying to return something that is not eligible for return/exchange because it’s dirty, used or smelly, has gone beyond the return period by 2 years, or even something purchased from another store, it just drives retailers up the wall.  Constantly buying and returning stuff from them is just as equally annoying.  Store policies are there for a reason.  It specifically states what the retailer can and can’t do, depending on how much losses they can afford to eat.  Usually, the bigger the store, the more lenient the policies tend to be.  Small stores simply cannot always afford to eat the costs that big merchandisers can just easily write off as the cost of doing business.  If you don’t agree with how they decide to do business, just go somewhere else.  Don’t make them have to bend their rules just for you.

2. Make ridiculous requests like asking them to price-match non-existent deals or requesting for free stuff or samples. While some stores do explicitly advertise that they price-match, if the store you’re shopping at doesn’t offer such a thing, don’t ask.  Asking them to price-match just sends them the message that you think they’re desperate for a sale.  In our industry, we get people emailing us promising to buy several dozen diapers and that they will be referring us to all their pregnant friends if we gave them a sample that typically retails for over $18.  You’re basically insulting our intelligence by doing this because there’s probably 50 other people ahead of you that has sent the same request that day.  Seriously folks, do you actually go up to your grocery store, grab a bag of chips and ask them if you can have it for free and that you will shop there if they let you have it??  Will you go grab a pack of toilet paper and tell them you’ll buy from them forever if you like the toilet paper??  Or if they can match the price the dollar-store is offering??  If you can’t do it in real life, don’t do it online.

3. Take up 2 hours of their time and then buy the products from the store that sells it cheaper. A lot of our retailers have very highly informative websites that they’ve put a lot of time and effort into and just love helping customers navigate their way through the complex, and sometimes intimidating options of cloth diapering.  While most of them do it from the goodness of their hearts, they also hope that you’ll buy from them out of the goodness of your heart.  Employees at big retail stores or online stores get paid regardless of if you buy from them or not.  They can talk to you all day for all they care.  But small online stores that are mostly 1-man (or woman) or family type operations don’t get paid by the hour.  If you appreciate the help they give you, show it by buying from them.

4. Act like you’re their only customer and that they have nothing else to do. This includes calling them late at night, on weekends or to ask about the status of your order an hour after you just placed it.  Some online stores may not have as much sales as Amazon, but that doesn’t mean the owners don’t have a life.

5. Gripe about how they’re making money out of you. People often like to tell retailers how much shipping should cost, or that they know how much they purchased their merchandise for, so they are ripping people off by marking it up.  Heaven forbid they actually make money!!  Yes, you’re the almighty customer, but that doesn’t give you the right to determine how much profit a business should make.   If you don’t agree with the prices, just move on.  There’s no point in harassing retailers about their prices or complaining about it.  Just because some online stores are operated at the owners’ homes, doesn’t mean they don’t have expenses to cover, much less mouths to feed.  Unless you’re shopping at a non-profit organization, expect to pay more than what it costs them to actually operate.  Some stores like (or need)  to make money, and for whatever reason, some stores don’t.

6. Threaten them with a bad review or a complaint if they don’t give you what you want. If you really want to annoy an online store owner, this is one sure-fire way to do it.  You’re basically cornering them unfairly into giving into your demands.  Nobody wants a bad review, ever.  They’ll either give in to what you want them to do while secretly cursing you and every living creature related to you, or they’ll just ignore you.  Now this only applies to non-fraudulent transactions.  I do realize that there are fly-by-night stores that are just out to make a quick buck.  The more established stores will probably just ignore you, especially if they know they’ve not done anything wrong.  This is usually a sign that you’re being unreasonable.  If you really have a legitimate complaint, be nice and polite about it.  State the facts as they are and leave the threats out.  You’ll have better chances of getting a favorable response that way than acting like a whiny brat.  Trust me, most stores don’t exist to intentionally make your life miserable.

7. Be rude, call them names, complain about the typo error on their website, or how their incompetence has ruined your life. Is your life really that bad??

Let’s face it, a lot of customers feel 10 feet tall when they’re hiding behind their computers and tend to do/say things they wouldn’t otherwise do when they’re dealing with you face to face.  Many customers don’t realize there’s a human being with their own thoughts and emotions reading and processing customer emails and issues.  I think a lot of people have taken the “customer is always right” mentality to a whole new level.  Bigger retailers can afford to spend much more to woo a customer by giving price breaks, free shipping, free returns, free samples, free everything and the kitchen sink, plus unlimited phone counseling.  But not with a mom & pop-type operation that depends on the profits of each sale they get and are trying to juggle time between their business and family life.  We all want that personalized customer service that a small retailer can give, but too many expect to get the benefits that big stores offer.  Sometimes it’s just not possible.  You either get one or the other, not both.  Some stores can figure out how to offer both and still stay in business, and that’s great.

I’m not trying to make being small as an excuse for poor customer service.  Neither am I trying to bash our customers.  My point is that we all need to shop more consciously and be mindful of our actions.  We all need to stop thinking that somebody else will foot the bill.  A website is not just a website, there’s a person making it work.  An online store isn’t a robot, there’s a person filling orders for it that may sometimes accidentally make mistakes.  An email recepient is not a punching bag.  There are some things small online stores just can’t grant you.  Sometimes there are things you would normally expect that even a big operation can’t or won’t grant you now.  But that’s no reason not to support them if they can give you what you actually really NEED.  When the big corporations are going bankrupt and begging for bailouts, many people don’t realize that it’s the small businesses that will get the world out of the financial mess we are in.  As I always tell my 2 boys, let’s all just play together nicely.

How I Got My Mother-in-Law Out of Prison

It took us (me and my husband) a few months, but we sure did it.  We got his mom out of prison. Yes we live in Tennessee, and my husband and his mom’s side of the family were all born and raised here, but this isn’t one of those freaky redneck stories that you hear about in the 6 o’clock news.

Kathy, my mother-in-law, actually worked for one of the high-security prisons here as a corrections officer.  For over 10 years, her job was to teach inmates how to sew and supervised the production line.  But for as long as I can remember, I don’t think she really liked it there.  She seems to always be complaining about her supervisor, stuff they have to do, etc.  And she’s not complaining because she’s one of those lazy people that just want to get out of having to work hard, in fact, she’s too much of a hard-worker that she makes a lot of people look bad.

In 2007, we decided that if we hit a million dollars in sales that year, that I’d like to offer Kathy to work with us.  Back then, we had 2 employees plus me and my husband on the payroll, and a bookkeeper.  Our problem was that those 2 employees we had constantly needed to be supervised or nothing would get done.  We felt that they were a little too close in age to us that they viewed us more as buddies than bosses.  We needed an authority figure in the office to keep employees, and future employees in line.  The business had a lot of potential and had been doubling in volume since its inception.  We now needed to add structure to our operations if we wanted to keep the momentum going.  I figured that if Kathy can supervise over 2 dozen hardened criminals day in and day out, these 2 little employees we have will probably seem like ants to her.  We would have needed to hire somebody anyway, might as well be her.  Our bookkeeper is actually her sister-in-law, so I know they’re going to get along well.

She didn’t immediately jump on our offer though.  She had to think about it for a few weeks.  I guess I can’t blame her.  She’s got job security where she’s at, benefits, etc.  It’s hard to get fired from a state job, unless you really screw things up.  Maybe she also didn’t think our company might be stable enough.  In fact, she didn’t even really take me seriously when I first mentioned I was going to use cloth diapers on our first child.  But I think she was also worried that working for us might put a strain on our relationship as a family.  We don’t have that typical mother-in-law/daughter-in-law type of friction that a lot of people have.  We actually get along very well.  But eventually, she decided to go for it and join us.

As of September of last year, my husband officially became her boss.  He jokes around that he waited 30-something years to get to boss his mom around.  Payback time!!! 

Having her work with us has took a little bit of adjustment though.  We kinda had to “detox” her from a lot of habits and old mindsets she developed working for a high security prison.  It took her a while to be comfortable with a lunch break that had no specific time–just whenever she felt like taking one.  Or that forgetting to clock in/out for work won’t result in dire consequences.  And that it’s okay to hire somebody with body piercings and green hair.

I’m a firm believer that one needs to work in a field they truly enjoy, and not only because they need a paycheck.  Doing something you don’t really like but are forced to do just because you need the money will drain the living hell out of you.  We don’t necessarily hire people with the longest resumes or the best qualifications.  We try to hire people who we think will enjoy the work and the environment we have to offer.

It has been great having her join us though.  Having her now means we don’t have to worry that things are getting done, and done properly, at the office.  Recently, we’ve also put her in charge of managing our new production facility beside our office.  But more than just having a job for Kathy, having her work with us means that she’ll be able to spend more time with her son, and the grandkids.  It means she gets to experience our family’s journey with us.

Selling Your Soul to Big Box Stores - Part 2

When you start out as a small company from your basement/garage, getting your products into big box stores is like a validation that “you’ve arrived”, or that you’ve made it.  You’re no longer some unknown peddler because you’re now shipping products out by the truckloads.  You also think that having your products in all the thousands of chain stores all across the country translates to multiple 0’s added to your bank account.

Getting into big box stores can either make you or break you.  Unless you have a really low cost item that is easy and cheap to mass produce, doesn’t take a genius to figure out what it is, and have investors or a really big trust fund to back you up, you might as well forget it.  One of the biggest chain stores in the country has been known to cause more business bankruptcies in the U.S. than anything.  A friend of ours got an order for 4,000 bags from one of the baby chain stores.  Because she was having her stuff made in China, it took over 4 months for her to receive the products.  By that time, the chain store decided they didn’t want them anymore.  What do you do now with all these bags that had customized packaging just for that store that decided to change their mind?  When you have products made in China, you have to pay for them upfront.  Double ouch!

Cloth diapers, at least the ones we make, are probably not best sold at chain stores.  It’s like having a registered nurse perform brain surgery.  There are a lot of variables in making the system work, and the concept is still too new to be adapted by the masses and their automatic gag-reflex at the thought of cloth diapers.  And I’m not sure it would be possible to require the staff of a chain store to educate themselves in how to use our products so they can answer any question a customer might have.  I think that would be asking too much of them.

After reviewing everything we have to do just to get into the big box stores and a lot of soul searching, none of it felt right.  The stores don’t have to do anything but they have to get tremendously lower pricing just because of who they are and the clout they have.  They don’t have to market your products but they get advertising allowances.  They don’t have to have a clue how to use your products, but they’ll probably get the sale anyway since the customer (that doesn’t know how to use the product either) can just return it and claim it as defective if they can’t figure it out.  And if the store chain decides your product isn’t selling fast enough, if at all, they can just drop you like a hot potato and either clearance your products or send them all back to you.  Nothing personal, it’s just business.  You’re just a commodity item to them.  It doesn’t matter that you just put up your entire life savings to be able to afford that production run to fill their order.  That’s not their problem.

Then I look back at all the retailers we already have and those who’ve supported us right from the start, from Australia all the way to Iceland.  They juggle trying to teach a new customer how to properly use and wash our products with a baby on their hip.  They educate other moms about the benefits of cloth diapering via email while nursing a newborn at their keyboards.  They are constantly thinking of better ways to serve their customers while cooking dinner.  Sometimes, they will forgo buying their kids little luxuries just so they can afford to buy the inventory to fill a customer order.  They either stay up late past midnight or wake up really early to answer emails and pack orders just so they can spend the rest of the day with their kids.  If a customer is having trouble with any of the products they purchased, our retailers will troubleshoot the problem with them until they get it right.  They take full responsibility for any of the inventory they decide to stock in their store and only purchase what they can sell.  They market themselves, their store and the products they carry using innovative practices and by building their own followers and connecting with their own communities.  They can make a much bigger difference in the life of one mom and their own families than any of the big box stores can.  They’ve supported us through all the ups and downs, product revisions, price changes, shipping delays and backorders.

Can it get any better than this?  I don’t know.  But how can we risk taking sales away from them and giving to a faceless corporation that may not really care?  There’s really no reason for us to get into the big box stores.  The grass isn’t always greener on the other side.  We’re still growing by leaps & bounds doing what we’re doing.  We’re able to provide jobs and a means of income to a lot of people who truly believe in what they do.  And we’re creating products that help families without having to compromise anything.  While world domination may sound attractive and what a lot of companies choose to aim for, we prefer to practice concsious capitalism.  Right now, I don’t see the point in reaching for the stars when we already have the whole world underneath & supporting us.

Selling your Soul to Big Box Stores - Part 1

Early last year, we felt as though the natural progression of the business was to start getting into big box stores (Target, Walmart, Babies R Us, etc.).  We felt we were ready for it.  And we hear a lot of people saying that maybe more moms would consider cloth diapers if they were in chain stores.

We hired a consultant whose job was to introduce us to the decision-makers for the big box stores, and to give us advise on how to properly present ourselves to the giants.  To be able to get in the game these big players played, we had to figure out the following:

1. Pricing. First thing on the agenda was to create a price sheet with multiple pricing levels.  The bigger the chain was, the lower prices they got.  We also had to factor in giving advertising allowances, extra markup for reps, etc.  By the time everything was said & done, we pretty much had to sell our products at a much lower price than what we were currently offering our retailers.  If we were to continue having our products made in the U.S., we’d be making a whopping 50 cents on each diaper that would retail at about $25.  We might be able to squeeze $1 if we really tried.  We’d have to “dumb down” our products by using cheaper materials if we wanted to make more money.  But if we were going to do that, we might as well just have them made in China.

2. Packaging. The product has to “pop” when placed on store shelves.  People will have to quickly understand what the product was just by looking at it.  I’m not sure if you can really put everything you need to know about cloth diapers on just the product’s packaging.  It’s not exactly as self-explanatory as toothpicks or socks.  Since we typically just sell to online retailers who mostly work at home, there was no need for any kind of elaborate packaging.  Those that had brick & mortar stores pretty much had their own way of displaying our products.  There was no need to have a ’self-explanatory’ type of packaging because the store owners were the one telling their customers how to best use our products.  But if we wanted to be in the bigger chain stores, we had to have standardized packaging (singles, 3-packs, 12-packs), UPC codes, lot numbers, case packs, pallet packs, and the list goes on.  We will have to invest A LOT of money in packaging.  Not just for the products that go on the shelves, but even for the boxes that the products will be shipped in.

3. Production. We needed to make sure that we had production ramped up to a level where we’d be able to fill a big order in a matter of weeks.  This means that we would have to carry a lot of the materials in stock & ready to be cut & sewn at any given point in time.  Most of our materials are custom-made for us and takes 6-8 weeks to be made and shipped.  We usually only keep about 3-4 month’s worth of materials, but if we were to get a big box store account, we’d have to carry maybe 3 times that amount.  But that is if we kept production in the U.S.

4. Customer Service Issues. We all know that big box stores have very lenient return policies.  While most of our online retailers carry a 30-day return policy on unwashed & unused items, big box stores typically have 90-day return policies with no restrictions.  This means that you can turn a nice-looking shirt into a dish rag, tell the store clerk there’s something wrong with the shirt, return it and get your money back as long as it’s within 90 days.  The store takes it back, dumps it into a box, sends it back to the manufacturer and gets a credit back for all the returned items PLUS the cost of shipping it back to you.  One of the major online stores that approached us had a policy that we needed to respond to any customer email sent through their store within 24 hrs (regardless of weekends or holidays) or we get fined $5.  Product returns/exchanges also needed to be responded to within 24 hrs.  Otherwise, they will respond to the inquiry themselves and charge us for whatever it costs them to resolve the problem, plus $5.  So if we decided to take off for some federal holiday, we’d have fines gallore to come back to work to.  Basically what all this boils down to is that these big merchants are absolved from any kind of responsibility for your product other than to put it in their stores.

5. Payment. We would need to be able to float several tens and even hundreds of thousands of dollars worth of invoices for at least 30 days.  AT LEAST 30 DAYS.  We’ll need to give at least 2 more weeks for late payment.  Remember all those customer service issues I just mentioned?  They don’t bill you for them, they take it out of the check they’re supposed to pay you.  One manufacturer we knew that had her products in a baby chain store said that a lot of times, it felt as if she was paying them to sell her products.

This is by no means everything that we needed to do, and just part of an extensive list of things we have to comply with.  As we were trying to work through all this and evaluating our sanity for even considering it, representatives from the big box stores started approaching us.  Even major online retailers started inquiring about adding our products to their site that gets tens of millions of visitors a month.  Holy crap!  That’s what we wanted, right?  We stalled on the vendor agreements and after several months of talking to other manufacturers, I seriously don’t see why anybody would want to put their products in the hands of the chain stores.  Sure you’d get more product visibility, and the prestige in being able to say your products are in chain stores, but at what cost?  It almost feels like you’d have to sell your soul.

To be continued….

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