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Wed Feb 27 2013 12:25:27

Four Tips for Running an Effective Flash Sale

By: Julia Wilkinson

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"Flash Sales," time-limited sales that usually last from a day to 72 hours, are proving to be one of the newest, most effective strategies for online sellers to move merchandise. The practice – now a booming $2 billion business – recently helped ecommerce retailers grow holiday business twice as fast as online merchants who didn’t offer similar “deal of the day” promotions, according to Reuters.

"For retailers, flash sales can be an extremely effective tool in capturing consumers’ attention, getting them to their site and enticing them to buy not only flash items, but also full-price merchandise," said Maria Haggerty, president of fulfillment service Dotcom Distribution, which helped a variety of online retailers deliver on their holiday orders.

"Flash sales work," affirms Forbes Magazine blogger J.J. Colao in a post about how the large ecommerce company Wayfair recently launched the site "Daily Fair" to capitalize on the phenomenon, and companies like Gilt Groupe, Rue La La and One Kings Lane all use the impulse-shopping based strategy.

But retailers ned to be fully prepared to run the sale in terms of logistics before they jump on this trend, according to Haggerty. Before running a flash sale, Dotcom Distribution says e-retailers should plan ahead by considering several questions, including:

1. Do you have the inventory depth to run the sale?

More than 45 percent of flash sale offers sell out faster than anticipated. This means retailers are driving a customer to their site only for him or her to find that the sale item is out-of-stock. A retailer’s logistics provider or department should have the ability to see and track inventory in real-time.

2. Did you select the right products to sell?

Roughly 57 percent of flash sale buyers are women. Do you know who is frequenting your site for these deals? Tapping into similar insights can help retailers select the right product mix for their flash sale demographic.

3. Have you previewed the sale items?

Flash means fast – customers must make quick decisions, especially during the last minutes of a daily deal. Previewing flash sale items first allows customers to get their feet wet before buying the product. Preview it first – they’ll come back.

4. Are you ready to ship the items?

One of the top complaints from flash sale buyers is that their order took four to six weeks to get to them or that their products came in several shipments. Flash sales can be extremely effective when it comes to attracting customers, but if the customer doesn’t get the goods in a timely manner and with transparent communication, they are unlikely to purchase from you again. 

While daily deals are great for increasing sales and highlighting specific items quickly, the end goal for retailers should be to gain new customers, according to a spokesperson for Dotcom Distribution. Flash sales can lead to new customers making full-priced purchases - both during and after the sale, if you run the sale well.

eBay and other such markeplace sellers can use the Markdown Manager feature for stores, or announce their sale via a newsletter, blog or web site.

Have you tried running a flash sale, and how did it work for you? Is it something you think you might try, and why or why not? Post a comment here!

Comments (4) | Permalink

Readers Comments

Four Tips for Running an Effective Flash Sale   Four Tips for Running an Effective Flash Sale

This user has validated their user name. by: Basset

Wed Feb 27 15:30:55 2013

LOL - Julia, as a Buyer I recently had an experience with what could be considered an unannounced ''flash'' sale.

I purchased an item at 75% off from a seller. As is my habit, I then looked in her store & everything was 75% off! Rock bottom prices on pre-owned top brands. Stuff was appearing in her ''sold'' items at a FAST pace. With shipping & fees, I KNOW she was losing money on many items, breaking even at best. This is  the category I sell in so I know the normal pricing. Seller had ST JOHN items $9 to $14, to give you an idea!  

Worried the seller had put in the incorrect percent-off  amount on her sale, I emailed her about it.  I offered to cancel the sale on my too good to be true bargain. I held off on buying any other bargains. When I did not hear back from her within an hour but her stuff kept selling really fast I called eBay customer service to see if they could contact her in the event it was a mistake.

The really nice CS said he would call her to check to see if it was a mistake. (Kudos for that eBay CS with a kind heart!) Having done what I could, I waited for her to contact me. She did and told me she had just decided to have a sale to get rid of stuff and it was OK for me to keep the item I bought at such a bargain.

So, I could have had a shopping field day but spent half the day stressing out about losses the seller might be taking!  Joke was on me!

Four Tips for Running an Effective Flash Sale   Four Tips for Running an Effective Flash Sale

by: e-Bonked This user has validated their user name.

Thu Feb 28 07:54:53 2013

@Basset--That is so kind of you, to go to so much trouble for your fellow seller. I'm impressed!

I've been running flash sales two or three times a year for about three years now. I call it a ''Flash Fifty'' sale, when I put everything in the store on sale at 50% off for 24 hours. I use it as an incentive to get people to sign up for my eBay newsletter, because it's the only way to find out when a flash sale will be taking place. My e-subscribers get a heads-up a few days before the sale, and I urge them to visit the store and plan their purchases before the date. I make sure I mention the Flash Fifty in the newsletter's subject line--it gives me a much higher percentage of e-mails opened than any of my other newsletters.

The sales always do really well. Of course, I always sit and brood about about how much more money I could have made selling all that stuff at full price...But even if I don't do much more than break even, I don't lose money on the sale. It gives me a nice infusion of cash, it brings in new customers and makes my repeat customers very happy. They often send me thank-you notes, and they try out new items in higher price categories than they would purchase otherwise. Items that sell during the Flash Fifty get a clear boost in Best Match search results as well, so it's a good strategy for slow times when my listings are going stale.

Come to think of it, maybe it's time to do a Flash Fifty now. Sales have been in the terlit since Cassini came on board...

Four Tips for Running an Effective Flash Sale   Four Tips for Running an Effective Flash Sale

This user has validated their user name. by: permacrisis

Thu Feb 28 12:18:27 2013

Write an article about the ULTIMATE flash sale: Do one on tired, 'done for' sellers who stick all their ebay merchandise in a ''pop-up'' brick and mortar store just to blow it out and be rid of the headache. I'm serious... has this worked?

Four Tips for Running an Effective Flash Sale   Four Tips for Running an Effective Flash Sale

This user has validated their user name. by: juliawww

Thu Feb 28 15:43:57 2013 a minute there I thought you were going to say it was one of those sellers who accidentally posted a photo of something metal or shiny with their naked self in the reflection!

That was indeed very kind of u to head off what looked like a mistake. Sorry I missed those St. Johns!

e-Bonked...a "Flash Fifty" sale..I like that idea! I too have done those kinds of discounts if I am just sick of looking at the stuff. ;)

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