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Thu Aug 19 2010 10:02:13

Is Smaller Better in Your Online Business?

By: Ina Steiner

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"Grow or Die" is a commonly heard mantra in business. While some people believe that constant growth is the name of the game in business, is bigger is always better? Growth can mean taking on more financial risk and hiring more people - and bigger sales don't always lead to larger profits. You could end up working longer hours for the same amount of money (or less!) that you take out of the business.

Conversely, some sellers want to keep their businesses lean and mean. How difficult is it to keep a business small and manageable? Starting this Sunday, we'll be running a two-part article in AuctionBytes-Update on businesses who want to stay small and would like to hear your stories.
  • Do you want to stay small so you can provide a certain level of customer service that would be difficult as a larger business?
  • If you launched a home-based business so you could take care of children or elderly parents, do you have to fight to not let the business take over your life?
  • What lifestyle concerns do you have that influence your growth plans?
Let us hear what you want to get out of your online business and look for Part One of Greg Holden's article in Sunday's AuctionBytes Update newsletter (subscribe here).




Comments (27) | Permalink

Readers Comments

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: buck efay

Thu Aug 19 11:23:39 2010

For me, small is better. No employees & the ability to quickly react when a company like Ebay destroys my business there. I was only selling on Ebay & my site before the changes. After the changes, I was able to quickly refocus my buying to match the sites where I can still easily & without hassle sell. And I believe it's better for my buyers too, as I can accurately review every single item in my inventory, as only 2 sets of hands here ever touch the goods. Were I trying to be bigger, after Donahoe ruined Ebay, I would have had to rapidly shrink my business & fire my employees. Since I am small & flexible, I was able to roll with the changes & survive. This is not the first big sea change we have weathered, our business at one time was focused on Flea markets. Then as we bought better goods, antique shows. When they collapsed due to Ebay's interference, I was able to migrate onto Ebay & ride until that horse died.

As a buyer, I prefer small sellers too. They generally respond quickly with accurate information. Any question I've asked a mega seller was either ignored, or answered rudely or incorrectly. Many Cds & DVDS feature different editions, and trying to get that question answered by a mega seller can lead to frustration. As they can absorb negative feedback easily, they really have no reason to be sure everything they sell is right. In fact, many Mega sellers are drop shipping goods & never even know for sure what they are selling. By the way, I started selling at flea markets at 15, and have been doing this full time over 20 years now.

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: buck efay

Thu Aug 19 11:30:05 2010

PS here's the answers to your specific questions:

Do you want to stay small so you can provide a certain level of customer service that would be difficult as a larger business?

Yes. We have many customers that know us by name & buy from us regularly. At one point, Ebay even accused me of using shills, because I have so many repeat customers. Isn't that the point of a business? Repeat customers? No business survives without regulars. They have followed us to new venues. I sell in a small niche, and know my buyers.


If you launched a home-based business so you could take care of children or elderly parents, do you have to fight to not let the business take over your life?

I started a home based business because I am an artist, writer & musician. This gives me the freedom to explore my craft. And yes, it has taken over my house there is merch piled everywhere:)


What lifestyle concerns do you have that influence your growth plans?

Answered above. My growth plans include selling more & more original creations that I can self generate, so I can get off the endless treadmill of searching & buying. Not that I ever will, tho, there's too much thrill in the hunt.

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: Nicksnacs4u This user has validated their user name.

Thu Aug 19 12:16:38 2010

I do not know Ina?..this is a good one for sure..pondering here... Polls are saying the average person spends LESS than 2 MINUTES on any given web page, unless of course it is to gossip or visit/chat. A VERY POPULAR night radio host who usually reports on financial matters states that GLOBAL Polls show that 99.9% of ALL BLOGS (GLOBALLY)BILLIONS of them, PRODUCE ABSOLUTELY NO income stream (including all items available to buy for both men & women) and went on to personally comment that we are being BLOGGED TO DEATH, but how ''NOVEL'' blogs were in the beginning..please do not stone me, I am just the messenger here and only included the word BLOG because that is exactly where most shoppers are being directed who ''scan'' online product feeds and or looking online for items ''off/out'' of the Big Retail Boxes and/or their web based advertising of choice. In the ten+ years I have been buying/selling  online, if I land on a page that has more than a couple of hundred items listed..I am OUT of there..period & NEVER return.  I have had EVERY SINGLE male shopper in my tens years of selling/buying online who did not state the exact same thing if they participated in my survey. Women shoppers ''claim'' they would scan all one thousand or more items..however...watching/trending them, I see the EXACT opposite in results...daily time being the MAJOR factor in all of our lives. It does take a minute to view for example 1,100 items for sale on any of the more popular & visited auction/booth/store type sites operated mostly by lets say: mom & pop.
I am fully aware of what this person/company/think tank/number cruncher or that person/company/think tank/number cruncher SEO genius and/or what ever ''glow'' that they have attached to themselves ''numbers'' show..but I believe I will continue to stick to smaller, it has keep product flowing OUT>> the door and has managed to keep me in a TOP RATED power selling position for many many years...and I will include on many sites...but that is just my experience..yours, theirs??
I just pray that ALL online based business sellers produce EXACTLY what they want to produce in sales...
Love your contribution and always look forward to it Ina...
Thanks
Nick

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: RicRoe

Thu Aug 19 14:10:45 2010

Buck has it right...

If you are an eBay seller, the only way to protect your business from the seller killing changes imposed by John Donahoe is to remain lean and mean.

Our business was ready to expand beyond category back in 2008. We were prepared to expand our product line until we saw the nature of Donahoes changes. The constant changes imposed upon eBay sellers make business expansion a non starter.

We decided that we would not expand and canceled merchandise orders because of the instability created by Donhahoe's destructive innovations.

Constant tweaking and re tweaking of search, elimination of store inventory, draconian policy changes and outrageous fee increases made expanding into other categories a financial risk we were not willing to take then, and will not take as long as eBay continues to impose foolish and ill conceived changes.

Trying to build a business on John Donahoe's  eBay is like trying to build a brick  home on quicksand.

Under Donahoe's leadership, today's rule of thumb is likely to be overturned with one of the next round of seller killing changes. When eBay constantly effects system and policy changes it makes it impossible to consider expansion beyond a niche.

eBay's inconsistencies and perpetual state of flux confuses buyers and sellers alike as evidenced by the continued failure of eBay to return to past growth levels.

Why would sellers commit to increasing inventory across other categories when eBay constantly changes the rules of the game?

eBay's own management is the cause of eBay's downfall.

The constant changes over the past 3 years have done nothing to increase eBay sales as Donahoe promised, in fact, they have accomplished  the exact opposite.

Sales remain below the level they had been at prior to Donahoe's dismantling, which as far as I am concerned is reason enough not to expand.

Why would anyone risk an increased inventory investment when what was once their primary sales channel has all but dried up thanks to incompetent leadership and a Board of Directors that expresses zero concern over the downward spiral their marketplace has been in since Donahoe became CEO?

If I wanted to gamble my financial security, I would play slot machines, not take risks on a marketplace that is incapable of offering a solid, stable and consistent platform from which to transact business.

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: Ric Reads Minds

Thu Aug 19 16:31:30 2010

Hey, RicRoe! Through some sort of magic, you have managed to peek inside my head and put into words the things that I've been through and that I'm feeling.

There's absolutely NO REASON for anyone to expand on eBay. It's too risky... and the risk isn't worth the reward.

This month has been my WORST MONTH EVER on eBay. This month (to my surprise) my Bonanzle sales have exceeded my eBay sales... and that's without TRYING!! I just created a Bonanzle account ''just to have one'' and ''just to be there'' and as a show of support. It was more of an afterthought and a passive-aggressive way to smite eBay.

EXPAND ON EBAY?? NEVER!!! I am fast approaching the point where I am seriously considering REDUCING the number of items I list on eBay and actually being a DEDICATED AND INVOLVED seller on Bonanzle.

Hell, if my little Bonanzle store can do better than my eBay store when I'm NOT trying, then imagine the possibilities if I *do* become an active seller there!

Pass the butter and jam... eBay is toast.

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: Nicksnacs4u This user has validated their user name.

Thu Aug 19 17:35:14 2010

Wow Ina!
I swear I read your article several times and never ONE TIME did I see mention of any specific company's name? used or a single word requesting WHERE one would or should grow their business or to let their business stay small??... Missed something? Suppose so..I shared my opinion on keeping my ONLINE SELLING BUSINESS Small or letting it Grow, just like the request in your article stated..?
Love to hear from you and respect the time & effort you put into your job Ina, but somehow this type subject gets into the personal crawl of so many sellers who have perhaps done well at one place and not so well at another..(I do well where ever I choose to land)...and the blog quickly descends into social anarchy & fighting..am so sorry, but KNOW that is why so many of us do not participate in these surveys or online comments & choose do conduct the discussions OFF LINE via private e-mail..Thanks Again Ina!
Nick

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

This user has validated their user name. by: Nan
Web Site

Thu Aug 19 18:04:21 2010

I definitely want to keep my business 'lean and mean'. In my type of business (where I personally produce what I sell) customer service is top priority right alongside with product. I may receive custom order requests, or be asked to hold a gift order and ship it at a certain time, or to a different address, add a card, gift wrapping. Whatever it is, I want to be able to respond personally.

To me, 'growing my business' means increasing my profits. Not necessarily having a huge inventory or many employees.

To answer the questions from the OP:

* Do you want to stay small so you can provide a certain level of customer service that would be difficult as a larger business?

>>> Absolutely and exactly.

* If you launched a home-based business so you could take care of children or elderly parents, do you have to fight to not let the business take over your life?

>>> To a point. When I started, my children were in grade school. Now that one is in college and the other in high school, I have more time to spend on the business. And yes, it does tend to take over. But I love it.

* What lifestyle concerns do you have that influence your growth plans?

>>> I'm not sure I understand the question. But I should be able to continue my business well after retirement age. As long as my eyeballs hold out ;)

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: Rich

Thu Aug 19 18:14:36 2010

Small is better when Ebay raises per item store fees from 3 cents to 5 cents.  Ebay has chosen to stunt growth, so stunted growth appears to be what's best for 2010 on Ebay.  

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: Digby
Web Site

Thu Aug 19 19:17:53 2010

Great subject Ina.
As many of us are leaving ebay and trying to set up on other views or our own websites we do need more help and info on this.

@Nicknacs4u.
You are dead right re blogs, trying to advertise on them is very hard, and getting hits from them is very hard.
It is the same old story, the media hypes things up and then every man and his dog gets a blog. We cant all blog, there has to be some readers.
Its the same with
Article Marketing. (everyone is writing junk articles)
Its the same with Affiliate Marketing (everyone is trying to be affiliate)

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: buck efay

Thu Aug 19 22:16:19 2010

Nicksnac, many of Ina's readers WERE Ebay's core of sellers, so of course, we must mention it as the past 3 years were a game changer. Many of us invested into time & goods for that site which are hard to sell elsewhere. Sorry if it bothers you, but this is Auction bytes, obviously the 500 pound gorilla & most of the constant readers here were auction sellers on the only auction site, until it was killed off. Ebay was our growth venue, not any longer. Now My own site, Bonanzle, Ecrater & Amazon get all my love & Ebay gets my 100 freebies a month only.

Ricroe, if I could, I'd thumbs up "Like" your post. good one.

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: gonefromebay

Thu Aug 19 23:38:34 2010

Buck has it right as far as I'm concerned.  With only minor tweaks my business model closely resembles his, and I want to keep it that way.

I also make it a point to buy from small sellers because they are like me.  Customer service means a lot to small sellers, and the bigger they get the less they seem to care.

I don't want to hire people and have minimized my business to simple bookkeeping and paying taxes.  I don't need a staff to keep up with it all and love doing it all myself.

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: colorful one
Web Site

Fri Aug 20 04:14:04 2010

bigger means things getting out of hand and forgetting about treating customers decently.

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: AC_in_Mich This user has validated their user name.

Fri Aug 20 08:01:54 2010

I like the posts - but here's another unmentioned thing - As soon as you reach a certain point of growth and size - you stand out.  We refused to become Powersellers just for that reason - we didn't need the increased scrutiny from eBay and the gov't (let's face it, if the gov't was ever able to start going after eBay sellers for whatever reason, what group would they start with?)

And now, with the 1099 crapola starting in 2012, if you are running your online business as a business and not as an individual, all of the paperwork requirements could easily be the last straw that breaks your business camel's back

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

This user has validated their user name. by: Al G

Fri Aug 20 08:04:59 2010

   * Do you want to stay small so you can provide a certain level of customer service that would be difficult as a larger business?

Yes - the customer service is accountable only to me, the kudos/blame is mine alone. I'm comfortable with that.  
  If I'd have employees, I'd have to treat them exactly the same as I'd treat me - which means no extra profit for me - or else I'd have to treat them like employees - skimming 50% or more of the profit they generate into my pockets. I'd rather sleep at night than do that to another person.

   * If you launched a home-based business so you could take care of children or elderly parents, do you have to fight to not let the business take over your life?

Not applicable in my situation.

   * What lifestyle concerns do you have that influence your growth plans?

Do you run your business, or does the business run you? Very schizoid - eh?

I've found that if you want to take a week [or more] off, you are effectively out of business for 3 weeks - 1 week or more to ramp down sales, 1 week vacation, 1 week to ramp up again.

Well maybe 2 weeks, you can ramp down & prepare to ramp up the week before, but your workload increases.

As for the eBay debacle for small sellers - the Marines are coming to the rescue - adapt, improvise and overcome!

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: Hardrock Rules

Fri Aug 20 10:13:20 2010

For mew online selling is 7 days a week / 365 Days a year !

There is no vacation, I get a few hours each day at times to walk away from this, but must comeback

It was less stressful before John Donahoe, but he has put the heat on sellers

My customers want to hear thank you and get tracking # within about 2 hours max, or they tend to ruin me on communication

All in all I prefer small so I can give personal service, but they expect it fast, and for me 7 days a week / 365 days a year

Before John Donahoe I would accumulate orders and ship them every 3 days, and NEVER had a problem, now buyers want to see tracking like I said within a few hours max

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: CPC_Andrew
Web Site

Fri Aug 20 13:04:20 2010

I wonder if it's possible to keep the small business mindset in regards to customer service but still allow yourself the opportunity to grow? Like Zappos? Customer service is an integral part of the company I work for and I'd have it no other way. We love providing quality service, not some ticket scheme where you have to wait in a virtual line to get your question answered by an automated message.

A great way to increase the revenue of your company is to add your products to free comparison shopping engines. The big three free engines are Google Product Search, Bing Shopping and TheFind.com.

Sign up:

http://www.google.com/intl/en_us/products/submit.html
ht
tps://advertising.microsoft.com/bing-shopping-merchant
https://merchant.thefind.com/mc/claim.fhtml

For
the small business owners here, do you list your products on free comparison shopping websites? If you do what have your experiences been?

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: buck efay

Sat Aug 21 16:48:38 2010

I was reading an interesting story on Zappo's in a mag. They grew their business with unlimited free returns. Their biggest customers have the highest return rates, which they have a great deal with UPS & reduced shipping. 365 day unlimited return policy. Not a good fit for my type of unique & rare goods business. Of course the feel good article neglects to mention what they do with all the stanky used & worn shoes that they don't put back into inventory. Yes, they resell the used returnsd as new if they think they can get away with it. They have a grader that inspects returns & restocks them as new. I guess that's why they wanted to open a shop on Ebay:)

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: DonC
Web Site

Sat Aug 21 23:41:15 2010

Smaller is definitely better for us.

Ours is a family owned and operated business. We have a good personal relationship with our vendors and often know our repeat customers by first name. It's interesting to hear how surprised a new customer sounds when a live person answers the phone, can actually answer their question (and speaks English!).

100 % of my business efforts are committed to productive work. No mindless meetings or reports. Life is good!

Like many people who read Auction Bytes we got our start at eBay. It was a good place to try out new products. We have tried literally hundreds of products there and identified the top fifty or so that work for us. We still list a few items on eBay: http://bargainmotorcyclegear.com and use eBay for trial runs of new products. Our eBay sales have not been a major source of growth over the last four years. However our online store: http://DonsCycleWare.com has exhibited a steady growth over the same time period.

We still have some room for growth. I estimate that in about two years we will be at the optimum sales level. When the business gets too big to be a family business I'll either sell it or cut back on advertising to keep sales at a comfortable level.

Lifestyle concerns? I'm 60 years old and enjoy what I'm doing. I would like to pass the business on to my family. I have no intention of driving myself to an early grave .

Thanks for the interesting article,

DonC



Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

by: mindelec This user has validated their user name.

Sun Aug 22 00:21:40 2010

"I've found that if you want to take a week [or more] off, you are effectively out of business for 3 weeks - 1 week or more to ramp down sales, 1 week vacation, 1 week to ramp up again. "

i've found that i can take a week off with a downtime of less than a week depending on which day i leave and come back.  i only need to shut things down 2 days before i leave and if i'm coming back on a tuesday i can effectively put my inventory back online late friday night.

Is Smaller Better in Your Online Business?   Is Smaller Better in Your Online Business?

This user has validated their user name. by: Al G

Sun Aug 22 09:27:09 2010

@mindelec

Sorry for being somewhat ambiguous, I don't have a store & only list via 7-day auctions, hence the cycle times.

Al G

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