Home › Forums › Buying and Selling › Scavenging for Inventory › Article on The Importance of Long Tail Inventory
- This topic has 17 replies, 9 voices, and was last updated 3 years ago by
Ryanne.
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09/05/2018 at 7:42 am #48380
Good morning! I thought you all might enjoy this article and found it relevant to some of our recent conversations on the forum:
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09/05/2018 at 11:58 am #48384
OUTSTANDING ARTICLE!
It really does hit the biggest issue we (as retailers) face: Inventory Management. Too many fast sellers, and you are a Churn and Burn model, which can run you into the ground. Too many Long Tail, and you can get into a cash crunch since the payoff is so far down the line. Then, how do you cull out your dead stock items so that you aren’t just sitting on stuff that won’t sell.
We just did a culling of about 50 items from our inventory. We hate not being able to sell it, but when you make a bad buy, you deal with it and move on…
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09/05/2018 at 1:56 pm #48398
For us, we really hope everything will sell quickly! Some of the weirdest stuff sell right away. Our strategy is just to list as much as possible knowing enough will sell to make us money…and everything will eventually be bought if the timeline is long enough.
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09/05/2018 at 5:27 pm #48411
I might have mentioned this before, but years ago there was an ebay seller—smart guy—who operated a B&M gift/antique shop in a tourist town. Most of his income came from the B&M, but he did pretty well on eBay too. What he always preached was : He sells new “gift shop” type merchandise on ebay, margins aren’t that high, but he knows the market, and his stuff sells at a good pace. That gave him his cash flow. He also sold antiques and other long tail stuff, again, he knew the market and had been selling for years, so he bought at good prices and sold with great margins. That was really his profit center. He always felt ebay sellers should sell a similar mix to ensure cash flow and profit.
I always figured he was right, but I’ve never really taken the time to work on the new merchandise end of it. So I’m still basically a J&R seller: List, list and list some more. His point was he didn’t need to have as many listings, and could still generate a good steady income.
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09/05/2018 at 7:46 pm #48414
I think competition is so fierce these days that it’s difficult to find a consistent seller.
I’ve read plenty of blog posts from Amazon sellers groaning about successfully selling a certain knife set until other sellers move in and take over the listing. It sounds like a battle to keep finding these good sellers. Just a different kind of work from listing long tail items.
If someone could tell me an item that would sell all the time, was easy to source, and could guarantee me a $5 profit on each sale….I’d be there in a heartbeat.
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This reply was modified 3 years ago by
Jay.
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This reply was modified 3 years ago by
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09/05/2018 at 10:35 pm #48422
Jay, I’m right there with you. This guy had been in business for years, he had the contacts and a good sense of what buyers were looking for at any given moment in his categories…but he still had to move quickly because stuff went in and out of fashion. Like you say, it’s just another type of challenge, and one I’ve been reluctant to embrace, even though I understand the logic of what he was saying.
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09/06/2018 at 4:11 am #48428
If someone could tell me an item that would sell all the time, was easy to source, and could guarantee me a $5 profit on each sale….I’d be there in a heartbeat.
Okay, now I know there isn’t! I can stop looking.
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09/06/2018 at 7:36 am #48430
I believe the author of this study doesn’t fully understand the long-tail in terms of online selling. The C items will never not have sales, they will just be staggered way out down the line in an imperceptible way that is not currently charted for businesses.
If you sell 1 item 10 years down the line and have 5 similar items that are listed, you will eventually sell out of all items if given a long enough amount of time. 50 years might be longer than the existence of ecommerce itself, but it doesn’t hurt to assume that if you had an internet business that long, you will eventually sell out of an item that is a completely “unsellable” item.
A true long tail business doesn’t technically have “deadstock.” A long tail business is deadstock, along with items that sometimes move fairly quickly. Even “deadstock” itself can move fairly quickly, if it is desirable but rare to introduce to buyers as a product for them to actually purchase.
No inventory management system can truly help predict what does not yet exist for consumers.
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09/06/2018 at 8:18 am #48431
almasty, I suspect this author is thinking of long tail in terms of products, not (as we do) individual items If we’re talking about a seller having hundreds or thousands of each item she sells, then yes, I think there can be a level of predictability. If one SKU is selling 100/month and one is selling 3/month, it’s not too hard to draw some reasonable conclusions. But our stuff? As you say, for most of us, ALL our stuff is long tail, and since we usually have only one of each item, it can sometimes be pretty hard to predict which one will sell first, because as Jay often notes, it will sell when the right buyer comes along, and that’s about it.
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09/06/2018 at 9:16 am #48435
I was responding to the article from my experience dealing with multiple, scare long tail items that start out with “0 desirability” and “0 rank.” 🙂
Given a long enough period of time, all items will sell, even duplicates of items that should not “even exist” according to a lot of the long tail theory out there that states there should be no desirability for that item, hence they should be just chucked for “better selling stock.”
It may be dependent on condition, price, online site where it is being listed, the ability to ship worldwide or not.
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09/06/2018 at 8:33 am #48433
I read the long tail book when it first came out, and no question, many people started selling on ebay in part because of the book’s influence—after all, pretty much anyone can find long tail stuff to sell.
What people missed was that many of his examples were digital: Selling music downloads is a matter of selling 1s and 0s, no physical product involved. He devoted a few pages to ebay, about how great long tail stuff was for ebay, but sellers missed an essential point: long tail is great for ebay because ebay doesn’t own any products(just like selling music downloads): no storage issues, no handling, no shipping…but ebay SELLERS do have all those issues.
Long tail is good for us because of the vast reach of the internet, which exponentially increases the number of potential buyers compared to say, a space in an antique mall. But we still have to deal with storage, shipping etc. WHich is why it’s important to ensure sufficient sales to provide both steady cash flow and a profit center. And I think there are two main ways to do that: either list a large enough volume of stuff to ensure steady cash flow even with long tail items, or list a mix of non long tail and long tail as I described above. So, where I might need 5000 long tail one off listings to make “x”, a mixed inventory seller might need only 500 to make “x.”.
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09/06/2018 at 8:45 am #48434
Jay says: “If someone could tell me an item that would sell all the time, was easy to source, and could guarantee me a $5 profit on each sale….I’d be there in a heartbeat.”
This is another difference between scavenger sellers and commodity sellers: I don’t mind sharing BOGOs with other scavengers in part because sellers here are scattered across the country and not buying in my backyard, and in part because many of the items I’ll probably not run into again.
But the commodity seller who finds a product like Jay described knows that pointing it out to others is an invitation to greatly increase his competition and maybe ruin his profit center. So, not likely to share it.
The one thing I think that will sell pretty constantly at a good profit? ebooks and courses on selling online LOL
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09/06/2018 at 12:22 pm #48441
I know we talk about the distinction between long tail and commodity sellers all the time. It’s endlessly fascinating with there being no “right” answer. It all depends on how someone wants to spend their time.
Here’s another way I think of it.
–What we do is “Sell What We Find”. Just go out into the world and grab anything we can that looks good for cheap. Usually its the overlooked items that is one step before the dump. We dont purposely buy long tail items. Some of it sells quickly. Some of it sells in five years. But its all cheap to purchase with huge margins.
–When we experimented with Amazon its all about “Find stuff to sell”. All your time is spent on finding inventory that will sell quickly. Margins arent as good and often you have to put bigger money up front to even get the inventory. The dream is to find some item that has an endless supply, sells fast, and makes a nice profit. It feels like a huge jackpot.
But I remember watching a video on Youtube about some service that showed the top selling items in any category. Then it would show you where you could buy those items on Alibaba. Then it let you order those items and ship them to Amazon under your store name. This showed me that there doesnt seem to be any barrier to entry for an Amazon seller other than the willingness to absorb financial pain while other sellers drop out when margins become paper thin or even negative. Even if you create a private label item, you may only have six months before someone muscles in on the action.
The only real long lasting success with commodity items is branding. This is why Coke spends billions every year convincing you that the good feeling of family are associated with drinking a sugar beverage. I dont think any of us will ever have enough money to create branding strong enough to fight off competitors.
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09/06/2018 at 12:39 pm #48442
It’s funny how, you won’t know an item is “Long Tail” until it is.
Some of the weirdest stuff will sell in a day or so while a common item can sometimes take years and of course vice verse.-
09/06/2018 at 1:09 pm #48444
This is the answer x one million. You only know its long tail till it takes five years to sell. Until then, it’ll sell at any moment!
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09/06/2018 at 4:01 pm #48449
yes, i love this explanation. i feel it applies to so many aspects of business(es). Will this work? Dunno, just have to try. Did it work? yes/no. Keep going, or evolve or pivet from there.
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09/06/2018 at 3:01 pm #48447
No doubt! I’ve listed things I felt was a sure thing that haven’t sold years later. Others I listed doubting it would ever sell and it sells within a day.
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09/06/2018 at 3:59 pm #48448
Yep, I’ve listed books on Amazon with a 10k rank that have taken up to a year to sell, even priced right (just too much competition going in and out). I’ve listed the most obscure, tiny piece of ephemera on Ebay and sold it within the hour.
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