Are you thinking of using a discount to jumpstart sales?
This is a common scenario: A new crafter joins Etsy or Artfire and lists her handmade items. The excitement is high as she waits for her first customer. After all, she poured her heart and soul into all those beautifully handcrafted widgets so someone with artistic taste is bound to take a fancy.
And then… Crickets.
Day after day.
Eventually, she brainstorms for promotion ideas- anything to get her widgets into the limelight, but within her meager budget. She hits a light bulb moment eventually: a sale or a giveaway! It makes perfect sense: she loves it when her suppliers have a 50% off so her customers must love it too! She hurriedly creates a coupon, puts it on her announcement and Twitter, and waits for the stampede to follow.
Except, often? The result is also crickets.
You need a following to make a sale work and new shops usually don’t have one.
Extensive use of sales and giveaways hurt your brand
Don’t get me wrong, I love giveaways. I think they’re a great marketing tool when used correctly, I just don’t think they’re useful in every situation; certainly not for new businesses.
Think for a moment what a business that’s regularly giving items for free through a giveaway or selling them for half-off is saying about itself. It says their items are cheap.
If the crafter I talked about earlier managed to build a following through discounts, she’ll soon find that she needs constant discounts to maintain an income. Eventually, the only thing that comes to mind when people think about her store is that it’s a cheap place to get widgets- the kind of place they shop at as a last resort.
The right way to use discounts
“Initial Crystal Necklace” by Megan
If you’re going the discount route to jumpstart sales, the best way is a flash sale that’s piggybacking on another successful group’s following. This means holding it at another venue that can guarantee you customers.
Take the example of Megan from BijouxbyMeg. She joined Etsy in 2010 and heard crickets for a really long time. She had only ~50 sales by the time March 2011 rolled around and her sales exploded.
Here’s how she did it without hurting her brand: She did a limited-time sale on Heartsy, a groupon-like site for Etsy. Heartsy sent over a stampede of customers and the activity pushed her store to the front of Etsy’s search. Nowadays, she only runs coupons for her fans and repeat customers.
The difference between Megan and the widget seller is that Megan didn’t build a brand around frugality; the deep discount provided the burst she needed and the short time ensured her image wasn’t tarnished. The widget seller would’ve slowly accumulated bargain hunters to form the bulk of her following.
Followings to tap into
Other Popular Sellers: Network with other popular sellers and offer a coupon for their fans. This works best if your products are related; for example, plant seeds and recipes.
Flash Sale Sites: There are many flash sale sites like groupon and live auctions like Top Hatter. Though from my experience, groupon-like sites work best with services rather than products (mainly due to the high costs involved).
Charities: Many charities send out monthly newsletters. Offering their followers a discount is a great way to reach a targeted market.
Develop your brand
The first days of a business are vital to brand building, it’s when your image is just starting to take shape. Whatever decision you make will help shape people’s perceptions of it down the road, and things like unique artistry or personalized service are much more sustainable associations to go for.