Promotions, Sales and Multibuys for Craft Sellers
Welcome to Episode 25 of the Craft Seller Success podcast. In this episodes I am discussing the various types of sales, multibuys and other promotions that a craft seller might want to use in his or her shop. As well as lots of hints on how to make the most of a promotion, I will also look at some of the opssible pitfalls.
Listen to the Promotions, Sales and Multibuys for Craft Sellers podcast here, download it for later or read the transcript below.
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This is the Craft Seller Success podcast from Tin Teddy. Episode number twenty-five – Promotions, Sales and Multibuys for Craft Sellers
Welcome to the Craft Seller Success Podcast – helping craft sellers sell their crafts
Hi, I’m Deborah Richardson from Tin Teddy.
Introduction
Pop into your local supermarket, open a magazine, turn on the TV or spend some time browsing the internet and you are bound to bump into someone having a sale or promotion before long.
Nowadays promotions are an important part of shopping and something that the craft seller may well want to consider for their own shop.
In this episode of the Craft Seller Success Podcast I am going to be talking about the various types of promotions and offers available and why they may help your craft shop. I will also discuss some of the problems with promotions and ways to avoid losing money or having things go horribly wrong.
If you sell via a marketplace site such as Etsy, Folksy or Amazon Handmade you will probably be very limited in what sorts of promotions you can actually use. Online shops built with services such as Shopify or Wix have many more options available, and stand-alone sites using WordPress and similar products tend to have the widest range of promotions available to the craft seller.
Whilst I will mainly be discussing promotions for craft sellers who sell online, much of the content will be equally valid for selling in person at craft shows or in bricks and mortar stores.
Important
Many countries have laws governing how businesses can utilize sales and promotions. For example, here in the UK, one must have sold a product at full price for a period of time before reducing it and calling it a sale price. Before launching any sort of promotion, please do check on your local laws. Plus, if you are selling via a marketplace site, be sure you are following any rules they have in place governing promotions.
Let’s have a look at some of the types of promotion that a craft seller might consider for their store.
Types of Promotion
Discounts
A discount or sale is when an item is priced lower than usual. This is the most basic type of promotion and one that we see every day in both online and bricks and mortar stores.
There are two main types of discount you can offer your customers.
Basic Discounts
Here the price is reduced by a set figure. For example, the item was £10 but is now £8, so there is a £2 discount. Usually, the prices that are displayed next to the item in an online store, or on the tickets of a physical store are actually changed, perhaps with the old price having a line through it.
So the customer sees that the item is now at the new, lower price, and this will encourage them to go ahead and buy.
When the sale ends, the seller will put the prices back up again.
Percentage Discounts
This type of discount may apply when the customer checks out of an online shop, or be displayed on signs around a physical store. The prices on the item’s tickets are usually unchanged.
So the customer may see the price at £10, but also see a banner saying that all items are 20% off today. When they go to checkout the price they pay will be £8.
Percentage discounts are commonly used in online shops because they are easier to apply to groups of products without needing to change lots of individual prices.
“10% off all earrings until Christmas Day!”
Flash Sales
These have become very popular recently and I see many sellers, both big and small, using them.
A flash sale is only available for a very short time. This can be a day or two, or as short as just an hour.
Whilst many sellers see good sales from Flash Sales, they can also be frustrating for customers.
If you sell intentionally, be careful about having Flash Sales during your daytime which your overseas customers miss out on as they are asleep at that time.
I have received emails telling me about Flash Sales that happened whilst I was asleep or offline, and have missed, and felt very upset, even a bit angry about this.
I’d recommend going no shorter than one day in length if you are going to tell customers about the sale via emails etc.
Multibuys
Multibuys are, as the name suggests, where the customer gets some sort of “reward” for buying more than one product.
This might be “Buy one, get one for free“, which is called a BOGOFF in the UK, by the way.
Or it might be “Buy one, get one for half price“, or “Buy three, get one free” or “Buy 6 get 10% off” and all sorts of other permutations.
These are often called BOGOs, an acronym for Buy One Get One, even though the actual number one has to buy to get the offer may be more than one.
Sometimes the multibuy is for a specific free or reduced item.
“Buy any item from the Snowflake range to get a limited edition Snowflake Pendant for free!”
“Buy three items and get an “I love Llamas” enamel pin for free!”
Or the free or reduced item may be one of a group.
“Buy a necklace and bracelet and get the matching earrings for free!”
“Buy any three scarves and get a pair of gloves for half price”.
When offering free items like this via an online store, be sure to take into account the increase in shipping costs that this may create.
I have, a few times, heard of sellers who have run such a promotion, had a pile of sales then realised they will actually lose money because the postage that the customer paid will not cover the actual shipping costs of the product, plus the free gift.
Also, be sure to specify if the offer is “Whilst stocks last” or “Limited to the first 100 customers!”
Complex Promotions
There are lots of more complex promotions being used. Here are a few you may have encountered:
- Buy two items from this first group to get anything from the second group for free
- Buy something from group 1 and something from group 2 to get 50% of things in group 3
- 20% off everything with an additional 10% if you bought something from us in the last week
- 10% off for people who have spent over £100 with us in the last year
- 10% off items in group 1, 20 % off if you also buy something from group 2
- 15% off all earrings if you have already bought a pendant set from us
And so on…
I would caution against using these complex promotions too often. I have seen online shops that regularly use them and time and again shoppers are complaining in their forums that they don’t really understand the offer. Plus the more complex the offer, the more chance that something may go wrong and it doesn’t work properly.
Whilst a complex type of offer can be fun and exciting, it can also be very frustrating for both customers and sellers.
Loyalty and Personalized
You might want to consider offering repeat customers a discount as a reward for their loyalty. Or perhaps to enable someone who bought from your Spring collection to get a bonus if they also buy from the Summer collection.
Nowadays, more sophisticated software is allowing sellers to offer a more personalized shopping experience.
This may be a pretty simple scenario, for example, sellers on Etsy can tick a box and have a coupon code included with the receipt sent to all shoppers, for a discount on future purchases. I see a lot of sellers on eBay doing something similar, with a coupon code included when the purchased item arrives to get a small discount the next time I shop with them.
With a stand-alone shop, one can have more complex arrangements. For example, you may have tiers of loyalty. So when a customer has bought, say 10 times from you they move up a tier and start to get a tiny discount on all future purchases. After 20 sales they go up another tier and the discount goes up and so on. This sort of system is only really worth doing if you have the type of products where customers do purchase from you again and again – for many craft niches this is not really the case.
Offers can be personalized still further in many types of shop. For example, one could offer a particular promotion only to visitors from a certain country. This may be a necessity if an offer is not allowed everywhere, for example, a promotion that could be classed as gambling in some countries, such as “Buy X and get a random amount of money back”.
I have seen shops that offer customers a discount or voucher on their birthdays, or the anniversary of their registering on the site.
Some USA sellers offer a discount to military visitors.
Coupons
For online shops, coupons usually work by the shopper having a special code which they enter at checkout on the shop site. This then gives them some sort of discount or offer.
There are advantages and disadvantages to using coupons in your craft shop.
Advantages of Coupons
They are easy to use and most marketplace sites can use them. They are also built into WooCommerce and many other shop building systems.
You can use them to target specific potential customers. For example, you could add a coupon code to your business card then give it out at a trade show. This will allow you to track where new customers who use the code must have come from.
Coupons can be used on both internet and real world marketing. You can share them with your social media followers, on business cards and flyers, in newspaper adverts and so on. You can also verbally transmit them to people, i.e. you can tell people what the coupon code is. This gives them a lot of flexibility and makes them ideal for promoting away from your actual craft shop.
I often see new Etsy sellers trying to use coupons within their Etsy shops in a way that a basic “just reduce the price” sale would work much better. If you want to offer 10% off your prices this month, reduce your prices by 10%. If you try to do it by asking customers to put in a special coupon code you will inevitably get some who forget and get upset. Why make their life harder?
A coupon is designed to be communicated to someone so as to encourage them to come to your shop and buy stuff. It is not so useful for people who are already in the shop and about to buy.
Disadvantages of Coupons
Customers need to put the code in at checkout, and it is inevitable that some will forget to do so. You will also get customers who only discover the code after checking out. Then you will need to deal with their contacting you wanting you to fix this.
If you are using coupons on Etsy, be aware that there is no way to limit their use to specific customers. This means that if someone can guess a coupon code, they can use it.
It is generally good practice, whatever type of online craft shop you have, do not use coupon codes that could be easily guessed.
Avoid things like “Free shipping“, “Ten Percent off“, “special offer” and so on.
There are websites that harvest coupon codes and share them with their members. This can mean that someone might get hold of a coupon that you intended to only be used by a limited number of shoppers.
For example, you might set up a coupon code to give to your friends and family so they can have a discount when buying from you. But if you use a generic coupon code, someone else may use it.
The other big disadvantage of coupons that I want to mention is one that I have seen discussed many times on marketing forums and sites.
If a customer is about to checkout of your shop and sees a box saying Coupon Code, they may assume there must actually be a coupon code available somewhere, even if there isn’t. They could then go off hunting for the coupon, searching on Google etc. for it. And once someone has left your shop there is always a chance they will get distracted and not return.
What’s more, if they don’t find a code, they may feel frustrated or annoyed and so not finish their purchase.
Many people feel that coupon use can train customers to feel they should always have one.
Therefore, if you do not have any coupon codes available, you may want to remove the coupon code box from your checkout until such time as you actually need it, just in case.
Free Shipping
This is one of the most commonly seen types of promotions nowadays.
There are two types of free shipping, though arguably only one is actually free.
Free shipping when… a type of multibuy. So perhaps you offer free shipping on orders over a certain amount, or when a certain number of items are bought. This can encourage customers to buy more and is very commonly used by online stores where customers are likely to want to buy more than one item at a time.
Free shipping… with no additional conditions. Very often this type of free shipping is actually “included shipping”. The seller has increased the price of the product so as to not have a separate shipping charge.
There are many arguments for and against this practice. Craft marketplace site, Etsy, for example, have been pushing very hard for sellers to use free “included” shipping. They believe that it very much encourages sales.
There have been studies that show that shoppers can see a combined price of, say, £50 as being less than one of £35 for the item and £15 for the shipping. It seems that if the shipping looks high to them it puts them off. The fact that the shipping fee being charged accurately reflects the cost of shipping the item, or even if it is less, does not affect this perception.
This is why many big shopping sites such as Amazon and eBay encourage free shipping, or at least they encourage sellers to combine their prices and give the appearance that the shipping is somehow free.
But there are plenty of people who dislike it and feel that it is not transparent and even unethical, as the shipping is not really free just not itemized separately to the item price.
We are all aware that shipping really does cost something. The post office doesn’t deliver our items out of love.
If you are going to include your shipping fees in your product prices, be aware of three potential issues that can arise.
One – if your customer wants to return the item you will have to refund in full. This would always be the case for EU sellers anyway, but sellers in the USA and many other countries would usually have the option of just refunding the item price if the buyer wants to return something that is not faulty, i.e. they have just changed their mind. But if you have declared that the shipping was free then you can not logically try to withhold it for a return. Something you may want to consider.
Two – if you sell internationally you may have a bit of a problem with offering free shipping. Shipping abroad is considerably more expensive than shipping to your own country. You may be able to set up your shop to offer different prices for different locations, to take this into account, but if you are selling on a site like Etsy this may not be possible. You would either have to overcharge your domestic buyers or undercharge your international ones – neither of which is a good option.
Many sellers only offer free shipping for sales to their own country to avoid this issue. However, if you do this, be aware that it may alienate potential overseas buyers who will feel they are missing out, or even that they are subsidising the free domestic shipping.
You may be able to offer international sellers reduced shipping of a comparable rate so everyone appears to get the same saving.
Three – if you regularly sell multiple items you may need to consider free “included” shipping very carefully.
Often sellers of multiple products offer combined shipping rates which customers can benefit from, and which encourage multiple purchases. But if there are no shipping rates, only set product prices, the customer may end up paying a lot more for the items. Or rather, simply not wanting to buy at all.
For example, let’s imagine an artist that sells artwork prints for £10 each. Normally she charges £2 domestic shipping for one print. One can ship two or three prints for the same price as one, so the seller sets up her shop with that one fixed shipping rate.
So if a customer buys 5 prints at £10 each he will pay £50 plus £2 postage – £52.
If the seller was to move the £2 postage onto the product price, the product price is now £12 per print.
Someone buying just one print will end up paying exactly the same as before. But our customer who wants 5 prints will now have a bill of 5 x £12, which is £60. A lot more than before.
So including the postage in the product price can help sell individual items, but if you have the sort of product where you would normally combine postage on multiple items, you may not be able to use it.
For lots more advice on posting and shipping your products, check out episode 30 – Shipping, Posting and Delivery for Craft Sellers.
Preparing for a Promotion
Before you launch a big promotion in your craft shop there are a few things you may want to consider.
Do you have enough stock or raw materials?
Be sure you have adequate materials or ready-made stock to cover an increase in orders. Be sure you remain aware of your inventory so you can stop the promotion if you need to.
Do you have enough shipping materials?
This is one that some sellers forget. You might want to organize a temporary shipping station area to help you handle an increase in orders.
Be sure the promotion is worded correctly.
Again and again one sees news stories of big businesses who have lost money, or reputation when a marketing scheme has gone wrong because they have worded the advertisements badly. Check and double and check that what you are telling your visitors is what you really mean. If you are doing anything other than a very simple offer, ask someone else to read it through and tell you what they think it means.
Be extra careful with percentages…
A lot of people find percentages a little tricky, especially if they are stacked in any way.
If an item is in the 50% off sale, and your customer gets a 10% loyalty discount does this mean they will get the item for 60% off.. or 55% off… or 45% off? Depending on the way in which the discounts are applied all three are possible. Be sure YOU understand what is going to happen, and spell it out to your visitors as clearly as possible.
“Your 10% loyalty discount will always come off the currently displayed price, not the original price.”
And multibuys…
If you see an offer that says “Buy Four Get One Free” you could be forgiven for not being sure whether this means buy four and get another one, the fifth one, for free, or simply buy four and the fourth one of them is free. When wording any multibuys spell out exactly what is going on.
“Buy Four and Get the Fifth for Free” or “Buy Five and the cheapest one of them is free!”
Off and Of mean very different things
I have seen this little error so many times I thought I ought to mention it.
- 20% OFF a £10 item means the item is now £8
- 20% OF a £10 item means the item should now be just £2
Usually, a seller wants to use OFF. Be careful to have both of those Fs in place.
Know When to Stop
Some promotions have a time limit all along. “Buy any item today for 10% off”. The offer here is just for today and will not be on tomorrow. Many marketers like time-limited promotions as they encourage the visitor to buy now rather than risk missing the great offer. They also help ensure that you have some control over the offer, that you don’t get too many people taking it up.
If there is any chance you could run out of stock before a promotion is due to end be sure to have included the caveat “Whilst stocks last” or something similar, such as “Limited to the first 50 customers“.
Be prepared to end a promotion early if you have to, but make sure you remove all advertising and mention of it when you do.
Failure to fulfil a promised promotion looks very unprofessional and is something that customers will get very upset indeed about.
Will You Need Some Help?
If your promotion is a big success, will you need assistance with making items, posting them or handling emails etc.? Before launching a very large promotion you may want to warn family members or other people you live with so that they can either help you or at least not be too shocked when you suddenly shut yourself away and ignore them!
Marketing Your Promotions
After thinking for a while about what I wanted to say on this subject, I decided that it really was such a big topic that it should be tackled more in a future podcast.
One of the biggest reasons that a promotion fails is because no one knew about it.
Do you have much of a tribe yet? Your tribe is the people who follow you on social media, subscribe to your newsletter, follow your blog, are regular customers and so on. In other words, the people you can easily reach. If you have a very tiny tribe then getting the word out about your sale may be quite hard.
How are you going to let people know that something cool is going down in your craft shop and they really should come to see, and buy? If you can’t answer that question then you may want to defer your sale until you can.
If your craft shop has good traffic then reducing prices or offering some sort of promotion may well bring in results. But if you are struggling to get visitors then I recommend working on that first and then considering promotions. Having a promotion will not, in itself, bring in visitors… unless you have a plan on how you are going to tell them.
As I said a few moments ago, I will talk much more about marketing your promotions in future podcasts, so stay tuned.
Benefits of Promotions
Promotions are big business. If you shop online a lot you will regularly bump into the various types discussed here.
There is no doubt that they can help a craft seller bring in sales. So let’s have a look at the benefits of promotions, in other words why you might want to give one a try.
Get more sales in the short term
This is the most simple benefit. Reduce your prices for a while and get more sales because of it. Be very careful not to do it too often though or you will end up with customers who wait for the next sale and never want to pay the full price. And if you are only able to sell at the reduced price then perhaps this should be your normal price all long….
Draw attention to your shop or a new product/product line
Lot’s of new craft sellers will have an “opening sale” or promotion to try to attract new customers. Whilst these opening sales rarely are as successful as the seller probably hoped, it can be worth doing if you have a marketing system set up already, for example, plenty of followers on social media. Just reducing your prices of offering something extra for free will not get you sales unless you are able to tell someone about this great offer.
Established sellers often have sales or other promotions to encourage their visitors to try a new product or product line.
Think of a big company like a soft drinks firm that introduces a new flavour with various promotions. “Try new pink candyfloss flavour at 50%!”
Be careful though. Sometimes having an opening sale with very deep discounts can make a new seller look unconfident. The message might seem to be “I am not sure I will be able to sell my items so have reduced them right down, please buy.”
I have also seen cases where a new seller has started with a sale and then been afraid to ever raise the prices in case they can no longer sell. They then end up running at a very reduce profit, or even a loss.
And, of course, many “Grand Opening Sales” are rather a waste of time and effort simply because no one yet knows the new shop exists, the seller hasn’t yet got many social media followers, newsletter subscribers or any other way to contact their target market, and their SEO is weak.. meaning no one ever stumbles on the shop during the sale to take advantage of it anyway.
Personally, I would recommend concentrating on building up your presence before considering sales. It is much easier to get people to snap up your bargains when they know you exist.
Build up sales stats which might help with SEO
Running some sort of promotion to encourage sales can be worth doing for a few different reasons.
Many people feel that having a new shop with zero sales, especially where that number is visible such as on Etsy, might put people off buying. They hope to “get the ball rolling” with a few sales under their belt so future visitors feel they can trust the seller and are happier about buying too.
Having sales may help SEO, either with Google and search engines or with the local search engine on a marketplace site such as Etsy. Whilst the exact details of how search engines work is a necessary secret, I have seen it theorized that sales could well be part of the algorithm. A shop that has numerous, recent sales might appear more relevant to a Google search than one that hasn’t sold anything for ages.
These are both very valid reasons to consider a sale and maybe something you will want to try.
Be careful if you are going to be running at a loss whilst doing this, be sure you are very aware of your profit margins and exactly how much such as sale will cost you- and know when you will be stopping it!
Attract new repeat customers
Having a sale or promotion may attract new customers who then stick with you to make future purchases. These are very valuable customers, so any initial drop in profits, or even small loss, because of the promotion, may be worth it to get the long term sales from the customer.
If you sell the sort of products where customers may well come back again and again over time, having promotions to attract new ones could be well worth considering.
Sell the razor blade, not the razor
This is a well-known marketing maxim. For some products, a business will make more money in the long term from sales of consumables, accessories, add ons or services for a particular product than they ever will from sales of the product itself.
There are lots of products like this, a couple of examples:
Razors (obviously) A customer buys the razor body, on sale, but then continues to buy from the company for many years as they continually need blades for the razor they bought.
Printers often seem very low priced, but this is because the makers know that once you have their brand of printer, you will have to keep buying ink from them – and the ink is what makes the profit for them.
Whilst this particular business model may not fit many craft seller’s products, you may have something where the initial sale could encourage future purchases. For example, if you have something that is collectable and the buyer of one may well want to get more later on.
Clearing Stock
One of the commonest reasons to have a sale is to clear out stock that you no longer want to have around for some reason.
Unsold stock takes up room and there can come a time when you need that room more than the stock!
Here are a few times when you may want to reduce an item to clear it or use it in some sort of promotion.
- It may be that a product simply hasn’t sold, and you are convinced that it never will at the current price.
- The product may have passed some sort of time threshold. For example, you might want to clear out Christmas stock after Christmas. Or reduce perishable products to clear them before they expire.
- Old lines. You may have decided to take your craft shop in a different direction and so would like to clear out the old products you have left so you can concentrate on your new lines.
- Damaged or flawed stock. Many craft sellers have a section in their shop for flawed or slightly damaged products. If a product is still usable and attractive but has a slight flaw from your construction, or has acquired a little damage, you may want to sell it off at a reduced price simply to recuperate some of your costs for it. Plus many shoppers rather like this sort of bargain.Be sure to describe the item very clearly, especially why it is reduced. Remember that products should always still be fit for the purpose. So if you are selling a teapot it should be able to be used to make tea – or very clearly described as ornamental only.
- Samples. I know that many craft sellers will include free samples with purchases and may turn this into a type of promotion. This can work very well for bath and beauty sellers.
“Buy any three soaps and get a free mini bar of our new Strawberry Special soap“.
“Mystery sample lotion from our new Yumilicious line, free with every purchase over £10“You could also use samples as a sort of multibuy type promotion for example:
“Sample Bars are 99p each. Each purchase includes a coupon for a 50p discount off buying the full-size bar.“Sample multibuys may be useful for other product types too.
“Free swatches – Buy our fabric sample swatch set for £3 and get a £3 coupon for future purchases!“
Common Problems with Promotions
Running a sale or promotion can bring in lots of money… or… it can also cause a lot of stress. I often see sellers in forums complaining that their carefully planned promotions didn’t bring in any extra sales. So why might this be?
Here are some common problems that can arise when using promotions.
Losing money as not worked out the profit margins right
Before reducing the price of an item, or offering some sort of multibuy or another offer, be sure you know what your profit margins are, and what the offer will change them to.
Usually, we still want to be making a profit when we sell, even during a sale or promotion.
If you are unsure about profit margins, check out episode 11, Craft Prices – Setting a Product Price for Craft Sellers for lots more info.
Guest Checkouts cannot take advantage of some sorts of sales
If your shop allows people to buy without registering and logging in, what are known as guest checkouts, you may also find that they can not utilise all types of promotions- something you will need to take account of when describing your promotions in your shop.
No one knows you have a sale at all
Probably one of the biggest problems that sellers have with promotions and sales. Before launching a promotion always consider how you are going to let the world know about the great offer. If you get very little traffic then a sale may not help your shop much, you would be better spending time on traffic-generation such as SEO and marketing.
There will be lots more information on marketing your craft shop and promotions in future podcasts.
Unprepared for the increase in sales
It is very possible to be a victim of one’s own success. Be sure you have adequate stock or supplies to cover the increase in sales. Ensure you have included useful caveats in your promotion marketing such as “Whilst stocks last” and “Offer limited to first 30 customers“.
If you find you are getting too many orders to comfortably handle, be prepared to close your shop or take down the promotional lines for a while until you can catch up. There are many shops that have suffered badly from a very successful promotion that has left them with a back-log, late shipments, angry customers and bad feedback and reviews on social media.
Plan your promotions, double check them and, with a little luck, enjoy the rush of sales and benefits they bring to your craft selling business.
I would love to hear about your experiences of running sales and promotions in your craft shop.
Please leave your comments below.
Next Tuesday will be the first anniversary of the Craft Seller Success Podcast. A big thank you to everyone who has downloaded episodes, subscribed on Podbean, iTunes, Google Podcasts or via the Tin Teddy Website.
If there is a subject you would like me to cover in the podcast, please do let me know. I am also looking into doing some interviews with craft sellers in the near future – more on this soon.
Finally, my new stand-alone shop, The Tin Teddy Shop is now open for business at www.TinTeddy.com/shop.
The next episode of the Craft Seller Success podcast, episode 26 is called Selling Your Designs Using Print On Demand Services. It will be out on the 2nd of April 2019.
Thanks for listening. Please subscribe to the Craft Seller Success podcast.
Until next time, bye
The Craft Seller Success Podcast from Tin Teddy.
Featuring Deborah Richardson
Original music by Matthew French
Helping craft sellers to sell their crafts.
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