I am focused on this at the moment, because I am about to do what we ALL still do…ignore my own advice! When it comes to mountain biking – I LOVE the sport – but I am usually good for 5-10 miles…TOPS…before my old body starts cursing me. So what am I preparing to do this beautiful sunny morning up in the Adirondacks??

I am heading out on a grueling 28.5 mile route

I will have no cell service to call in the rescue team – but I will have experienced riding mates to “coach”me through the pain!

The Lesson: If you KNOW your going to do something stupid – make sure someone is there to document it for future RIDICULE!!

Does this sound like something you may have heard – or something you may have SAID lately??

Every business goes through cycles of peaks and valleys.  Do not fool yourself into thinking a downturn will never happen in your business.  Sometimes even the smallest market shifts can create tremendous upheaval to your business.  Being prepared to address these “shifts” will not only help you navigate the rough water, but quite possibly could position you for competitive market dominance.  That being said – let’s dive into PART 1 in a series of posts on Financial Health – “Getting to Know Your INVENTORY TURNOVER RATIO”.

Your inventory turnover ratio is one of the most important financial ratios to monitor and manage. Of all the asset management ratios, it gives you, the business owner, some of the most important financial information.  The inventory turnover ratio measures the efficiency of the business in managing and selling (turning) its inventory. This ratio  measures the liquidity of your inventory. It also helps determine how you can increase your sales through inventory control…more on that later. Make note of this – the calculation for the inventory turnover ratio:

  Net Sales $ / Inventory $ = # Times (ITR)

In order to calculate this ratio, you can use the net sales dollars from your company’s income statement and your inventory valuation dollars off your balance sheet. If you use a cloud-based inventory management tool, like ChannelAdvisor Premium, you could just do a quick look up / export from your sales and inventory views to get this data at a moments notice – this is VERY powerful when you need to make quick decisions on Buying or Selling strategies!

Ok – so you have your turn ratio – now what?  – Let’s do some basic interpretation.

Generally, a high inventory ratio means that your company is efficiently managing and selling its inventory. The faster the inventory sells, the less cash the company has tied up. However – if you are selling closeouts or using drop ship services – high inventory turnover can present a danger in that it can often lead to stock oversells.

If your company has a low inventory turnover ratio, then there is a high probability that you are holding obsolete inventory which may be difficult to sell. This often erodes your company’s profit – creating the oft cited phrase, “…where is it all going??!”. Keep in mind – you may be holding bulk inventory for legitimate reasons. This is often the case for retailers who are preparing for the holiday season, among other valid reasons.

It is important for you to understand *why* the inventory turnover ratio is high or low. In order to do that, you need to look at the company’s investment in inventory and determine what inventory is being most productive. This brings us back to the question of how analysis like this can help increase sales. Here is a real-life example:

If you have the ability to create a spreadsheet that lists all of your SKU’s, with unit cost basis, qty in stock, qty sold and net sales – you have absolute GOLD at your fingertips!  A couple of quick formulas will give you total inventory value in dollars and total sales in dollars – thus your basis for your Inventory Turnover Ratio.  Let’s say it produces a ratio of 4.27.  Now what?

* Once you have recorded this ratio, keep it charted so you can use it for comparison  later…How does 4.27 ITR stack up against:

• how I was doing last month?
• last year at this time?
• against industry averages?

Next, you may take a look at some of the individual SKU’s for comparison. What five SKU’s am I carrying the most of? The individual ratios for these SKU’s should be higher than that of your total ITR.  If they are equal or lower – chances are they are MAJOR dead-weight, or represent significant risk should there be a market shift of some sort. This same logic can be broken down and applied by marketplace: What is my ITR specific to my:

• Website sales?
• eBay store vs eBay auctions?
• Amazon sales?
• Buy.com sales?

A concerted effort to tighten your ratios on these will have a long term positive effect on your bottom line!

Unfortunately, I can’t dive deeper here – since every business is going to have nuances that can’t be captured in a little blog space… But feel free to post questions or email me with specifics, and I would be happy to help you take advantage of the data you have to make your business even stronger.  Bet you can’t wait for the next installment in this series…the Quick Test…the Financial Ratio.  If you REALLY ARE excited…then you (like me) just passed the NERD TEST

I wasn’t always the smartest kid in class, or the most talented in any particular craft…but in the course of moving 13 times in my first 15 years of life, I found that I learned invaluable lessons about building relationships and “opening new doors”.  And those lessons, as I found over time, could be applied in ANY environment – be it personal or business.  So what exactly does that mean, you say??  Ok – fair question.  Let me give an example from the early days of starting up grapevinehill.com (online discount footwear retailer):

[phone rings] …Uh, hello, grapvinehill.com – this is Mark speaking.

Joe: Yeah, this is Joe from TB Footwear returning your call.

Mark: Oh great – thank you for returning my call, Joe.  I heard you were a hard man to track down, but I wanted to see if maybe you could carve out a few minutes to meet and see if there might be some opportunities for us to work together.  Are you going to be in the office next week?

Joe: Next week? No…but, you’re going to be at “the show”, right?? Why don’t you swing by on Wednesday about 1pm and we can chat.  I heard a little about you from Tony, and your story sounds interesting…

Mark: The show? [panic sets in as I realize I have no idea what he is talking about] Uh…OF COURSE I’LL BE THERE!  Joe – I look forward to seeing you next Wednesday! [click]

Now there I was – sweat dripping off my brow – excited, yet completely baffled at the same time.  “What show is he talking about??!!”, I screamed!  My business partners and I scrambled feverishly to find out what he was referring to.  After a short period of time Google-ing every footwear related show, we found the one that was next week.  It was the WSA Show in Las Vegas…oh boy, VEGAS, here we come.  We immediately booked our flights and found ourselves stumbling into a dirty room at the Flamingo to start our adventure.  To make a long story short – I ended up meeting Joe a few days later.  We had a long talk about business, our families and found that we had some unique ways that we could work together.  The bond was built and then strengthened through business – I helped him by liquidating his slow moving inventory, and he helped me by supplying a strong brand name to my business and consistent/affordable supply.  In the months and years to come, Joe became a strong advocate for my business and was always happy to introduce me to “friends” in the industry.  By cultivating that one relationship – I was able to open doors with a dozen other brand designers that brought in $20+ million in sales for my little .com start up over the first couple of years.  Some general rules:

1. Be persistent.  I had made several follow-ups through email and phone before hearing back from Joe.  I was careful to respect him and his time.  I sought out common interests – and more importantly common business goals that I thought would keep him interested in talking to an “unknown” like myself.
2. Be genuine.  NEVER be disingenuous – you will be exposed faster than a long-tail cat in a room full of rocking chairs!  Take a genuine interest and make a concerted effort to find the win-win recipe for the relationship.
3. Protect the relationship.  Treat the relationship like precious GOLD.  If the person you are dealing with feels like you truly have their best interests in mind, they will go out of their way to give you as much attention (and leads) as possible.

I applied this same approach in opening doors at hundreds of footwear companies as well as marketplaces such as eBay, Overstock, Buy, Amazon, Google, Microsoft and many other partners along the way – each one paying huge dividends by virtue of building relationships as a “go-to” source and partner. You will knock on dozens, if not hundreds, of doors.  Some will not answer.  Most will politely say, “Thanks, but we are not interested right now.”  Sometimes – all it takes is ONE…and then ANOTHER…and ANOTHER…and ANOTHER!  So keep knocking, and then treat each open door as a crop that will reap a huge harvest if you tend to it carefully and thoughtfully each day

Here are some practical tips to help identify and reduce fraudulent order fulfillment.  First – create a system whereby your staff can quickly identify and flag orders for “fraud screening”.

1. Flag ALL orders that are set for Overnight or 2-Day shipping.  Usually, the perpetrators of fraud want their items FAST so there is little time for vendors or victims of fraud to react.

2. Flag ALL orders where the “Bill To” State is different than the “Ship To” State.

3. Most businesses find that particular products or product categories are more frequent targets for fraudulent transactions.  For example – in the footwear world – Timberland boot and high-end Nike sneaker orders represented over 30% of all fraudulent orders from 2005-2008.  Have your team keep an eye on trends and compile a product “watch list”. (the TSA may want to take notes on this one!)

Have a physical “checklist” for your team to use so that they can quickly and efficiently pre-screen the orders that have been flagged for review.

• Check for discrepancies in Bill To and Ship To addresses. Most fraudulent orders will use a different bill to than ship to. To prevent this, some merchants require the bill to and ship to to be the same. That way, if the person is using a stolen credit card they are required to at least ship the product to the billing address. This is not practical for all merchants since more and more shoppers have items shipped to work addresses. Therefore, a review process becomes a necessary evil.
• Are the Bill To and Ship To names significantly different?
• Are the Bill To name (“Julia Johnson”) and the email address (“George3456@ aol. com”) totally unrelated?
• Does the contact phone number look legitimate? For example – your item is shipping to CA, but you see a (212) area code (NY) in the phone number field.

Most orders, when reviewed for simple discrepancies, will be deemed good to go and can be inserted back into your normal fulfillment process.  But since the screening process should be a quick step – it is usually well worth it to be more cautious than not.  So…you have a stack of 20 orders that still look suspicous…what next?

1. First things First – CONTACT THE CUSTOMER!  Have an email template ready to roll – add all email addresses to a BCC and send.  The email should be something like: “we appreciate your business very much…as part of our quality control process, your order was flagged for order verification.  We will hold you order for “x” days or until you respond to confirm the order…” (now, whether you really do HOLD or SEND the order is up to you). Most of the time, you will NOT hear back because the email address was totally illegitamate.  Email a followup to the customer in 2-3 days to let them know that the transaction will be cancelled “for their protection” due to fraud screening process.  In the rare cases where the order ends up being legit, the buyer will typically appreciate that you cared about “protecting” them against fraud.

2. Another easy step is to do an online search for the phone number. Did you know you can Google a phone number?  If the Bill To address is Syracuse, NY and the phone number you searched comes back as a cell phone in Reno, NV…it’s a safe bet you have a fraud case on your hands.  So MAKE THE CALL…9 times out of 10, this step will answer the question pretty clearly for you.

3. Check the IP address of the transaction: In most cases, your sales report will tell you the IP the address the order came from. If the order is shipping to Canada but it was placed from an IP in Nigeria, the big RED FLAG should be going up!

4. AVS/CVV Codes: Get familiar with the codes that your gateway or processor uses to verify the credit cards when it comes to matching the CVV2 number and the billing address.  A quick check of the codes for the transaction may show a mismatch, which you may or may not have set to automatically reject. If you review these daily – you WILL see a clear pattern of processing codes associated with suspicious orders.  GET TO KNOW these patterns – it will save you a ton of money on chargebacks!

5. Compile a list of “DO NOT SHIP” countries. You will find that there are some countries where fraudulent transactions are rampant.  For example, most online retailer will tell you that if you can help it…do not even offer shipping to Nigeria, Eastern European countries and Russia to name a few.

6. Don’t be afraid to ASK FOR PROOF: you typically won’t need to go this far…but when communicating with the buyer, you can ask them to send in whatever he/she used for proof that he/she is indeed the customer.  Do this ONLY if you are talking to someone, but you still have reason to have a strong suspicion. You can ask for:

• FRONT/BACK of Credit Card Used
• Copy of License/Passport ( if international)
• Verification of address or home phone number

I have used these and a variety of other “Best Practices” and have found them to be very effective. Merchant processors such as Authorize.net, Google Checkout and PayPal or even shopping cart packages from Magento, asp.Net, ChannelAdvisor or UberCart will provide additional tools you can implement to curtail online fraud. While nothing can be 100% fail-proof, following a strict fraud-screening process EVERY DAY will save you a ton of money and lots of heartache in the long run!

Ok…so what’s the “Quick Tip”, you ask?

Simple: Don’t try to make life “easy” by creating a single title that you use across multiple marketplaces.  Create and save these (for example) to your database: Store-Title, eBay-Title, eBayStore-Title, AMZ-Title, Buy-Title, OS-Title, Misc-Title.

Each marketplace has:

• different rules and limitations
• a slightly different audience to cater to

And in order to thrive, you MUST take advantage of every possible opportunity.  One example of this is -  Website vs. eBay vs. Amazon titles.  Your own website may have a character length limit for title – usually up to 100 chars.  eBay only allows 55 chars in title…so use EVERY one and make them count!  Amazon allows up to 100 chars.  This may seem like overkill if your title is the one being displayed by Amazon, but be aware regardless that this is a primary search field in AMZ – so use ALL 100 characters wisely to optimize search traffic.
A wise investment is made either with internal or external resources to help you achieve data nirvana – usually by building tools that do the work for you based on business rules and a variety of individual attribute fields.  Look into doing what I have done for my own businesses and client sites alike – build XLS scripts that automate most of these tasks.  Then you can bulk upload data or build API links between your offline and online database.  Many of my clients have taken advantage of these opportunities with use of mySQL or Access offline, and .net / ChannelAdvisor Merchant platforms online. You can do this in a relatively short period of time – don’t get left in the dust!

In part one of my series on SEO “Secret Sauce”, I talked about Grassroots PR, and the methods I use successfully to build tremendous traffic streams.  In this installation, we are jumping into Buyer Search Logic – otherwise known as Shopper Psychology – and how it differs from traditional product marketing.

The most significant SEO oversight I see made (and it is made by virtually everyone – even the BIG BOYS) is that marketing staff tries to apply traditional merchandising practices into the online world.  So the foundation of their marketing effort is corrupt from the get-go. The common approach most often skews toward the ‘product’ itself – instead of what the buyer is actually looking for. Let me give you a specific example:

A web marketing manager (“Rick W”) is charged with getting traffic and ramping up sales on a line of womens boots that were recently worn by Kathryn Morris (from CBS’s Cold Case) while being interviewed by Jay Leno.  Leno casually comments on how great her legs look in her new boots and she says “I just LOVE my new Kors VooDews”.

Rick W says “give me all the product information on this boot” – “this is going to be a HOT seller!”  The box has the following label information: brand = michael kors, color = cappucino, style number = MK23019-101, style name = VooDew, height = 15″ tall, material = nubuck leather.

Your typical everyday marketing genius looks at this and puts together a title and content that focus the attention on these details – along with some flowery marketing jargon:
Couture Cappucino Nubuck “VooDew” Boots by designer Michael Kors
This is probably followed by more catchy content such as “haute couture”, runway ready, fashion forward, blah, blah, blah…

JoBeth Rath is a savvy Internet shopper who saw them worn by Kathryn and says to herself…”I’ve got to have those boots!”.  JoBeth remembers hearing “KORS”  and “VooDew” – so she has a good idea how to find them.  How does she search for them??

“Kors Brown Voodoo Boots”

How much of the search traffic is Rick W going to get compared to my site?  Not very much. You see, I got inside JoBeth’s head and realized that she doesn’t have the boot-box in her hands…she doesn’t know that Michael Kors decided to call them “Cappucino” instead of Brown…she doesn’t know that Michael Kors decided to be playful and name them “VooDew” instead of VooDoo…there is a lot she may not know – but she knows generally what she is looking for.  So what did I do to make sure she could find them on my site:

1. I created a more search intuitive Title – including this and a host of common terms into my browser <title> tag: such as Michael Kors Cappucino Brown “VooDew” (Voodoo) Knee Boots – as worn by Kathryn Morris on Leno.
2. I put all of those words – along with multiple spelling and gramatical variations into my Meta-Keywords and Meta-Description tags.
3. I made sure my actual text-based item title was consistent in the html itself
4. I made sure my image alt-tags reflected the same consistency of title / keywords
5. I made sure my product description included ALL of that (AND some nice flowery marketing jargon).
6. I probably also have a nice little section in the body that spells out EXACTLY what is listed on the box.
7. I included the UPC / Barcode info in my listing in case JoBeth decided to use an app like “RedLaser” on her iPhone after she comes across it in a retail store.

If you are not “getting inside” your shopper’s heads, you are MISSING THE BOAT.  STOP thinking of selling product – and START thinking of selling based on most common SEARCH!  I have implemented Channel Advisor’s Merchant Premium platform to manage “logic” across several of my own businesses, as well as dozens of client sites – optimizing search and datafeeds to marketplaces such as eBay, Amazon and buy.com (to name a few). Feel free to ask me about the tools you can use to implement these strategies quickly and consistently across your product catalog.

Leaving Leogane, Haiti (again) was one of the hardest things I have ever had to do.  I went with a mission – to help build a 2-room home and to deliver a water filtration system.  You’d think that there would be satisfaction in “accomplishing a mission”.  Call it an entrepreneurs disease… call it classic “Catholic Guilt” syndrome (though I am not Catholic)… call it what you will.  The “What More Can I Do to Fix This” complex is overwhelming – creating tremendous heartache – and a focused desire to go back as soon as possible.  It’s one thing to just want to overcome such poverty and destruction…it’s a whole new ballgame when you invest in the people and they become like FAMILY to you.  Having spent considerable time learning the Haitian Kreyol language, I was able to communicate and bond with many new friends.  They all wanted to know when I would return…  “M’ap tune an Janvie” was my immediate response – “I will return in January!”.

So now I am back in the US – but how does one reconcile that desire and heartache with the NEED to jump back into the fires at home?  Which is the “Real” world?  Is there a distinction?  I know that both worlds are real – and important – so, how do I shift back to THIS world’s priorities?  Should be simple – but it’s not.  Just like any other major challenge life may throw at me, the most important thing to do is literally put one foot in front of the other and know that there is PURPOSE in meeting the the needs of my clients (and my family) here at home.  And ultimately, being EXCELLENT in what I do here will help me achieve the goals and objectives to make an impact-full difference in the lives of my “family” in Haiti.

Thank you to all of those that helped support my most recent trip – with prayers, gifts and financial support – I could not have done it without you. I will be following up with more “stories” shortly – giving a bit more light-hearted look into the trip.  But for now – THANK you all again

“You have to do a little research before you pitch your story – and then find creative ways to continue a stream of follow-ups.” said Jeffrey Hodnett, who has run his own public relations firm for over 10 years out of Beverly, MA. He specializes in helping the small businesses professional. Jeff continued, “The follow-up is the key public relations task, and often the most skipped over”.

This research doesn’t require a trip to the library, but it does require diligence, research and some common sense. First, businesses need to identify local publications, trade magazines and online resource sites that cover their market – or components of their market. Second, they need to connect with writers within these media outlets that are most likely to be writing a story that might touch upon their business. For example, I knew that Robert Hof covered e-commerce retail for Business Week magazine – therefore, I used my network to make sure he “got wind” of my online shoe start-up. The grapvinehill.com “story” had a close correlation to some of the buzz surrounding the e-commerce boom – and *BAM*, there we are in Business Week! BIG uptick in business

Now…think of an interesting story. What sets you apart from competitors? How does your personal story figure into your business? Is there an important event or date that might give writers a news hook? Are there market conditions that are headline news that can be tied to what you have to offer? When making your pitch…Get to the point quickly! Writers want to quickly assess if your story is a good fit for their next article – otherwise you will lose them

These efforts cost a business nothing more than short bursts of time, (5-10 minutes a day) which is important to note because public-relations expenditures are typically in the discretionary budgetary ledger. When the bottom line gets thin, PR often gets whacked.

Luckily for me, and for those of you with tight budgets, there are a number of Do-It-Yourself PR services available on the web. While a PR firm like Jeff’s can cost as little as $500 per month (and well worth it, I might add), many of these services cost almost nothing at all.

• PRWeb – This website helps companies create press releases and then pumps out the releases to search engines, news sites, subscribers, journalists and more. Press releases start at $80, which PRWeb distributes to all major search engines, various news sites plus five industries and two geographic regions. Distribution expands as prices ramp up. At the top end, for $360, PRWeb says your release will go to the New York Times, USA Today and other premium outlets, and you can include pictures, videos and other bells and whistles.
• 1888 Press Release – Similar to PRWeb, this site offers more a la carte pricing, arguably giving businesses more finite control. Its editors review press releases to make sure they have appropriate content while checking for grammar. A bare- bones release costs $15. A few options can be added on, such as search engine optimization, at $50 per module. Interested businesses should sample the different offerings.
• MediaSync offers its users access to millions of pieces of content that it aggregates according to markets or subject matter. It allows users to identify and contact the writers and bloggers who have paid the most attention to a user’s business. And MediaSync does this for free. I believe MBlast just launched two refined services that charge subscription fees in exchange for “going deeper in measuring influence” of writers.
• Handle Your Own PR is a do-it-yourself PR service specializing in serving entrepreneurs and small, medium and home-based businesses. The website offers free PR tips, low-cost media lists, and press release writing services. Media lists cost, on average, $100 each.
• Help a Reporter Out, commonly known as HARO. Businesses register as sources, identifying their specialties. Journalists make queries—on average over 200 per day. If a source can help out, he or she e-mails the journalist. If a journalist is interested, he or she will contact the source (you or your PR agent) and conduct a 10-20 min interview. The service is free and can be a HUGE payoff.

True grassroots PR is effective when you persist in follow up and find “cheeky” yet relevant stories to share with the world. Editorial departments want to know your story. Journalists want to learn about what makes you tick and what obstacles you’ve had to overcome to get where you are today. They all love telling stories…”Stories” are the heart and soul of PR. I can tell you from years of experience with PR – this is a KEY part of my SEO secret sauce. Good, smart, effective, relevant and persistent value-add CONTENT. When it becomes more than just YOU talking about your business, you become relevant to the WORLD!

But seriously – my boys in Ubel-tundi put together some pretty fresh rhymes with inspirations coming from the Boogie Boys, UTFO, Sugarhill Gang and yes…Kool Moe Dee.  Naturally, I was surprised and intrigued when I heard that #NoreenA @ChannelAdvisor was bringing the Kool man himself in for a private concert during the Catalyst 2011 Conference. So I’m thinking to myself…ok…I remember liking his stuff – but he is OLD (like me) and the last rap show I went to was just LOUD and kinda sucked.  How *good* could it be??

I’m just going to blurt this out…Kool Moe Dee has STILL GOT IT.  This was one of the best shows I have seen in a while.  Very entertaining, great sound quality and FUN.  So – first of all – THANK YOU to Channel Advisor for a very cool venue and event.  What probably put the icing on the cake was getting photos and video with Scot Wingo on stage doing the whole hip-hop gig (shades and all).  Also – I would be remiss if I didn’t give mad props to John “Big Dawg” Lawson (aka @ColderICE) who ripped up a sweet rendition of Rapper’s Delight…and I have video to prove it!!

Did anyone see the “dancers”??  holy &#@*& batman…never thought I’d see THAT at a CA event…but it was all good in the hood…fit the motif, I guess   The event was rounded out very nicely with an endless supply of libations, TONS of food from a variety of “Food Trucks” (including my favorite…the “Meatloaf Grilled Cheese”, oh…and the “Fried Duck Fat” too!).  I mean…c’mon…how often do you get a chance to discuss Bing search strategy over a buffalo chicken slider with Scot?! Which reminds me – The signature drink of the night was the “Kool Moe Wingo”.  Though disappointed that it didn’t come with an R2D2 drink stirrer..the CA branded light-stick stirrer DID resemble a light sabre!  Good friends, good dancing (reminiscent of J2 bachelorette bash in Vegas!), good drinks…and of course Matt K from StreetModa.com in his “wingo is my homeboy” t-shirt….priceless.  Thank again to the CA events team (noreen, candace, amy, kathy – and the rest of the “fly-girl” crew) for an awesome night!  Goodnight, Durham

I *almost* made the fatal mistake of thinking that I had “heard it all”, and nearly skipped out of this year’s conference.  Wow – am I glad I didn’t!  Fortunately, I got an email from the event coordinator (aka rock-star) reminding me to register.

A word of advice… if you are (or aspire to be) a multi-channel sales kingpin -building your own website sales channel as well as dominating the 3rd party marketplaces (eBay, Amazon, Overstock, Buy.com, CSE’s, etc)… Never EVER miss CATALYST!!

The sessions and keynotes were valuable – but as always – the Roundtables and  Networking were unparalleled in their ability to target REAL business solutions and strategic objectives.  An example of this was an opportunity I had to sit with a new B2B e-commerce seller who was considering signing on with Channel Advisor.  Recently, I have found myself working with a growing number of B2B clients and needed to get some specific insights into meeting the unique demands of the B2B space.  The company needed to understand how they could best leverage multi-channel sales to augment their wholesale distribution.  It was a win-win for certain as we spent the better part of 2 hours trading KEY information points. We then headed out for a cocktail reception where I was able to connect them with the Director of Biz Dev at Buy.com – where they will now be able to create a whole new revenue niche for their business.

Moral of the story: If you ever consider missing Channel Advisor CATALYST…have someone hit you over the head with a golf club (from RockBottomGolf.com of course) and slap you back into reality…this is an IMPORTANT conference