Classic Car Parts Marketing

Recently, I was privileged to have been invited to conduct a Customer Acquisition seminar for the Direct Marketing Association in New York (along with Shari Altman). A topic I wanted to cover in some detail is one of my favorite prospecting techniques: paid search — also known as PPC (pay-per-click).

Now, one of the smartest people I know is my good friend Alan Rimm-Kaufman, who also happens to be a leading expert in search engine marketing (his agency, the Rimm-Kaufman Group, handles paid search for a ‘who’s-who’ of internet retailers). Alan kindly allowed me to ask him some questions with a video camera rolling. My seminar participants were keen to hear what Alan had to say, and I hope you’ll find his comments useful, too. Part 1 of the video is about 8 minutes long; part 2 is about 6 minutes.

Technorati Tags: alan rimm-kaufman, rkg, search engine marketing, ppc, google, adwords, paid search

As a catalog mailer — and now as a consultant — I’ve negotiated lots of printing contracts, from small jobs through multi-million-dollar, multi-title agreements. Along the way, I’ve wised up to some of the ways any cataloger can save on printing costs. Here are three ways to save money:

1. Look at paper requirements

If you’re printing fewer than, say, 1 million catalogs a year, chances are you are letting the printer supply your paper. (Larger players typically purchase their paper separately, but we’ll leave that subject for another time.)

Here is what I usually see in such printing quotes: the printer agrees to produce a given quantity of your specified catalog for $xxx, which covers manufacturing and ink, and agrees to supply the paper at a specified cost. They may tell you the paper price per cwt. (hundredweight) or per thousand copies. And, they will state the charges for increments above or below the “base” quantity.

But, one critical factor tends to get glossed over when you compare quotes: How much paper (in pounds) will the printer be charging you for? If you look carefully, you’ll see large variations, some caused by differences in manufacturing methods and some just padded in for profit. If they don’t spell it out, just take the total paper price and divide it by the price/cwt.

In other words, don’t judge the paper cost by the price of the paper price alone. If Printer A is charging $44.50/cwt (per hundredweight) for your grade and weight of paper, while Printer B is only asking $43.50/cwt for the same paper, look closely at how many pounds they’ve each figured into calculation of the total paper dollars. Printer A may require 155,000 lbs. of paper, while Printer B figures 167,000 lbs. (this much difference is not uncommon). In this example, Printer B’s paper is cheaper by $3,670. And if you’re dealing with a multi-issue contract, paper prices may float up or down, but the amount of paper for a given page-count and paper stock can be fixed in the contract.

The fact is, paper is a profit center for most printers. They can’t predict exactly how many pounds they will need for a given print run; spoilage tends to be variable throughout the system (core waste, press startup, bindery startup, etc.). What they do is include enough to handle expected makeready and run waste, and then pad in some extra. You’d better believe they err on the side of caution, meaning that most of the time, they “under-consume.” What happens to the extra paper you’ve paid for when it doesn’t get used? They just keep the paper and your money, of course!

I’m not knocking them; they’re just trying to make a profit. But they fully expect that a sophisticated buyer will negotiate the amount of paper used, along with the other numbers in the bid. And, incidentally, the savings enjoyed by large catalogers who furnish paper to the printer come mostly from a) paying only for the paper that’s used, and b) taking advantage of cash discounts the mills offer for payment up front — not necessarily from lower paper prices.

2. What happens when you grow?

This is one I figured out the hard way, a little over 20 years ago. I was with a fast-growing catalog company (Crutchfield Corp.), and I got print quotes based on 1 million copies per mailing, with per-thousand prices for increases over the 1 million. I dutifully compared all the printers at that same quantity, so that I would have an apples-to-apples comparison. What I neglected to do was to compare the prices at 1.5 million and 2.0 million. The printer I chose, knowing we were growing fast, had cleverly provided lower prices at one million, along with higher per-thousand prices on incremental books (which I had ignored).

Through the course of our contract year, we grew into the higher numbers, and I learned an expensive lesson.

And here’s something interesting to do when you look at a printing quote that’s given to you in that format: Take the “incremental” cost (the per-thousand) for the job — or for any aspect of it — and multiply it by the quantity in the “base.” The difference between that product and the amount they’re charging for the base quantity is basically the imputed makeready cost.

Example: Printer charges $40,000 for 100,000 copies, plus $35/M for additional copies. (M is thousand in printing shorthand.) From this, you can infer a makeready charge of $5,000.

In my case from the 1980’s, the makereadies built into the printer’s pricing structure were actually negative!

3. Ask for a Pro Forma (sample) invoice

The most sophisticated way to buy printing is to negotiate — separately — each component of the process, from prep to presswork to binding to distribution. But even with lots of experience, it’s hard to predict exactly how you will be charged for a particular catalog specification. To gain a better understanding of how each printer would actually invoice you, request a sample invoice for your most likely page count and quantity. That way, you’ll get to see all the little charges that otherwise may seem like “gotcha” surprises when the real invoice arrives … and you’ll be able to compare printers more fairly.

Technorati Tags: buying catalog printing, negotiation, printers, catalog paper

I’m often shocked by the discounts and price cuts some catalog and internet retailers hand out like candy. If you’re like most auto parts retailers, you sometimes feel the need to stimulate business, or to match competitor’s price. And at times this is necessary … but make certain you understand the consequences before you act.

While there are lots of valid theories on price-setting, I’m simply going to address this: the effect of giving away a discount.

Quick – you’re thinking of offering a 15% discount. What percent increase in business (in units or orders) must this generate in order to break even?

If your margins are typical, you’ll need to sell at least 50% - 60% more just to bring in the same profit contribution! If this surprises you even a little bit, I’ll show you a simple formula that will apply to your business. Read the rest of this entry »

Technorati Tags: pricing, car parts, profit margin, contribution, discounts, retailing

This morning, my son put me onto a website he found that lets you choose a car model and it returns current offerings on eBaymotors and classifieds (mostly Craigslist) from across the US. I’ve generally found that Craigslist.com is a great place to look for cars, but — until now — you had to search city by city.

In this site, results come back in an easy-to-use list format, complete with a thumbnail photo, the vehicle’s location, description, price (or current bid, for auctions), and a hotlink to the actual ad.

I can’t tell how serious the designer is about maintaining and developing this tool, but for now it’s handy and fun if you’re interested in one of the 30 or so types of car listed. For example, I found 326 models of Alfa Romeo. You can filter your results; typing “84″ in the search box netted me thirteen 1984 Alfa Romeos. At times, you’ll find cars double-listed because the seller has them in more than one Craigslist city.

Check it out foryourself at http://www.jaxed.com/cgi-bin/ms.cgi?.

Poking around the rest of jaxed.com, I found:

1. The fellow is into Corvairs, so he may be weird but can’t be all bad ;-)
2. He’s also developed a free tool that lets you search Craigslist and eBay listings for misspelled items, on the theory that they’re less likely to be found and may sell at bargain prices. It uses a variety of techniques to arrive at misspellings. Try it here.

By the way, should you decide to bid on a car you find through either of these sites, it would be wise — just on general principle – to make sure you’re on the real eBaymotors by typing in the url directly.

Technorati Tags: craigslist, classified ads, ebay, cars, jaxed.com

I’ve been guilty of this in the past. It’s so easy to swipe the product description text from your designer’s Quark or InDesign file and stick it into your website. But consider this: unlike your catalog copy, the text on your site needn’t be constrained by high square-inch costs. You may as well be sure you’re feeding the search engine spiders plenty of relevant keywords.

What you’re doing is a simple but effective bit of search engine optimization. One obvious tactic is to think of all the different names your customers might call a product, and make sure each is sprinkled into the block. For example, a product you call a “clutch release bearing” may be a ”throwout bearing” to some, and they’ll search appropriately. This effort goes hand in hand with buying pay-per-click keywords for that product. Everything else being equal, when your landing page is appropriately rich in the searched keyword(s), your link will show up higher on the search engine’s results page.

Experts in search engine optimization recommend that you figure out (and write down) the best keywords before you start writing copy — and then create the copy around that list.

You don’t need to go overboard; in fact, Google and the other search engines will actually penalize you for “stuffing” or “spamming” keywords into your pages. The worst things you could do would be to try to hide repetitions of certain keywords (using small or background-colored type) or to use keywords that aren’t directly related to the product (e.g. “Paris Hilton wheel bearings”). The search engines definitely won’t reward that kind of behavior. Just make sure each important keyword or phrase is in the copy, and not more than 3 or 4 times. Some have suggested that the optimal “keyword density” is on the order of 5% of the text (in other words, one out of twenty words).

If you’ve done a good job, it won’t be obvious that the copy was keyword-optimized. All copy should remain in your company’s “voice” — and product benefits should shine through.

What if you have thousands of SKUs? Don’t worry about fixing every copy block. Just concentrate on the top 25 sellers or so, and if you have time, do the next 25 and so on.

To dig deeper into search engine optimization, check out Stephan Spencer’s blog. His site appears to be down at this writing, but it’s worth checking out.

Technorati Tags: copy blocks, catalog copy, website copy