Is a Zulily Sale Right for You?

You've probably had this happen before. You get a random email from a company that is presenting you with what appears to be a big opportunity. Whether you know the company or not, it can still feel risky but you're also intrigued. But knowing the best way to look at the opportunity and knowing others who have done it is always helpful. 

Today, we have Lizzi from Forgotten Cotton sharing a recent experience they had with a Zulily sale, which is much like a flash sale. I know that many makers have been approached by them on Etsy, so I was excited when Lizzi said she'd share her experience. Let us know in the comments what experiences you've had with flash sales or other large wholesale orders! 

Q: Tell us about yourself!
A: Forgotten Cotton is a husband and wife team who design and hand make women's fashion accessories. We have been in business since 2011 and have been full time for the past two years.  We love to create fun comfortable accessories that compliment any wardrobe. 

Q: How did you get involved with Zulily?
A: In December 2014, we were contacted by a buyer on Zulily about doing a branded event (I will explain the difference between a branded event and a collection in a bit). Being super swamped with holiday orders we put off the conversation until January. Right after the holiday season ended we started right back up and had our first branded event in February.   

All Zulily sale events last three days. A branded event with Zulily is 100% your brand. Typically for a branded event they are looking for between 60-100 SKUS. A collection is an event centered around a theme that will have any number of your items and includes a variety of various brands. 

Q: What kind of maker or product does Zulily look for?
A: From our personal experience, Zulily is looking for vendors who can supply a large quantity of items with a fast turn around. They want a brand that has a cohesive look throughout their products lines. To clarify what it means to have 60-100 SKUS, we are talking about anywhere from 2500-3000 items (this is for us personally and will probably vary from vendor to vendor.) You will need to have a wide selection with deep inventory for each item.  I am sure that for bigger brands or a very popular vendors this number could be double or triple depending on your previous sales records plus customer demand.

Fast turn around is very important and highly stressed. All sold items need to be in the mail and on their way to the Zulily sorting facility in 2-3 business days. In terms of a handmade shop that means having all of your inventory ready to ship. That is right-- ready to ship. 

Q: Can you describe your first sale and the lessons you’ve learned from it?
A: To use the word crunchy would be an accurate description of our experience. We understood what we would need to do but it was a stressful experience getting everything flowing in the right direction. For our first branded event we wanted to showcase our Spring Line which meant ordering material for and preparing 100 SKUS from scratch. We started this process in January right after the holiday season and needed to have all our items made, photographed, and paperwork completed two weeks prior to the event starting in mid February. We were under the impression that our total sell through rate on our inventory would be higher than what actually happened. We were left with more inventory after the event that we had previously anticipated. 

So, to sum up-

What did we learn?

1. Making 3000 items ready to ship in less than a month is a lot of work for two people. It is almost an impossible amount of work.  

2. Doing an event of this scale right after 3-4 solid months of work for the holidays was exhausting and crispy. Next time take a break in between because no one can push 20 hour days for that long. 

3. Always go in with no expectations. It is better to be surprised than disappointed.

4. Have a plan or outlet to move your excess inventory. You will have inventory left over and it is better to be prepared than surprised for this fact.

5. Read all the instructions. Instructions are boring but read them anyway. 

6. Ask questions if you have them. Ask all the questions until you receive an answer you understand. 

Q: What’s been your relationship with Zulily since then? What’s the process for getting future sales? 
A: We have a great relationship with Zulily. We did our branded event in February and about eight weeks later were contacted about doing another.  We had a really amazing phone call with our buyer about what went well and what could be improved for our next event. This conversation gave us insight from an outside source into our product line and process. We decided to be apart of a collective in May to see what the experience would be like and it was a positive experience. We were much better prepared for the collection event since we had already gone through the experience of a full branded event. 

We plan to continue to work with them in the future knowing that understanding a new market place is a learning experience and sometimes you just have to ride the wave.  

Q: What advice would you give to someone who is thinking about doing a sale?
A: I am going to make a list for anyone thinking of doing an event with a discount sales website. 

1. Know your numbers. Really- know them. You may think you know them- but you don't. So, get really familiar with your numbers. 

I heard someone say that if you do wholesale you are already set up for a deals website because it is a derivative of that experience but this is not exactly the case. The percentage for each item sold which you receive is about 30-36%. Yes- you can negotiate this number but it will not be far from this range. Remember- this is a website where people are looking for deals so you will need to price accordingly. If your prices are slightly higher by just a dollar or two it could affect your gross sales. 

Some food for thought on how to think about your potential profit. Out of the percentage of profit you will receive you need to consider your cost of goods sold. So for example- you have item X which retails for $20. You are going to receive about  $7.20 from each of those items sold on Zulily. If the item costs $5.00 in materials (this is excluding labor and other costs) you will be making a profit of $2.20 on that item. This is not even taking into consideration that you have to pay taxes on your income. 

2. Consider the overall cost of doing a branded event with anywhere from 1500-3000 items. What will it cost for you to pay for all the materials with shipping? (You can never forget to figure in shipping costs.) Calculate what the total potential profit if you sold every last item.  Now figure out what percentage of sell through you will need to achieve to break even. What percentage is that for you? How many items do you need to sell just to break even? 

3. Remember you will need to ship all your items. Figure the cost of clear bags for packing, labels for each item, and boxes to mail your items. There are very clear rules on how to ship your items so you will need to be prepared for this prior to your event. 

4. Their customers are used to a certain shopping experience regarding photos. Think of the Amazon White Background shopping experience. It is highly, highly recommended that you follow their photo guidelines as ignoring them could potentially hurt your selling experience.  

5. Just because you see other vendors who may be similar to you selling through a website like this does not mean you have to feel like this is the right decision for you and your business. You need to look at the work involved as well as your own numbers and decide for yourself- is it worth it? How can this benefit my own business? Is this the right place for me to sell?

6. Take all of the above into consideration again. You are making an agreement with another company to sell on their website. You will need to follow their rules and deadlines. It will cost you a lot of money and time upfront. If this is not something you think you are prepared for then do not feel bad saying no. It is your business and your decision. You are in power of the direction of your business. 

Q: What’s been your most popular seller? Is that different from other outlets?
A: Our best sellers on Zulily were our headbands and lace products. We actually have seen the same response on our own selling platforms which to us means that these are good products to carry. 

Q: What increases to your website/facebook traffic and Etsy have you noticed?
A: After a branded event and a collection, we have not noticed any increase in sales or traffic. What is important to remember is that Zulily attracts a certain type of customer and while there is the possibility that someone may love your items search for you, what is more likely to happen is that they will wait for you to be on Zulily again. So the chance is higher that you will gain a Zulily audience and increased sales with more events on this platform than for those customers to cross over into your personal social media and outside shopping space. 

Q: Has your audience expanded through this?
A: We have not seen an increase in our personal audience however we do have a growing audience on Zulily. On Zulily, customers can "heart" your business and be alerted to when you are having a sale. What this means is as your Zulily audience grows, more people who love what you are doing will be alerted to your upcoming sales. When considering the audience growth for a website like this- it needs to be viewed in terms of growth within the specirfic marketplace. 

Q: Are there any “rules” that make a sale this kind of tricky?
A: Zulily is very specific and clear about their rules and guidelines.  Without getting into too many of the specifics just know that you will be required to meet all deadlines. You will need barcodes and SKU numbers. They have clear deadlines for submitting your paperwork and photos as well as approving each step of the process.

You have a vendor portal which clearly explains each of these steps. There are very specific instructions for how to pack your items and ship them. It is important to read all the paperwork (twice!) and make sure you understand what is required of you. If you have questions they have really great people available to you to ask questions for clarification. 

Q: Were there a lot of overhead/startup costs you had to float before you got paid?
A: Yes! Zulily runs on a NET 30 meaning that you will be paid 30 days after your invoices are submitted. This means that the personal business cost of doing the event is coming directly from you. This is why I stated that you should be very clear about your numbers and what you can afford to do as a business because the upfront cost of doing an event like this may not be a risk you are willing or can take for your business. 

Q: Anything else you'd like to add?
A: I think that where Zulily is great is selling in volume. You are no doubt going to sell a large quantity of items in a very short period of time.  But you are also going to have to prepare and spend money on a large amount of items in a very short period of time. Be realistic with yourself about what your capabilities are for an event like this both physically and monetarily. It is OK to say no or not right now. It can be something you may be better prepared to tackle in a year from now.  

Q: Where can people find your stuff?
A: Come shop with us! 
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