The coronavirus has already left many businesses in a tailspin. Even the largest of companies are in recovery mode, trying to recoup losses from the devastating outbreak.
But one ecommerce company sits in the same camp as Amazon, Target and other retailers that stand to profit, even during these tough months.
McCombs Supply Company is a family-owned, Pennsylvania-based business that sells repair parts for dishwashers, dryers and dozens of other home appliances. The company rakes in 90% of its total revenue through various ecommerce channels, including Amazon, Walmart and its BigCommerce webstore.
In the last 30 days, as major retailers across the country were shuttering their doors, McCombs saw an 11% increase in its online sales.
We spoke with vice president of McCombs, Ken McCombs III, to get a behind-the-scenes look at how his company got to where it is today, alongside his advice for other sellers looking to build their immunity against sudden disasters.
Catching the Signs Early and Stocking Up on the Right Inventory
From a business standpoint, McCombs is one of the lucky few belonging in an industry that’s essential to home life. As Americans are staying home and using their ACs, fridges and other appliances (or tackling their “honey, do” lists, as Ken puts it), things are bound to break. People will then search online for replacement parts.
It’s a pattern that Ken has seen before. Over his 18 years in the ecommerce industry, McCombs has weathered many natural disasters. Though none quite compares to the pandemic today, Ken had predicted the impact of the virus very early on.
“As soon as I saw China shutting things down, I couldn’t imagine it not making its way here,” he said in our call. “I saw it coming and bought a large amount of product to get ready for this. We normally try to keep 45 days of inventory on hand, but we bumped lead times to 90 days.”
His insight comes at a time when more and more sellers are seeing the need to work outside of the typical 30-day forecasting cycle. While many sellers are retrospectively searching for software to spot trends earlier and purchase more nimbly, McCombs has an existing system for adjusting inventory as soon as signs appear.
Like clockwork, sales on things like indoor air quality parts are “going berserk-ko” now. Ken and his team are working overtime to fulfill orders. It’s a good problem to have as a business, and Ken sees it paying off in the long run.
“I think many of my new buyers will remain long-term customers,” he said. “I think they’re going to remember me taking care of them [by having the right products in stock] and getting them their item pretty darn quick.”
Half Staffed, But Breaking Records
On the shipping side, McCombs runs a well-oiled machine. The company fulfills all orders (including next-day and two-day orders) from a single warehouse in Pennsylvania. Though half of his team is now homebound, Ken and his warehouse staff work onsite to keep their promise to customers that all orders will be shipped on time.
“We haven’t missed a beat in shipping,” confirmed Ken. “We even set a single-day shipping record the other day—we blew the record away.”
He noted that requests for fast shipping from both his webstore and marketplaces like eBay have spiked over the last month, especially as Amazon Prime faces excessive delays. UPS is also struggling to keep up; the company sent an email last week saying it couldn’t guarantee on-time delivery for any packages. As a result, McCombs quickly pivoted to FedEx.
Shipping isn’t the only thing breaking records at McCombs. On the sales front, orders from the McCombs’ website are “going through the roof” as remote employees are feverishly working on the site’s SEO, and a team at Zentail is running Google Shopping ads for the company. Walmart Marketplace sales are also seeing a 20% lift since just a few months ago.
This is all part of the larger strategy behind McCombs’ approach to ecommerce. Beyond simply selling online, the company boasts a large portfolio of sales channels that together blunt the impact of a virus that’s wreaking havoc on both sides of the digital divide.
Linking Arms with the World’s Biggest Marketplaces
Of the sales that McCombs has made in the last 30 days, roughly a third are from its BigCommerce webstore. Another third comes from eBay, and a quarter from Amazon.
This is consistent with trends that the company sees throughout the year. While a majority of Amazon marketplace sellers (60%) rely on Amazon for 60% or more of their annual revenue, McCombs only looks to Amazon for 25% of annual sales.
The remaining 75% come from four different channels—a stripped down roster of marketplaces from what it tested in previous years. At one point in time, the company was testing seven different marketplaces at once.
“People are finding McCombs through all sorts of organic searches,” Ken said. “The work we put into building our keywords, website and other channels is really paying dividends right now.”
“I can’t tell you how great Zentail’s been in getting us on all these marketplaces and putting us in this situation,” he added, referring to McCombs’ partnership with Zentail, which began in 2015. Zentail’s AI-powered PIM tools had enabled the team to launch their first multichannel listings and double their revenue within a matter of weeks.
His team reaps the benefit of a strategy that’s outperforming traditional ecommerce approaches at large, according to recent research. Merchants with three marketplaces and a webstore are seeing a 73% lift in GMV on average during the coronavirus crisis. Meanwhile, merchants who only sell on a webstore or through Amazon are seeing much slower growth—or none at all.
This multichannel approach is a driving force behind McCombs’ recent gains, and one that the team plans to nurture. It’s also one of several tips that Ken has for other sellers. Below is a list we’ve put together with his advice.
- Take advantage of the time at home to optimize your listings, spruce up your website and improve your SEO. This will pay dividends in the long run. (“If I were stuck at home, I’d be working on the backend of my website like you wouldn’t believe.”)
- “Depth of inventory is key.” As you plan for the future, remember to not only carry what everyone else has, but also what everyone else doesn’t have. Consider setting an ABC priority for your products and leaving room for “B” and “C” products that are bought less frequently, but that you know your buyers will need.
- “Take your stuff out of FBA.” When you give your products over to Amazon FBA, you put the control in their hands. Amazon is notorious for trying to cut out the middlemen (other sellers, in this case) and has, in the past, tried to steal McCombs’ top sellers by approaching their suppliers.
- Don’t rely on Amazon for all of your sales. Take this time to get set up on other channels. Amazon isn’t a safe place. It can change the rules any time or try to swing its properties, like the buy box, to its favor.
- Communicate constantly with customers, suppliers, employees, shipping services, your software provider and experts like Zentail. Everyone needs to work together to keep things running smoothly at a time like this.
- Surround yourself with good people. “I’m pretty blessed that I have a strong, dedicated team that works with me. Having the right employees that you know will come to bat with you at a time like this is really key.”
- Above all, stay calm. Take it one order or one day at a time. Think beyond the short term and seek guidance from other experts in the space.
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