Standing in front of the Carl Loebner toy store in the medieval main town square in Torgau, a Saxon city on the river Elbe, you don’t immediately think of Amazon. In fact, almost nothing could seem further removed from the World Wide Web than the stuccoed façade of the store that has been making children’s dreams come true since 1685. And yet, "Germany’s oldest toy store" is one of the country’s most successful Amazon sellers.
Maximum flexibility required for online marketplace
The retailer has 20,000 products listed on Amazon and ships 100,000 parcels all over the world from its own warehouse each year. "This is a full-time undertaking and requires a tremendous degree of professionalism", says Ingo Loebner, the twelfth generation of his family to manage the toy business. Eight of his twelve employees work exclusively on Amazon orders and a large part of Loebner’s own working day is devoted to assessing pricing tools and monitoring competition on the marketplace. "We are highly numbers driven, also when it comes to planning our range", says Loebner. "Our tools show us which products are currently selling well and with good margins on the marketplace and we adjust our purchasing accordingly." But marketplace conditions change on an almost hourly basis; yesterday’s bestsellers may already be a losing deal just a few hours later. "You have to have a really firm grasp of the figures and be alert and flexible at all times", says Loebner. "You can’t down tools and lock up shop at six in the evening when selling on Amazon. You’ll still find me working on Sundays and public holidays, as well as Christmas Day and thereafter."
Modest beginnings, big investment
The long-established Torgau business began selling on Amazon in 2013 – only five products at the time – while still under the aegis of Ingo’s father, Jörg Loebner. Two orders were received on the first night. From these modest beginnings quickly grew a flourishing online business that soon could no longer be handled out of the Torgau store. The Loebners have hence invested some six-digit investment to date in setting up their own logistics centre outside of Torgau and in automated pricing software designed to aid administration. New items added to the range can now be automatically listed and priced on Amazon in seconds. A new order arriving in the system is immediately acted upon by warehouse staff and the finished parcel is on its way within one day.
The toy retailer never considered storing its products in Amazon’s own warehouses as part of the Fulfillment by Amazon (FBA) service, although this would have considerably reduced the high logistical burden associated with meeting Amazon’s strict shipping requirements. "Even though we could save a few euros or maybe even reduce our headcount with FBA, we prefer to handle our own shipping", says Ingo Loebner. "This means we can be more independent."
COVID-19 as a second Christmas season
The COVID-19 pandemic has already clearly illustrated to the retailer the benefits of pursuing this independence from Amazon in spite of the related cost: while Amazon closed its FBA warehouses for non-essential items and delivery times for toys in Amazon warehouses stretched into weeks, it was largely business as usual for Ingo Loebner’s warehouse staff. "People were really ordering like crazy during lockdown", reports Loebner. "Puzzles and board games sold out in no time and many manufacturers could barely keep up with demand. It was almost like a second Christmas season for us."
High seller performance and razor-sharp pricing strategy required for Amazon
Sales on Amazon have now "settled at a high level" and Loebner is back working on the daily routine of Amazon business – which gets harder every day. "Competition on Amazon in our industry has increased enormously over the last two years and the price war is fiercer than ever", says the retailer. "As a seller, you need to be absolutely on top of your logistics, return handling, customer care and service. At the same time, you have to implement a razor-sharp pricing strategy and keep an eye on your expenditure or else you’ll quickly go out of business. Then there are the returns: we first have to get through up to 50 returns a day, with toys that have been played with and wilfully destroyed in some cases, and we also cover the return costs." Loebner is pleased with the experience of the last seven years. "It would be much tougher for anyone just starting out on Amazon today."
Customer base extended from Torgau to include the US and the Philippines
Business not only involves fighting off the competition but also planning for the future. The Saxony-based retailer still sees good development opportunities at an international level and the company has already sent parcels to Amazon customers in the US and the Philippines. The respectability of his long-established business helps him in this – "quality German toys since 1685" is an advertising message that goes down well all over the world.