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So You Want to be an Online Retailer?
Posted by Scott on 3rd October, 2009 | 33 commentsThinking about selling stuff online? As someone who derives most of his income from advertising, I don’t suggest it — it doesn’t sound like a very fun or profitable venture for most, and it sounds like a lot of work, daily grind, and expense (inventory) for very low margins. On the other hand, if you have something unique to sell, or something you create, then that’s a different story. Don’t get me wrong — retailers are my bread and butter, and there are several hundred online retailers that do things very well, but a lot that don’t.
Still, if you’re confident that you’ll do well, or you’re already selling online, here are some guidelines. Having operated ResellerRatings for 14 years, I’ve learned a thing or two about best practices in online retail. If you plan to do any of the following, don’t even bother — you won’t last or worse, you’ll end up on the receiving end of some government agency’s angst, not to mention a public backlash:
1) Don’t list an item as in-stock if it isn’t. I don’t want to hear that “yeah I don’t have it in stock but it will ship really fast from the distributor or mfg”. If it isn’t in stock at your place of business, it isn’t in stock. If it isn’t in stock but you still want to sell it, fine, display a prominent notice stating “ships within 1-2 weeks” or similar.
2) Don’t list one item, and sell another. Classic bait and switch. This applies to “grey market” goods as well.
3) Don’t call your customers after they order online to try to upsell them. It’s really annoying and always pisses me off. I bought online so I don’t have to talk to you. And 3a) don’t sell an item at a loss, in order to make your real profit on upsold accessories, only to cancel the customer’s order if they refuse to buy said accessories.
4) Don’t write fake reviews at review sites like ResellerRatings. We’ll catch you, we’ll tell everyone about it, we’ll tell the attorney general in your state about it, and none of that will be good for you. And 4a) don’t threaten reviewers who give you bad reviews — nothing good will come from that, instead, focus on getting positive reviews, and try to resolve the issues that a negative reviewer may be having.
And now a few do’s:
1) Do email your customer an order confirmation immediately.
2) Do make it easy to handle returns (requesting an RMA online and a shipping label, preferably), and have a friendly return policy (Zappos now offers a 365 day return policy, free shipping both ways, no restocking fees).
3) Do ship the customer’s order within 24 hours, and send them the tracking id.
4) Do manage your reputation online, preferably at ResellerRatings.com. You can post public replies, contact customers, get email alerts of new reviews, use our exit survey to solicit reviews at the point of sale (after checkout), and a ton more.
5) Do respond to customers who write reviews at ResellerRatings to resolve any issues that they may have. They may well edit their review and you may well convert a critic into a loyal customer.
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Saturday, October 3rd, 2009 at 7:20 am and is filed under Web Business. If you like this post why not subscribe to my full text RSS feed. You can leave a response, or trackback from your own site.
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thanks for your advice.
I am preparing my online retail shop,very exhaust,many things to consdier …
Order tracking is one of the most important things in online business. That and bad communication are those that can make or break a good business.
Good, that I as Santa just work as a dropshipper and not as merchant
Btw, its just 80 days left until Christmas
Make that 52 days! Christmas is upon us, and many businesses rely on this time of the year to make up the shortfalls from other months. I am interested to see what retail figures are going to look like this festive season, with the worldwide recession biting and all.
And today it is 22 days to go and counting! I don’t see any fresh new posts on the blog. Have you guys decided to head of for holidays already?
LOL, jokes aside, this time of the year is soooo hectic, with no time for anything as the crazy rush to get everything finished before closing up for the annual xmas break just leaves no time to even breathe!
I have worked for various online retailers and have also learned a lot about what makes a successful ecommerce store. Managing your online reputation is crucial. It is far too easy for customers to do some quick research on your company. If the results turn up many complaints, chances are, the person won’t make a purchase. Not only do you have to provide great service to avoid complaints, but you also have to address existing complaints to show that you care.
You are right that running an ecommerce store is hard work. You have to take care of the entire process….website design, website marketing, order processing/shipping, customer support, etc. There definitely are easier ways to make money online. For example, you can be an affiliate and skip the whole order processing and customer support side of business.
It is always best to do your research first and have a solid business plan. You can be successful, but you have to work hard and know where you are going as with any other business.
LOL.. “Don’t call after the order has gone through”. Crap, i yell on those calls. I got that couple of times, one i remember about the camcorder and the guy was pushing me for batteries etc. Later he said that the offer is not good for with no accessories on it. CRAP.. It is required to be mentioned on web.
Yes this is definitely the wrong time to be upselling. Before pushing for them to buy more, you have to first prove that your company is capable of successfully delivering what the customer originally wanted. If you want to upsell before the purchase is complete, do so on your website in a careful way.
In today days, people don’t have time to go out and by things they need. And it is becoming more and more popular an online business. Definitely running an e-commerce store is hard work but, if you know exactly what you doing and you know to care of it you can make lot money.
Another way is become an affiliate; selling other peoples products and is much easier because you only must have your web site and promote their product. They will pay you “the affiliate” a percent of each sale.
Selling tanglible goods via the internet is a whole different challenge versus selling ebooks and memberships. As Bratwurst Recipes stated, affiliate marketing will pay you a percentage of each sale, but it still doesn’t give you the kind of profit potential that marketing your own product does.
I agree that the profit you can make from selling your own digital product is much better than affiliate marketing profit. Right now I have some affiliate websites to make some side money, but I really should be looking into creating an ebook or training course.
3a tactic really piss me off…
@Amiga why does the 3a Tactic make you mad? Would be good if you enlightened us!
Till then,
Jean
I was talking about the point 3a. I don;t like when the seller call me or email me and try to sell sth which I don’t need. If I would like to buy this stuff I know how to do online shopping and I would order it by myself.
Making your own product is a lot harder though. You need to create the product, provide support and deal with fraud etc. I would rather do affiliate marketing until I have experience.
This is great information talking about online retailers. I believe that you really need to make sure you have everything in order yourself before you start anything online. Because once you go live you will be having tons of customer support and customer service calls coming in. And you better have an answer and the right answer for them…you will quickly lose customers to other online retailers really fast.
Basically, this is an online retail business with hundreds of exclusive products as well as hundreds of partner stores including Barnes and Noble, Sony Music, Eddie Bauer and more.
Thanks for the honest advice, tom
Yes many people don’t stop to consider all that goes into managing a successful e-commerce store. It isn’t just a matter of setting up a simple site and shipping out products when it’s convenient for you. You have to work your ass off to make customers happy and build a solid reputation. These days it is far too easy to find out what other people think of your business. So you cannot afford to treat customers poorly.
I have worked for various online retailers and have also learned a lot about what makes a successful ecommerce store.
You are right that running an ecommerce store is hard work.
I want to start an online retailer, but I need to know what I would do to start it and get it going.
Replying to customer emails in a timely manner is very important also. Good customer service is vital to an online retailers success because many consumers a scared to purchase online.
Yes customer service is very important. If you don’t treat your customers well, many of your other potential customers will find out. When making purchases online, many people opt to do business with the website that they know will treat them the best.
It is always best to do your research first and have a solid business plan.
let me know about online retailing in details ?
thanks for your advice.
I am preparing my online retail shop,very exhaust,many things to consdier
I currently do some online businesses. This will help me out a bit
Thanks!
Online retailing is a major business, and there is tons of money to be made!
Great advices, thanks for this article! Very useful for me.
This is a very valuable resource! this advices will help me a lot, thanks
Useful Information there …. Just a quick note to say thanks.