David Hall with Julie Rankin of Jackrabbit Music and Bill Walzak of Pro-Active Websites
By David Hall, Vice President Sales and Marketing, Pro-Active Websites
Whether you’re considering starting up an eCommerce Web site, currently selling online or wanting to expand your Internet presence, you’ll most likely encounter some challenging questions. Most center on three main topics: the business of eCommerce, store content and design, or Web site marketing.
This article focuses on a few of the most common questions asked by dealers. Please feel free to e-mail your questions and I’ll be happy to share my point of view.
Question: What are the first things to consider when starting up an online business?
Answer: Look at your business and concentrate on what makes you different from your competitors. Whether it’s a unique service or range of specialty products, focus on that niche and position it to sell online. Be sure that the products and services you select can easily be sold online. It doesn’t make sense to sell something for a low price that weighs 100lb. The numbers won’t make sense to a consumer, and he or she will bail on the process.
The products you sell online should have a high value-to-weight ratio (i.e., a $100 item that weighs only six pounds). Make sure that you do your research and find out how many other dealers offer the same products. Offer your customers a better value, or have the ability to provide your products in some unique way. Perhaps you can bundle items together. This is how you find and develop a niche product or service.
Question: What is the biggest challenge in starting up a successful online business?
Answer: The most challenging aspect of starting and running an online store is getting customers to know who you are, what you offer and how to find you. In addition to providing the best mix of products and creating a user-friendly shopping environment, you’ll spend a great deal of time working on ways to drive traffic to your Web site and keep people coming back.
Focus your efforts on making your store visible to potential buyers. This means employing tactics that are proven to increase online visitors and conversions. A well planned search engine optimization (SEO) and online marketing strategy will usually be enough to get your store noticed. Focus on getting customers to come back.
Question: Should I buy inventory, or use vendors who drop-ship orders?
Answer: When first starting out, consider using vendors who drop-ship orders on your behalf. These relationships have a number of advantages over stocking your own inventory. It’s difficult to purchase and warehouse inventory. Plus, the added expenses of shipping, tracking and managing orders could require extra employees.
Finding vendors who will drop-ship your orders takes away these burdens and can save you time and money. Most reliable drop-ship vendors will use your shipping labels or send the packages with no branding of their own, so your customers will not know the difference when receiving orders.
There are a few disadvantages to using a drop-ship vendor. Some offer lower profit margins and there usually is a small fee for each shipment. It’s important to consider that you are not managing the entire customer-service experience. You have to take a leap of faith in these relationships and rely upon the vendor to live up to its responsibilities. Clarify who is responsible for every phase of processing the order and customer support after the sale.
Stocking your own inventory gives you control over the order process and customer experience. Weigh your options, look at the pros and cons of each, and figure out which way works best for you. Sometimes, it’s a combination of both.
Question: What are the differences between online storefronts and selling on eBay?
Answer: Online storefronts are generally more secure than auction sites are, and the credit card transaction fees are lower than what sellers have to pay on eBay. Just about anyone can sell on eBay, and many sellers do not own legitimate businesses. Although eBay does a great job policing the customer experience with its feedback and Buyer Protection Programs, the risk is higher than is associated with buying from a true retailer.
Use auction sites like eBay as part of your overall strategy. If you rely solely upon third-party auction-type sites (eBay, craigslist, Auctiva) to sell your products, you might encounter more down time, less flexibility and run the risk of experiencing huge losses. This is especially true if there are major policy changes to their selling guidelines and fees, or if they simply shut down the service altogether.
Question: Can I write articles about my products or services and use them on my Web site?
Answer: Yes. Posting articles on your Web site might help your efforts to rank higher within search engines. They are always looking for content that is related to the products and services you are selling. Well written content and high quality articles will help to establish trust and credibility in the eyes of your customers. Focus on information that is deemed helpful or valuable.
Question: How will selling online change in the future? How can I remain current?
Answer: One of the best ways to ensure success selling online is to be able to identify trends and develop educated guesses with respect to where the music market is headed in the future. As shopping online for music gear and accessories becomes more common and popular among musicians, we will naturally see more competition. Focus your efforts on niche items and services to sell; devise unique ways to market them.
Many people like shopping online because it is more convenient and allows more time to shop, compare prices and read product reviews. It will be imperative for brick-and-mortar stores to keep up with current changes or they might face having to shut down their storefronts due to stiff online competition.
Always remember that not only will brick-and-mortar merchants have to keep up to stay competitive, but online merchants will, too. Brick-and-mortar stores will always have the advantage of being able to have direct, one-on-one interaction with their customers. Use this unique edge to listen to feedback from customers and take action to monitor your Web site design, hot products and innovative marketing trends to attract and keep customers.
David Hall is Vice President – Sales & Marketing for Pro-Active Websites. The company specializes in Web development for dealers and eNetwork building for distributors within the music products industry. Feel free to e-mail your questions and comments to dhall@pro-activewebsites.com.