This is a guest post by Derek Traynor of AllMoto.ie, an IIA Member Company, republished with his permission from his blog. In it he writes about a subject dear to our hearts in the IIA: online retail and the knock-on effects of reputable online business for the economy. If you would like to ramp up your own online retail business, don’t miss our upcoming conference, 8 More Ways to Sell Even More Stuff, designed especially for retailers, whatever stage of the online game you are at.
OK firstly let me explain – this isn’t a story about my personal ‘Bedroom Efforts’ (I’ve another blog for that 🙂 ), it’s my opinion, as an etailer (online retailer), on the damage that small, online, bedroom based efforts cause to industry in general.
What I mean by ‘Bedroom Efforts’ is someone sitting at home, on a laptop, listing products on ebay, Amazon and similar, and ordering in stock as it sells. However, let me clarify, my issue isn’t with the sleepy entrepreneurs but rather with the suppliers who decide to sell product through them.
I’ve been harping on about this pet-hate for years now and I’m “happy” to report that in just the last month I’ve had three suppliers contact me with concerns over it – way to get with the times guys – but at least they recognize the problem. These suppliers are eventually requesting minimun retail prices on their products. I’ve no idea where they stand legally if challenged about anti-competition legalities but…. well who cares about that for the moment.
I’m sure a few people are now thinking, “but sure you’re a online shop – who are you to talk?”, but this is where most people are missing the difference: I’m a reputable online retailer, adding value to a customers experience. I do this by providing:
- product knowledge. We’re experts on what we sell and use this knowledge to only sell product that is good.
- product support. If our customers have difficulty with a product we’re there to help by phone, email and often in person at events.
- product backup. Did a purchase break or fall short of what a customer expected? We always repair and/or replacement based on the circumstances.
- stock off the shelf. When a customer buys something it gets shipped within 24 hours (over 85% of the time in my shop).
- a unique user experience. The customer always subconsciously relate to their experience of the product.
- a physical store where people can drop into in person if they want to.
Bedroom Efforts generally damage a product having little or no technical knowledge, no repairs, no returns policy, no parts backup and NO stock. The customer ends up waiting longer, buying ill advised and losing all if an issue arises. What is not seen here is the damage to the brand that was sold. Note to suppliers – one way to lose repeat business is to allow a terrible customer experience in the initial purchase.
The hidden damage goes further though. These bedroom efforts often make almost no margin and that’s fine as they’ve almost no costs. But the damage arises in the lost sale the ‘real’ retailer has lost. Don’t be misled, reputable online etailers have almost as many costs as your local shop (Google ads, website development, online presence maintenance, customer support, STOCK, rent, taxes, to name a few).
What also makes me laugh is that these same suppliers then complain about having trouble getting paid by their retailer network. Maybe it hasn’t crossed their minds yet, but, support your network of retailers. Note to suppliers – IT’S EASY TO GET PAID FROM PEOPLE THAT ARE IN THE BUSINESS OF MAKING A PROFIT.
Imagine this outside Victorias Secrets: “knickers, knickers, two for a tenner”
Chanel and Gucci don’t supply someone so they can set up a market stall outside Brown Thomas (Ireland’s exclusive department store) on a busy Sunday afternoon. Why do suppliers continue to sell to people who just list on Ebay, Amazon, etc, and provide no backup on a Monday morning?
Chanel and Gucci understand the principals of brand image and most importantly – making profit.
Thanks to Derek for that heartfelt post! If you are a member of the IIA and would like to share a guest post about doing business online (any aspect: it doesn’t just have to be retail!) please read our guidelines and get in touch.