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When it comes to ecommerce most of the information you’ll be able to find online is marketing related. Because marketing is the easy part. That’s why almost everybody assumes that all it takes to build an ecommerce operation is good marketing, a technological sound shopping catalogue solution and a lot of luck.
Marketing and frontend ecommerce solutions are just the tip of the iceberg and in this post I’ll walk you through the most important areas you need to focus on (and you probably don’t) when building an online commerce business. Not site, not catalogue, business.
First of all – it is really easy to set up a store. Shopify, for example, offers all the features you need for as little as $9/month. You can start a store in a couple of minutes and start selling to your customers.
However, no successful store was ever built on software, luck and marketing alone. Top online retailers got where they are selling great products at great prices, delivering fast and making sure that customers are well rewarded for their choice. That takes a lot of work in areas most of us never notice, areas such as:
You are or plan to be a retailer in an increasingly competitive market. It means a lot to come up with a great idea, drive good traffic and convert it to sales but you can’t do that without the right products, delivered at the right time, with a price the market is willing to pay.
Suppliers meant a whole lot when ecommerce was not around. Now – even more so. When it comes to ecommerce, suppliers can provide you with the right merchandise but they can also take the stocks burden off your shoulders. Amazon, for example, relies heavily on its marketplace partners to increase listed products number, without buying stocks for those products.
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This new case study challenges students to identify the optimal pricing strategy to maximize profitability for both a soda manufacturer and its exclusive distributor: a price strategy that will resolve excess capacity and inventory problems caused by higher-than-necessary retail prices. Crystallizing realistic pricing challenges faced by companies in many industries and markets, this case study offers exceptional value to both students and practitioners
Key take away: before starting an ecommerce operation make sure:
Post brick-and-mortar retail relies on electronic communication and product display. But when a product is bought it has to come from somewhere, right? Seal the deal with the suppliers and it’s off to the Warehouse, that magical place where online retailers pick products from the shelf, pack them neatly and prepare those products to be delivered.
Sounds simple? Well, usually, it is not. A decent store with its own warehouse operations has thousands of products at any time on its inventory, employs at least a couple of dozens of people to store products, pick and pack, and prepare for delivery. That’s why so many large companies choose to outsource their fulfillment operations to “third party logistics” suppliers such as Anchor 3PL or the ever-growing Fulfillment by Amazon so they can focus on what they do best (usually purchase the best assortment of merchandise, service customers and marketing).
Key Take Aways: A much larger post regarding 3PL/YPL (third party logistics) will soon be available on Netonomy.NET but until then, let’s have a look at things to consider when developing your own warehouse operations:
How is everything so far? A bit different than what you expected? Great. Keep reading and than start a new store with these ideas in mind.
Just as mentioned above your merchandise may be displayed and marketed online but it has to be packed and reach its destination in the real world. That’s why you need a good warehouse management and that’s why you need a great shipping service.
Shipping is usually an outsourced service. The best thing to do, unless you’re swimming in cash and you want to start competing the likes of FedEx and DHL, is employ one of the shipping providers and negotiate your way to a marketable shipping cost. Such a cost is likely to be, in the future, one you will be paying yourself – so pay attention.
Once you’ve contracted these shipping providers integrate their system with yours so you can streamline packaging and delivery.
Once in a while customers do not like what they’ve bought. You will need to handle the returns and reimburse customers for their purchase. Here you can team up with the shipping provider but your store has to handle all the communication.
Book details: In Shopper Intimacy, two world-renowned retail experts draw on unprecedented in-store research to illuminate how shoppers actually think, feel, and act in retail environments.
Key take aways:
Before we skip to the next component I just wanted to make sure you’ve noticed I haven’t yet mentioned anything you would expect would be ecommerce related or innovative. So far – it’s just plain ol’ supply chain management and logistics. Got it? Great. Let’s move on to …
Before even considering selling – you need to think about how are you going to treat your customer and keep him coming back. That’s where CRM comes in. While the term is usually used to describe a type of software, it is actually the term describing the whole policy on how are you going to handle interactions between you and your customer.
CRM needs to be “customer-centric”. Big words – but what do they mean? It just means that everything you do needs to be done “for the customer, by the retailer”. You need to understand the customer purchase patterns so you can recommend the most suited products. You need to record purchases, interests, preferred channels and basically all there is to it when it comes to understanding your customer.
Then act on that – after you’ve analyzed data make sure customer care, warehouse operations, shipping providers and even your purchase operations – all know who the customer is and what it wants.
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Key Take Aways:
Here’s one you surely expected, maybe not so down the list: your online store catalogue. Of course – this one is important. Without one we would be back to mail orders and inventing the wheel. However, as you’ve probably seen so far – it is just a small part of the whole ecommerce store business.
When it comes to it some things you really should be taking into account:
I know, i know – one includes the other. But for the sake of the argument let’s just assume that maybe loyalty programs online are so important that they should be a separate item to marketing. Because they are.
Loyalty is really hard to acquire these days. Especially when it comes to ecommerce. Most users will be searching for the lowest price and buy from whomever the seller is. But you can fight the trend with loyalty programs such as:
Good info on such subjects is hard to find but here is a book I recommend: Facebook Marketing: Leveraging Facebook’s Features for Your Marketing Campaigns.
As for marketing at large – there is an increasing number of marketing solutions you an use to market your products and store but not all are alike. Not all are as efficient. Focus on:
They may not look like much but together the “incredible four of ecommerce” can mean the difference between a failed startup and the next Amazon.
Last but not least …
What – you thought that brick and mortar is all gone? Of course not. Online retail is still at just 7% of total retail but growing fast. One of the things that’s helping it grow is showrooming. That is the practice of checking a product in-store and buying it (usually cheaper) – online.
Don’t think about ecommerce as online-vs-offline. Think in terms of customer. The customer wants to feel the product before it makes the purchase. So you’ll need to show it to him. Even a small offline showroom can work miracles for your online store.
So now you have it – online retail is a rather big iceberg. Most of it unseen. Check where others don’t look because that’s where you’ll find success in ecommerce.
Ecommerce is a complicated and highly competitive business. That’s why you need great tech. Shopify is one of the best companies out there in the market of ecommerce solutions for small to midsized online retailers. I suggest you give it a try.