At the eTail Alliance you will often hearing us preach about the importance of research, market, customer and competitor research.
One subset of this is to understand the market dynamics of your industry.
If there is one area where we see independent ecommerce merchants struggle to compete and that is on purely buying power.
Being able to procure competitively is one of the most important factors to online success. This is often overlooked by new and smaller ecommerce operations.
Think about it. Large retailers can use their leverage to dominate huge swathes of their market.
The cheaper they can procure their products, the more that they can allocate to marketing, brand building, customer retention, rewarding affiliates, new technology – the list goes on and on.
You need to understand the dynamics of your specific market in order to compete effectively. Chances are you can’t compete with your larger competitors on pure buying power, but that doesn’t mean curtains for you. In order to compete, once you know your competitor, you can refine your strategy.
There are different options open to smaller online retailers.
Free shipping is one of the most hotly contested subjects in the eCommerce world, some claim that free shipping is the way to go, that it is a massive driver of conversion and sales, others would rather have a lower upfront price but a decent shipping charge to cover the loss in margin.
Unlike the offline world the cost of shipping is usually taken into account by the shopper in the combined cost of the product. In the offline world, how many shoppers will take into account the cost of their fuel, their time, their parking cost etc when weighing up the cost of a purchase? Not many, that’s for sure.
The most graphic illustration of the power of shipping charges can be seen on the marketplaces like Amazon and eBay. On Amazon, marketplace sellers are ranked on their combined price, that is the combined total of the product price and the shipping price. When there is a single product purchase a higher price with free shipping can be an advantage, anything free, as has been shown in many studies, will outperform any other type of offer, we are just suckers for anything free and that includes shipping. However if you want to buy multiple items, a shipping cost that has a base price and a small increment for each additional item will appeal to the more savvy internet shopper.
Recently we have been doing a lot of work on goal setting.
For those who don’t set goals, goal setting is one of the major triggers for success.
Watching the olympics over the last few days got me thinking, thinking about the story behind every gold medal.
You see, every successful gold medal has been preceeded by years of hard work, focus and dedication, towards a singular goal that was set four or more years in the past.
It is this singular vision and hard work towards a single goal that results in gold medals.
Without the goal and the focused effort it becomes too easy for us to get sidetracked and stray off our chosen path, this leads to poor productivity and stunted results.
So what are your goals? Do you have one major goal for your business that you are striving for? If not, you need to set one.
Start with a 7 year plan,
One of the breakthrough tactics that I have learnt over the last 12 months is to focus my time on the right things.
All eCommerce site owners are busy, often very busy, but are you busy doing the “right things”?
Everyone knows the pareto principle, that 20% of the input accounts for 20% of the output. This is true for many things, especially when running a business.
It is too easy to spend the majority of your time on the 80% of tasks that only account for 20% of your results.
This approach will almost certainly stunt the growth of your business and have a serious affect on your personal wealth.
The right things will
Using video to sell products is well documented, though many ecommerce sites still don’t use video on their sites to sell products.
Video is especially useful when selling complex products that need a lot of explanation or where there is a wide choice and customers need help selecting the right product.
You don’t have to look much further than the mainstream success of television and youtube to understand why video is so effective.
The web is turning into a visual medium, television and the web is converging, heck I have seen more of the olympics this year on the web, than I have sat in front of my television.
Having useful video on your site is the first step, the second step that many miss is distributing your video content to the places where your customers hang out.
Places such as
From the eTail Alliance eCommerce survey, we know that as many as 50% of independent eCommerce sites don’t use Google adwords at all.
The reasons for this are varied, but the most common issues are:
As we have discussed in other posts, the way to win at Adwords is to convert a lot of the traffic from PPC, which will enable you to buy more clicks and get a higher position, this is a virtuous circle, most companies get caught in a negative PPC spiral and end up giving up on it very quickly.
The guys over at Word Stream have dug up some interesting data showing the importance of PPC (well they would they sell PPC management software, wouldn’t they?) – but interestingly it highlights the importance of PPC on search phrases with high commercial intent.
One of the key tools that many e-Commerce webmasters rely on, Google Website Optimizer, is being retired.
It has been a core tool for anyone serious about split testing changes on their website.
Whilst it is rather clunky and not exactly what we would call ‘elegant’ it did the job pretty well, plus it was free.
Whilst website optimizer is getting retired, new functionality is