3 Things to Know Before Getting into Ecommerce
You might think that since most of the hard stuff is complete — initial funding, cash flow and inventory management— that you are prepared to open up an online retail business. There might even be some semblance of a budding marketing plan to drive traffic to your neck of the World Wide Web. While ecommerce is a great industry to get into with huge growth across the country (the United States Census reported a 14.6 percent increase in overall ecommerce sales from 2014 to 2015), and world (2015 worldwide sales totaled $1.55 trillion and expected to grow to 3.4 trillion by 2019), there are some things that you might not be prepared for before you launch your new online business.
Customers Aren’t Always Nice
Working in the retail industry is difficult — whether it’s in-store or online there will always be someone out to get something for cheaper than what you’re offering.
For example, sometimes as an online retailer, you will have clearance products that will sell at discounted prices. This is a great way to clear out inventory as well as make your customers happy. However, imagine that someone bought one such clearance item from your store, and upon shipping, it was determined that the item was not fit for sale. You check around other similar retailers or manufacturers, but everyone of this item is sold out and gone. This is the nature of clearance.
If you do not have a healthy customer service plan to deal with the backlash caused by not being able to provide your customers with the products that they have paid for, you might be in trouble.
Many of the best ecommerce site builders, like Shopify, will have customer management services built-in to their platform, which makes dealing with difficult customers, returns or exchanges a breeze.
Carrier Services Sometimes Lose Packages
According to their website, UPS delivers 18.3 million packages and documents a day. Now, they are the number one delivery service in the United States, but 18 million packages and documents is a lot of stuff – it would be crazy to think that none of those items were ever misplaced.
If you want to run an entirely internet-based ecommerce store, you are going to experience these lost parcels, and you should have a contingency plan for it — or else people are going to get mad.
The best way to be prepared for this is to consider all aspects of the shipping process. It takes a long time from the purchased item to go from your warehouse to the customer. The item has to travel through various vendors, shipping providers and technologies, whether you know about it or not.
While FedEx and UPS may be the biggest names in shipping, they may not be the most affordable. Drop shippers and other third-party logistics can help keep your shipping costs low. Drop shipping is when a retailer sends a customer order to a manufacturer that then ships the product out from their warehouse. This is a particularly attractive option for many ecommerce businesses that want to boost sales, while not needing to increase the amount of space needed for their own inventory.
Of all the things you will need to know, this one may or may not be the most surprising depending on how much faith you hold in the average consumer’s ability to pay attention. You will need to be crystal clear on all labelling of products, offers, and policies. Many, if not all of your customers, will skim over the material and misunderstand what you mean.
For example, let’s say you are a small business that sells designer hats, and you want to run a contest that will showcase all the cool places people have worn your brand. You have your prize, you have your submission forms – next, you need to have blatant and explicit verbiage explaining that the contestant must be wearing your particular brand in order to be eligible for the prize. Otherwise, you are likely to sift through a veritable mountain of disqualifying submissions.
You are going to learn a lot when you open up an online business, so be sure to prepare yourself as best as you can!
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4 Responses to “3 Things to Know Before Getting into Ecommerce”
Awesome post, Mark. But it’s funny how we all lament that “customers aren’t nice”, and yet we are customers ourselves and we don’t stop to reflect and think about people who provide us with services and products.
Having said that, it’s true that customers can be really nasty. For service businesses like ours, it’s even worse. It’s so bad that I am seriously thinking of fundamentally change the way we do business. I am just not sure if I can ever pull that off.
Having a customer support process and other processes really helps. Yes, technology really helps too. Still, I think that it’s more about a strategic outlook that’s needed.
My site rangoutlet.com is bases on Big commerce platform. i like your review on shopify. I never used shopify before. is it good idea to move it from BigCommerce platform to Shopify? Please let me know. thanks.
Customer satisfaction is the important thing while getting into e-commerce. Thank you for sharing such an awesome information.
You are absolutely right. The worse nightmare will be because of lost packages. So it is recommended to use Drop shipping for initial days.