I live in a small town, about 7000-8000 residents, and the nearest "big" city is about 20 miles away. The economy in town is thriving, despite the national economy struggling, because it is usually cheaper to shop in town than to drive an hour, in traffic, to shop in the "big" cities. Stores around here include gift shops, clothing stores, a thrift store, a bookstore, drug stores, dollar stores, a game and a movie store, then the staples like Walmart, Lowe's, and a couple grocery stores. There are also many privately owned restaurants and a few corporate and franchise restaurants like Ruby Tuesday. There really isn't much need to go to the mall in the nearest cities, since it can all be found here. This is the way the economy runs the real brick and mortar world. Buy close, buy in bulk, and stay home.
But, in the ecommerce world, businesses are struggling. One would think that it is cheaper to shop online than drive to buy what you want, but that isn't always the case. There are shipping charges, cost of living and operating increases, and supplier increases. Only a few online retailers can have the same buying power as a national chain with hundreds, or thousands of stores. Surveys have shown that over 70% of all e-tailers use a second party to dropship some or all of their products (including retail companies like Circuit City, Best Buy, and KMart) leaving their online businesses at the mercy of supplier charges. The supplier has no incentive to give these 70% any discounts, since every order is processed individually by them. Therefore a moderately successful seller can dropship the same products and get the cost close enough, that with lower overhead, can match the pricing. This is where customer service pays off in the world of ecommerce.
If the suppliers are willing to dropship for any business, there can't possibly be much difference in price among the many e-tailers. In fact, I used the same distributor that Circuit City and KMart use for media products, but I never came near 1% of their sales. The difference between my business and theirs is their reputation of customer service. These are branded companies, I was not. Sure, I had a following on eBay, but they had decades of customer service I could not match. What I had to do is stop competing with everyone else, and just make myself stand out. Here is how I did it:
How can any business succeed against established corporations who sell mass catalog dropshipped products online?
1. Offer terrific service. No corporate online business can beat one on one personalized service. They hardly send real emails to customers, so if you do, you have an edge. This won't win all their business, but it will draw a few away who want that personal touch.
2. Stop competing. Don't sell the exact same products at the exact same prices. They will always win in this economic slump due to their name recognition. I sell the exact same movies as Amazon and Best Buy's sites, and a lot of mine probably cost more. What I offer is a better shopping experience with quick email responses, and quick resolutions to problems if they come up.
3. Sell your servic-ers, not your servic-es. When is the last time you saw a profile of the person shipping packages for Best Buy's website? Let customers know who is handling their order, pictures, short biography, experience, etc, and you will gain trust immediately.
4. Take a few hours each week, and visit customer profiles. For instance, if one customer buys quite a few Sean Connery movies, I would customize a packing slip to print for each order just for them. When I make the order, I let them know that they will receive 20% off their next Sean Connery movie, and tell them the discount will show up the next time they login. Then, thank them by name, and save it for their almost certain next order. Or, if I have a very loyal customer, I may just throw in a freebie I think they may like... I have done this for years, and it never fails to make some new friends when the customer opens a package and finds something free.
5. Finally, instead of just printing a packing slip and stuffing it inside the package, try a little personal touch. Try writing on every one:
"Thank you XXXXX for shopping at House Of Blu.
Owner, House Of Blu - We Are Blu-Ray"
Boy, wouldn't that just tickle a customer to read a personal message handwritten from the owner of the business they just gave their money to?
Those are just a few tips for competing in a global, corporate dominated world of ecommerce. That's it for today!