The Trend on Online Shopping Part 1

 

It was in the mid-1990s when online shopping caught the attention of the people.  When this started, it basically revolutionized the retail industry.  However, it is now facing a decline because of the birth of mobile shopping and other new technologies as well.  Here are some questions and the challenges that people experience with online shopping.  This was done by EcommerceBytes with a panel of experts.  Opportunities were also identified here.

There were a group of participants chosen by EcommerceBytes.  The mode of selection was based on the fact that these people are working hand in hand with retailers and these are not just retailers but small online resellers.  Their companies are involved in different services such as marketing, payment services, advertising, bookkeeping and product sourcing.  There were also participants that are from online marketplaces as well as a retail consultant.

The areas of expertise of these people show why they were specifically chosen and you can also see the variation in terms of nature of business.

CEO of admarketplace Jamie Hill was invited and nature of business is into pay-per-click ad platform.  Bill Harding of Bonanza was also invited and the nature of business goes to online marketplace.  Ben Milne, the founder of Dwolla, an online payment service was there too.  Others included in the list were Vice President Danielle Savin of FitForCommerce as Retail Consultant, Vice-President of Marketing Rob Caskey from Liquidation.com, an online marketplace, founder Brian J. Lawe of MyStoreCredit, a Marketing Service, CEO Steven Aldrich of Outright, a Bookkeeping service for online sellers and entrepreneurs, founder Chris Taylor of PageMage, an eBay marketing service and Director of Communications and New Business Development Palmer J. Pekarek of Ruby Lane, an Online marketplace specializing in antiques and collectibles.

Part One of this series goes to the challenges that online sellers experience in 2012.  Aside from that, ecommerce is looked into as well if it is more difficult now for small sellers in comparison to how it was 5 years ago.  Here are the views from the participants.

 

Jamie Hill, CEO, adMarketplace

Jamie Hill says that it is cost-effective when attracting new customers.  Now that the economy is moving up, customers should be moving up their expenses as well.  Furthermore, he adds that one of the challenges that a reseller may face now is being able to get those customers that are entering the market, far from the competition and now standing right in front of you.

 

Bill Harding, Founder, Bonanza

According to Bill Harding, he said that the challenges that retailers experience have some dependencies on the marketplace that he is targeting.  Furthermore, he states that those on eBay that are able to make decent margins despite having FVFs around 10% of the time is still a challenge this 2012.  Google is experiencing hit-and-miss scenarios with eBay items when doing a Google search of the products and this poses a concern from regular retailers including eBay’s working relationship with bigger brands and stores.  This could lead them to veer away from small auction resellers that helped them with their business before.

The Amazon sellers, on the other hand, get 15% FVFs and having the opportunity to establish their brands.  With Amazon, people basically think that they are just buying from Amazon instead of knowing that they are actually buying from a specific seller.  This may or may not give a positive result with a specific customer through buying of other products.

The small marketplaces as well as sellers that makes good in their website might experience some exposure and this could pose as a challenging event.  There are marketplaces especially those that launched last year have some expectations that collect buyers from their social networking sites.  The thing is, when you are already with the marketplace, it is the seller’s responsibility to make sure that he or she does some legwork and to sell as much as he or she can.  The last thing that you want to happen is spamming all your half a thousand friends whenever you post an item via email or via social networking.

 

Ben Milne, Founder, Dwolla

Ben Milne says that he is not a seller or at least he is not anymore.  He no longer does this kind of business for quite some time.  He further adds that he is obsessed in making new payment options for people and this will even help sellers save their money or be able to get funds in a shorter time plus the chance to avoid incurring any liability when getting credit cards.

He also adds that it is interesting enough to find out what will continue further in terms of the increasing numbers of sellers earning top money.  Different models like hyper product specialization such as www.bellybling.net  and flash deals become a regular thing as was seen last year.  Consumers started expecting when it comes to matters related to rates and instant gratification.  Because of this, it hurt a lot of retailers that have limited resources and could hardly afford to have Joe Bluejeans’ request to slash the price in half of a pair of Levis from $150 to $75.  It is interesting to take note of the Retailers’ reaction to this.

 

Danielle Savin, Vice President, FitForCommerce

According to Danielle Savin, mobile ready sites are now important and if the retailer does not have one, he or she will be left behind.  There is a big number in terms of people making purchases via their smartphones and tablets.  Out of all the online traffic, 15% of these came from mobile devices such as those mentioned.  This figure is more than double as compared to last year’s data.  In 2011, we saw a change in mobile commerce wherein sales and marketing campaigns have been generated from tablet users.

Eventually, people started looking for exclusivity in terms of advertising and Google was able to do something about this by developing tablet-specific marketing for the consumers.

Retailers have taken note that privacy is an issue when it comes to social networking sites such as Facebook.  Credit cards being hacked have also risen as well as email and SMS scams.

 

Rob Caskey, Vice President of Marketing, Liquidation.com

According to Rob Caskey, sellers have an issue when it comes to the continuity of goods being delivered.  The problem comes in when online sellers are unable to provide products to customers thus damaging their businesses which eventually cause customer dissatisfaction.

The function of liquidation.com is to make sure that online sellers have continuous flow of stocks since this company is in charge of coordinating directly with the largest retailers.  Returned products become available at auctions too.  Liquidation.com ultimately provides the products to online merchants.

 

Brian J. Lawe, Founder, MyStoreCredit

When the competition becomes big, more of these become dependent on product search engines to help them.  According to Occupy Wall Street, 99.99% of sellers as against 0.01% of search engines.  Factors affecting this includes reputation, price, structure and even content that is new.

 

Steven Aldrich, CEO, Outright

The challenges facing these online sellers have changed.  The first challenge includes information from 1099K forms in 2011 taxes.  How to deal with possible changes when it comes to sales tax compliance.  Last but not the least, finding ways on how you can balance between work and life as the demands of people increase along the way.

1099K forms from thousands of Ecommerce businesses will be receiving this with information about their 2011 gross online sales for that year.  This could create confusion on how they will it include in their taxes.  2011 taxes will be filed this 2012 and those businesses such as eBay, Etsy and Amazon will be required to report to the federal government about this.  The requirement of IRS is that payments should be made using credit cards.  Another way on how to deal with this is by reporting the payment card that processed more than $20,000 and more than 200 transactions until January 31 while February 28 is the date for the IRS.

This could be a small problem for small businesses because they need to find out on how they will be able to reconcile the gross sales amounts they will receive.  A solution is being sought at so that amounts will reconcile and at the same time, the merchant will be confident when it is time to report net sales data of their taxes.

This is also the year for online sellers wherein sales tax rules will become simple.  It is also possible that this year will also become complicated for them.  There is a debate in Capitol Hill about Marketplace Fairness Act and two groups are involved here but on opposite sides such as eBay and Amazon.  The cross-state sales tax rates should be simplified with a minimum revenue threshold of $500,000 when applying for new sales tax rates.  This means that small businesses could become exempted.  Small businesses will have to handle another regulatory burden if this is not going to happen at all.

Consumers also have high expectations from online sellers.  This in return further increases the burden on the owners of the business.  There are retail stores that operate traditionally by publishing their hours of operation.  With this, the business owners could set a schedule with customers.  Consumers further expect that ecommerce stores should be open 24×7 and this should be 365 days a year.  The expectation of the service should still be the same when it comes to small merchants as compared to the big ones.  Finding the right schedule is what online sellers need in order to identify the schedule that will work for them.  Once this happens, they will be able to support more customers and manage their businesses well while being able to spend time with family and friends.

 

Chris Taylor, Founder, PageMage

There are several key areas.  These key areas are the following:

Business

To increase your profit, you need to manage your expenses such as shipping costs, fees, inventory costs as well as other possible expenses in order to increase your chances of getting a profit.  It is also important that tax laws should be understood.  There is also a need to manage the aspect of selling, average selling price, conversion rate and sales velocity.  If you know these numbers, you will be able to manage your business well.

Marketing

To get to the forefront of your target audience, you need to have awareness that is driven through search, general marketing, SEO and social media.  You also need to understand your competition in order for you to come up with the right products and the right prices.  You also need to brand your products because having big brands will help widen your scope in terms of visibility online.  Different sellers should be in the proper places in order to relay the brand that will connect to your target audience while helping increase the sale.

Knowledge

People have more choices and as the online world evolve as well, people need things more and more.  You need to have a clear understanding of what is happening.  Focus on the changes that you need to be aware of and address these matters right away.

Planning

There is a written guide called “Grow your eBay Business with SWOT –Strengths, Weaknesses, Opportunities and Threats.  This is simply a process wherein  sellers will be given all the help that they need in their businesses and check on possible help which will assist them in growing their businesses.

 

Palmer J. Pekarek, Ruby Lane Director of Communications and New Business Development

Reach new markets such as the European and South American markets.  Reach a younger market for vintage and collectibles.  Learn the curve for online sellers with the latest possible technologies that the market could offer.

Was eCommerce for small sellers more difficult now than it was five years ago?

 

Jamie Hill, CEO, admarketplace

According to Jamie, this would not be the case for those sellers that offer valuable and unique products but if the seller does a copy and paste format in terms of selling, this would not work at all.  This strategy will only work for a short period of time.

 

Bill Harding, Founder, Bonanza

According to Bill, there are more viable ways now on how online sellers could do their business as compared to how it was five years ago.  It is all in the mindset of the online seller if they will perceive this as more difficult now or if it is more exciting.  Most small sellers have options such as getting into Marketplaces like Bonanza that will help them become “seller-friendly”.

Google Product search has been effective for online sellers.  They are given the exposure that they need such as page views and sales.  This helps them a lot even if they do not like to be a part of the largest and most expensive marketplaces available.  If for example five years ago and you were not part of eBay or Amazon, you couldn’t possibly be making sales then.  The power of GPS is the power given to the people.

 

Ben Milne, Founder, Dwolla

Ben Milne has been out of the industry for a while and this was mentioned earlier.  His answer to the question is no.  The answer could become a yes if it involves utilization of newer models for business such as Gilt, Fab and Living Social.  Despite all these, there are still a lot of amazing options out there that will help a lot of people and small sellers.  Online resources such as Shopify, Stripe and Goodsie make online shopping very easy to a lot of people.  It isn’t costly too because people now have options.

 

Danielle Savin, Vice President, FitForCommerce

Danielle says that It is not only an opportunity but it is also a challenge to small sellers.  The challenge that small sellers face involves the giants such as Walmart, Zappos and Amazon.  This is where consumers can do one stop shopping while the retailers are able to invest with their money with technology while keeping up with the needs of the customers by meeting halfway with their expectations.

However, small sellers could actually create a unique voice for themselves in this market through social and content.  A lot of clients update their sites mixing it with social and content inside their ecommerce sites.  This basically sets them apart from big retailers.

 

Rob Caskey, Vice President of Marketing, Liquidation.com

According to Rob Caskey, ecommerce is very easy for a lot of small retailers than it was five years ago.  Now, online sellers can have tools that a couple of years ago these were not available.  These tools help them drive traffic, do shopping cart processing and even channel allocation.  It is also evident lately that a lot of these small sellers are now into eBay and other possible venues to market their products directly with consumers.

 

Brian J. Lawe, Founder, MyStoreCredit

Brian mentions that whether it is large or small, ecommerce is more sophisticated now than it was five years ago.  It is no longer necessary for you to take a few photos and pop a list on eBay while getting a notice that the item was sold within seven days for a reasonable price.  What sellers need now is to make its products competitive by buying items as inexpensive as they could.  Selling the products on different avenues or channels but without the expensive price tag is also another item that sellers experience now.  It is also important that sellers should have a back-end shipping system in order for the products to reach the customer in two or three days time. It’s a steep road ahead while the seller is on his or her learning curve and if you do this business by doing some trial and error, you can expect that your reputation as a seller is at stake and you will lose a lot of potential sales.

International sales is an area that sellers might want to focus on and expand the business.  The international market serves as a strong opportunity for the products to be sold.

 

Steven Aldrich, CEO, Outright

According to Steven, small sellers now have a better life in business than it was five years ago.  There are plenty of online marketplaces and having a third party seller to compete is a welcome race in this world of business.  People also, on the other hand, are getting more and more comfortable making their purchases with these third party providers.  Amazon is one good example wherein third party providers have experienced 44% increase in revenues during the holiday season.  With the available technology, small sellers are in fact getting to be more efficient.  Amazon has a Fulfillment group that performs the orders for small sellers.  Outright is an example of a provider that will help these small sellers track and even manage their business more efficiently002E

 

Chris Taylor, Founder, PageMage

Small sellers are better now than five years ago.  There are more tools, more marketplaces for them to sell their products.  What you really need is understanding what is right for your business.  You could also need to focus on the right things to succeed.

 

Palmer J. Pekarek, Director of Communications and New Business Development, Ruby Lane

According to Palmer, it is easier now than it was five years ago.  There are more opportunities now to sell than it was 5 years ago.  There are lots of venues for selling and just by creating your own site, you will be able to do online commerce.

Written by

Dani Avitz has wide experience in E-Commerce (both the practical and academic aspects), by outlining a long-term sales strategies. Knowledgeable in SEO, SMO, PPC, Affiliate and Marketplaces such as eBay, Amazon, Etc.

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