How eCommerce Retailers Stay Ahead of the Competition
How can you capitalize on the incredible growth in the ecommerce market?
The key areas to focus on for your ecommerce business are: marketing, pricing, fulfillment and service. These four factors are key to expanding your ecommerce business.
Marketing Your eCommerce Business
Marketing is a big part of any online business. The concepts of on-line marketing aren’t really that different from traditional marketing, other than there are a wide range of new tools and technology available to make marketing much easier. Marketing is still about three things.
1. Knowing the value of the product or service you offer and differentiating that from your competitors.
2. Finding an audience or market segment that is interested in your message.
3. Promoting your product or service to that audience at a price that makes sense
In today’s World, finding your audience and promoting your product or service has never been easier. Twitter, Facebook, Blogging, Google Adwords and Google Search Engine Marketing are tools that most business owners are comfortable with and can easily leverage their huge potential to get their message out. Those uncomfortable with the technology can work with an SEO or Social Media Consultant to them put together an on-line marketing strategy.
Pricing Your Products and Services
Pricing products and services on-line is requires a little more strategy than traditional pricing strategies. On-line it’s easy for customers to look up multiple competitors and do a fair bit of pricing research before buying. Here are some things to consider in your on-line pricing strategy.
Do some research! It’s not hard to find out what your competitors are charging. You absolutely need to use this as a benchmark for your pricing. While there may be many reasons for you to charge a higher or lower price than your competitors, you still need to know what you’re up against.
Know Your Margins
You need to know what your costs are pretty accurately. For any pricing strategy to be successful, you have to know whether it will generate enough margins to keep you in business.
Consider “Value Based Pricing”
Value based pricing is an interesting concept and should not be ignored. Let’s say you’ve invented a tire that lasts twice as long as the tires currently available today. It doesn’t cost any more to produce, so should you charge the same price as other tires on the market? Of course not, value based pricing says that you could charge almost double to the current price of tires. This is how pricing based on value works.
Many people practice cost plus pricing. They know for their business to survive they need to make, let’s say, a 30% margin. Pricing using this strategy is pretty simple. Just mark up every item to make a 30% margin. However, this is not ideal. You may be losing business where the volume and cost to service would justify a lower pricing and you may end up with business with low volume and high cost to service. Be careful applying this one.
Consider using anchor pricing. We’ve all seen it, but it works. This is where the first price a customer sees is very high let’s say $100. Then after a few clicks on your website, “Today only, one low price of $49.99”, even though you intended to sell it for $49.99 in the first place! The concept of anchor pricing works because the buyer perceives a higher value than the actual price.
People often like to compare. Don’t give people an incentive to go and compare your price with someone else! Give them easy to understand option on your site. For example: Platinum = $100, Gold= $75 and Silver = $50. Then you can even highlight the gold package as “best value” knowing that that’s the one you want to sell. Contextual pricing works because it gives your buyers the option of choice.
eCommerce Fulfillment is Key to Growing Your Business
Once you have one the order online, then next step is ecommerce fulfillment. You need to be able to deliver the right order, quickly and economically. This is where an eCommerce Fulfillment provider comes in. Best practice is to outsource eCommerce Fulfillment to an expert. Some of the key things to look for in an eCommerce Fulfillment House are:
· Expertise and past history of successful ecommerce fulfillment
· On-line order tracking
· The ability to process rebates and returns
· Logistics and shipping expertise that you can leverage
· Knowledge and expertise in how to fulfill your orders economically and come up with win/win promotions that reduce fulfillment costs and increase sales.
After Sale Service
Your customers are going to want to know if the items they ordered are in stock, when they will ship, when they did ship, where they are in-transit and when will they be delivered. They will also like an easy returns policy if an item is defective.
All these services are typical of what an ecommerce fulfillment house can do for you. Typically, you want to make sure you’re ecommerce fulfillment partner has an online tracking and inventory system as well as, a way to integrate their data into your information system.
Dare Marketing is a premier ecommerce fulfillment house with years of experience fulfilling on-line orders. Dare can help you bring it all together. Your marketing, fulfillment and logistics all under one roof! For a free consultation with a fulfillment expert, contact Dare today and we’ll give you our opinion of your current ecommerce fulfillment strategy and recommend some economical ways to improve your fulfillment system while reducing costs.