Small businesses often face a hard question when it comes to their website: Are you going to sell online? E-commerce, the process through which you complete a sales transaction online instead of in a location, can be a daunting, stressful decision for many small businesses – especially since there are many different ways a company can sell products and services over the Internet.
The first thing the owner of a small or medium business needs to decide is what type of volume they are planning to sell online, and if it is going to be the primary sales tool, an additional opportunity, or a method of attracting new customers. There are different reasons for having the capability of selling online. We’ll explore each type of online sales strategy and weigh the pros and cons of each.
Company A produces a very specific product, one that doesn’t really fit into multiple retail applications, and so Company A decides to simply sell it through an established online megastore. For example, Company A would create an eBay or Amazon store, and simply focus all of its energy on producing the product. Of course, in this situation, there is no marketing value for the product or brand; the company is hoping that people will search for the exact product or related keywords enough to drive sales. This type of sales structure does very little to build any brand recognition, and competition is based almost solely on product availability and pricing. If Company A is not the price leader, or is not creating a sufficiently unique product, selling online may be difficult.
Company B, on the other hand, is most concerned with its brand image. It has existed in the community for a number of years and wants the existing customer base to remain loyal. Company B wants a store to keep the existing client base returning for multiple products, and wants nothing to do with an Amazon/ eBay type of sale. Company B cannot compete on a national level for pricing, because its main focus is on customer service in a more personal setting. If you have a question regarding a product, Company B is the type of business a customer wants to call. Therefore, Company B would most likely set up its own e-commerce section on its current website, so that existing clients can shop easily without having to make a trip to a physical location. Even with plugins to push the product out to Google Product Search, chances are this type of store is not going to bring in a lot of new customers, but will certainly keep current customers coming back.
Lastly, we’ll consider Company C. Company C wants to sell its unique product to everyone. Company C is going to focus on building brand awareness and will most likely advertise its goods and services through multiple channels. This company will create an online store on its own webpage, similar to Company B, but will also set up a distribution network on sites like eBay and Amazon to help push out distressed merchandise at a lower profit margin to keep product flowing. With the structure Company C has put in place, it can effectively market individual products through AdWord campaigns while also building brand recognition. Company C is spending more money but has the best chance of capturing and retaining new customers.
There’s no right or wrong answer, and neither Company A, B, nor C is “doing it wrong”. Ultimately, they are selling more product than the company not selling online at all. The question you must ask of your own company before tackling e-commerce is, “which strategy might fit my brand and current approach the best?
