E-Commerce

Online Retailers Must Add Value to the Customer - or Die Rob Snell , somewhere in sleepy, rural Mississippi - Jan 24, 2012

 

The first 10 years of the Internet was all about disintermediation (the removal of intermediaries in a supply chain). Removing steps between the maker of a product and the final consumer usually results in higher profits for manufacturers and lower costs for shoppers. Everybody wins, except the middle man, and in this story, that's you. If you're in between the maker of something and the buyer of something, you are at risk of being cut out.

I think we retailers add a lot of value to online shopping. My experience is that manufacturers are horrible at retail sales. The skills needed to research a market, invent a product, and then manufacture, distribute, promote, and support a product line are not the same skills needed to be a successful retailer.

You need to consider the value you add as an online merchant. Why should someone buy from you and not from the manufacturer and not from Amazon or another big box retailer?

The best online merchants I know are experts in their field -- reflected by their product mix, the merchandising of their website, and the helpful content in buyers' guides, expert reviews, and product FAQs. Let me illustrate the value ad we offer at Gun Dog Supply to show you how you might add value in your own niche.

Expertise

A lot of the value of doing business with us is reflected in our tag line: "We train our dogs with the products we sell." That product knowledge and expertise is reflected in the content on our Yahoo! Store in our buyers' guides, comprehensive product line reviews, individual comments on select products, and superior products singled out as "Steve's Picks."

Customer Service

Another value add for our customers is that real people answer the phone and are available during extended business hours for customers with product or order questions. We know the 3000 SKUs we stock. When someone has a question about something, a phone rep with a wireless headset can bop back into the warehouse and in less than a minute read you something off the box, or measure a specific part, or even take a picture of something and e-mail it to you.

Fast, Accurate Shipping

Our third big value add is that Steve and the hang in the warehouse ship stuff out fast. His staff has an error rate of less than 1%. The most important thing in online retail is to pick the right product, pack the box so it arrives in perfect condition, and ship the box to the correct address as fast as possible while communicating with the customer at each step in the process. This is much harder than it sounds, so many retailers struggle with this. Amazon is my favorite example of a company that does this right. I order something and it's here in a couple of days.

Questions to Think About

Do you add value with your awesome customer service? What's to keep a manufacturer from eliminating you from the equation entirely? What about other huge retailers? Why can't Amazon do a better job than you, if you're just passing orders to a distributor, the manufacturer, or other retailers?

Is your value added before and during the purchase? If not, why should Google send your store free organic search traffic? Does your site add anything special or are you populating your online store with a data feed of manufacturer-provided product descriptions?

There's so much competition on the Internet, adding value is a must, since added value is the only things that really differentiates us from thousands of other online stores. Be aggressive about finding ways to make shopping, decision-making, and problem handling easier for your customer and you'll succeed. Add value or die!

Rob Snell is long-time Yahoo! Store owner and developer of Snell Brothers. Rob blogs about Yahoo! Store, speaks at search conferences about Yahoo! Store, and is the author of Starting a Yahoo! Business for Dummies. Rob is also co-owner of Gun Dog Supply, an online retailer that sells dog training collars through a Yahoo! Store.