The Digital Business Kit for Retailers
Retailers will understand the different technology and strategies that can assist their retail businesses to begin or improve selling their products and/or services online. [printfriendly]
Retail products are goods that have a tangible, defined design and are typically available for one-time purchases. Products may be physical goods or electronic “virtual” goods. A physical example is a hard copy book that needs to be shipped. An electronic example would be an eBook that needs to be downloaded directly from your website.
When discussing how to retail products online, it is useful to distinguish between physical and electronic products. The considerations of how products will be sold online vary significantly from one product type to another and should be taken into account when initiating online sales of current inventory or choosing a new retail product to sell online.
Physical retail products
The products you currently retail are “physical” if they are tangible as opposed to electronic form or format (see below).
Typically your organisation will have inventory of physical stock in your store or shipping warehouse. Example: Clothing, sporting equipment, hardware, vehicles, etc.
Electronic retail products
Electronic products can include anything that can be downloaded or emailed to the buyer. This can include music, eBooks, software, documents and reports, videos, and more.
The benefits of eProducts include:
- Immediate product access for buyers.
- No shipping expense for sellers.
- Automated sale opportunity is also described as “turn-key”, which means that once the product is loaded for online delivery, buyers can view, purchase and download the product without the seller having to do any work. Take for example downloading music or apps, the customer will pay for the product and is sent an access code for the product. Emails are sent to all parties to confirm the transaction, and funds are transferred from the buyer’s credit card to the seller’s account. Many marketplaces exist for electronic products and are often based on product type.
Popular examples include: iTunes, CDBaby (music), Capterra (Software), Amazon (ebooks) etc. See more on the market channels section of the resource page.
Sell your current inventory online
Here are a few considerations when planning to sell your current stock online:
- Inventory: Consider how Selling Online will increase the volume of orders, and ensure that current inventory volume and process support this. Also, how will online sales be communicated to the inventory location/warehouse and shipper? As the volume of sales increases, integrating inventory management with your online sales system can provide an excellent return on investment.
- Shipping: You will need to ship products to customers. If you do not have this process already in your organisation, research should be done to find the best shipping solutions for your product. Product size should also be considered, as shipping for large products can make it hard to compete with local product providers. Similarly low cost items may be less expensive than the actual shipping fee, which is a drawback for trying to sell online. *Note: a drop-shipping strategy removes the need for both inventory storage and shipping.
- Lack of physical contact with products for consumers: Some products rely more upon the customers’ tangible experience, such as trying on clothes for fit or the “feel” of a bike. The website and online-sales store should be created to provide an equivalent “virtual” experience by providing photos, videos, sizing charts and a good return policy. This can also reduce the effects of “showrooming,” whereby customers go to a local store to try a product and then buy it online elsewhere at discount.
Want to source new product to sell online?
Here are a few considerations when researching new products to sell online:
- Product choice: There are numerous considerations to take into account when choosing what type of product to sell online, as well as the business model you want to adopt. You may choose to add products to your retail inventory that are only available online especially if these are drop-shipped products (see below) add value to your product portfolio, address specific target markets and attract people to your website with “online specials”. Check out our Selling Online resources on methods of how to choose products.
- Drop-shipping: As defined in Entrepreneur.com: “An arrangement between a business and the manufacturer or distributor of a product that the business wishes to sell, in which the manufacturer or distributor and not the business ships the product to the business’s customers.” Drop shipping can provide a “turn-key” business that makes money with reduced effort; however, finding the right product and getting customers to see and buy it can take a lot of invested time and energy.
- Affiliate sales: Affiliate simply means an agent for that product. You enroll as an affiliate and you promote or sell the product of the site or company that you enrolled in. You will be given a link that you will use for the promotion of the product. Every time someone clicks and buys from the affiliate-link you are promoting, you get a commission for that product that you sold.
- Niche products: This past year has seen a rapid growth in the success of “niche” products competing and thriving online. While a niche product may fight for shelf space at a brick and mortar location, there is no limit to the space on the “shelves” of the internet. Focused and specific lifestyle products as well as narrow product lines sell quite well online.