Starting a business to sell products or ideas online is an appealing idea for a number of individuals. However, while it may be easy to get such a business off the ground, it can be much more difficult to keep it going, especially in today’s difficult economic climate. Here are four of the most common mistakes frequently made by businesses when selling online that should be avoided to ensure both short and long term success.
1. Selling with prices that are too low
The first and most significant mistake often made by companies interested in selling online is to underprice their products. Online customers typically look at prices and reviews as a method of comparing similar products and companies. If one company prices its products too low, and forgets to take into account fees such as those for shipping or listing fees applicable to a number of vendors, such as Amazon or eBay, then it is easy for the company to end up making barely any profit on its products. In some cases, after accounting for the various fees and the actual cost of the product being sold, a company can actually end up losing money with each sale. The only real solution is to raise prices.
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2. Selling with incorrect descriptions or products
Another common mistake is to make listings with incorrect or overly sparse product descriptions. To avoid confusion in sales, considering the massive numbers of products sold over the web, marketplaces will typically require a seller to supply a UPC, ISBN, or similar number to identify and distinguish the unique product being sold. The number is a quick and easy way to group together multiple companies that are selling a single product. However, if a company does not make sure the right code is used when identifying a product, this can lead to large unforeseen problems in the sales of the product and in the reputation of the company.
3. Not properly managing one’s inventory
Inventory is another area where it is easy to make a large number of mistakes, especially when retailers are selling their products through a variety of channels, such as marketplaces or web vendors. The problem here typically occurs if a manager or marketer does not send enough inventory to one sales channel or when the update system for tracking the inventory cannot be updated, either in real time or in near real time. For example, if there is a product being sold in three locations by one company, and six products are available in total, but seven orders are placed before the company becomes aware that the number of orders had reached the number of products available, then there will be a customer who will not receive the product she was looking for. As a result, the customer might easily decide never to visit that location again, which could lead to the location cancelling its business agreement with the company in question. The best solution here is to have a certain amount of inventory distributed ahead of time to each sale location. This way, it will be easy to reallocate a product from one location to the next. Of course, the inventory update system needs to be very fast.
4. Missing marketing opportunities
Finally, keep track of any potential marketing opportunities. Customers tend to be habitual buyers, so if one can get a customer to come back after an initial purchase, that customer, statistics have shown, will tend to spend at least three times as much as she did the first time she made a purchase. As a result, consider postcards, handwritten notes, or other ways to stand out as a company.