If you have a range of goods that you ‘could’ sell online, list your most popular lines, then begin by selling the top 5. This will give you the chance to settle into online selling without having to juggle too many product lines - you can add a few more each week as you get more comfortable with the process.
Where are you going to store your stock and how much space will you need? Warehouse space depends, not only on how much stock you have, but how quickly it is moving off the shelves. You will need a clean dry space which is accessible quickly and fitted with shelving for your stock. You should allocate a unique code for each product line and mark the shelves in such a way that you can find out what your customer has ordered. Even if you know all of your items, what happens if you fall ill with a bad dose of flu or have a family emergency? You can’t just close your web shop for a week, so that means that your dad/mum/girlfriend/mate is going to have to pick your orders in your absence. Are they as familiar with your systems and stock as you are? Codes keep the chaos at bay.
Packing orders will be a pain if you’re not organised. You can save time and increase customer satisfaction by investing in a basic stock of materials:
Scales – make sure your set is accurate
Corrugated boxes - including a small range of sizes
Tape guns or dispensers
Bubble wrap and some polypropylene lightweight mail packs
Padded bags and some blank white self-adhesive labels
Your customer doesn’t want to receive a parcel that looks like it was wrapped by a chimpanzee and is far more likely to order from you again if you send their order carefully packed in a professional manner. If packaging is damaged in a shop, you’d ask for another product. You don’t want your customer feeling disappointed about receiving an order they were really excited about.
How do you plan to charge for shipping? Delivery charges may depend on the value of the item. If your product has a value of more than £50, you may be able to offer free shipping (unless the item is a garden shed weighing 250Kg). On the other hand, if your product sells for £2.99 and weighs 550g, the postage costs would be around £2.50.
The point is that, unless you are going to make a massive margin on the 49p left over from the above, you need to do your homework first. Get a handle on shipping costs before you set your product prices, or make postage an additional cost of ordering the item. How you do this, might depend on your product value and what your competitors are doing.
What value are your products? If the item cost is less than the shipping cost, you’re not going to attract many orders, unless your item is unique and not available anywhere else – in which case increase the cost of the item!
There is something psychologically off-putting about the cost of the postage being more than that of the item, e.g. Item cost = £1.99 and postage = £4.00. In this case the total cost = £5.99. Depending on the market (see Tip 6) you might be better either advertising the item at £4.00 and the postage at £1.99. Or if you have standard postage costs, increasing the cost of the item as far as the market will allow.
Enthusiasm for your unique product range is a positive thing. However, it is also possible that other people are similarly excited about their unique product ranges which happen to be similar to yours. Competitive advantage is extremely relevant to your online business. You’d be surprised how many people don’t search around to see who else is selling similar products, at what price/shipping costs and with what returns policies.
Again, it depends on the value/size/weight of your item, but you’ll need to consider whether you should ship products on a “tracked” service – this means that you can follow parcels through the delivery system until they are delivered to the customer. Tracked delivery services are more expensive than the basic service, but there is much less chance of the item going astray. One unhappy customer can outweigh many happy shoppers and not all customers are born equal. Whilst the majority of citizens are law abiding, there are always one or two who are happy to spin a bit of a yarn in order to get a free order. It’s worth remembering:
You need to publish your returns policy. There is a raft of statutory regulation covering online sales and protection of consumers rights. You need to read this before you write your policy on returns and make sure you are compliant.
You then need to look what your competitors are doing, decide your standpoint and know why. If there is a situation in which people love to complain, it’s when they are disappointed with a product, for whatever reason. You and all the people who come into contact with your customers need to be clear on what your policy is and have a reasonable explanation. (See it’s worth remembering)
Decide what time you need to leave for the Post Office/parcel collection point. You need to make your order cut off time on your website clear for orders you offer to ship the same day. Make sure that you also research the opening and closing times of your shippers, otherwise you may get to the Post Office with your arms full of packages, only to discover that they close at 1 pm on Wednesdays!
It is crucial that you always know exactly how many of each item you have available for sale. Whether you create a sophisticated spread sheet or a sheet of A4 paper with a list of your products and quantity, controlling your stock levels is very important. It’s no good having 300 units of a slow selling item and only 15 of your fastest seller – this goes back to Tip 1.
You’ll need to learn from your orders and adjust your online ordering systems in order to balance your stock levels against your sales levels. Otherwise, you’ll have money tied up needlessly in slow moving stock when it should be invested in your most popular lines. If you have slow movers, discount! Get rid of them! Stock takes up space and space costs money or at least has a limit.
Fill your space with products that sell quickly and make you money.
Employ high standards of quality and delivery to increase repeat business.
The other option is don’t do it yourself. The third party or outsourced order fulfilment approach cannot only prove to be more cost effective, but also releases your time to develop your business and products. Contact us if you wish to discuss this option.
If you’re a starting-up, you’ll be getting used to the idea that you have to do everything yourself; accounts, buying, selling, marketing. You name it, you do it.
Whether you are just starting to think about supplying your products online or have been doing it for a while, our Top Ten Tips for DIY order fulfilment will help you to get a better grasp of selling online, avoid the pitfalls and increase your customer satisfaction (and ultimately your profits).
DMC Distribution Ltd
SK22 4NQ, UK
T: +44 (0)1663 741879