Shopster's Dropshippers, eCommerce, and Selling Online Blog

Holiday Selling Online, 2008-Style

Using multi-channel selling for maximum results

Lori Stewart, VP Product Management & Marketing, Shopster

This holiday selling season may present more challenges than in the past few years but the good news is online sales are still forecasted by Forrester Research to grow by 12% this holiday season.   This means there is an even greater opportunity for savvy sellers and those who are willing to take time and effort to drive traffic to their stores.

Selling in a single market place, or sales channel, has worked in the past but there are so many sales channels available today that buyers are doing more research and making more informed choices before hitting that all-important “buy” button.   Think of it like a small town where there used to be only a single source for goods – a country store that stocked a little of everything – and then that town grew rapidly and attracted big box stores, some specialty stores and boutiques and convenience stores.   All can survive and thrive in a growing and evolving economy but sellers must make every effort and use every marketing tool available to attract customers and elevate themselves above their competition.

Shopster provides numerous sales channels for retailers and tools within those channels to enable motivated retailers to effectively market their products to a broad spectrum of buyers.

Selling from your own Store –

Shopster is a great place to build an online store and load products to sell in very short order.   Easy to use storefront tools and access to over 1 million products from a trusted network of suppliers, make getting your own store up and running something you can do in an afternoon or even after you get home from work one evening.   Then you are free to do the critical part of selecting the right products to sell and marketing them to your new, potential customers.  The best part is that in these uncertain economic times you do not have to actually hold or own the inventory … Shopster and their supplier network take on that risk. 

Market your Store in the Big World -

It is impossible to be successful selling online without putting in a good amount of time and effort.  To assist with that there are a number of tools available to help you market your store and drive traffic back to your store. 

Be sure to:

• create a sitemap and export it to Google so your store gets indexed and can drive natural search traffic to your store
• add meta-tags to your page headers and write “content sensitive” product descriptions (change the standard supplier descriptions to be more powerful)
• create product datafeeds and send them to 3rd party comparison shopping sites
• build email lists of your previous customers and market directly to them
• create a newsletter and send it to customers and potential customers
• add your store URL to your email signature so people can easily access your store
• talk about your store on your blog and share content with other bloggers to get your “brand” out there

Shopster can help you with most of these things!

Selling on eBay - 

eBay is certainly a good place to sell goods and to gain traffic to your store.   In 2006, eBay represented 25% of the ecommerce sales.  Today that number has decreased and eBay’s growth continues to track lower than the overall trend of ecommerce sales.  This means there is now a growing opportunity in selling “off-eBay” but ... eBay remains a great selling channel and it should be a part of your online channel strategy. 

Shopster provides access to sell on eBay with easy-to-use templates or a datafeed to eBay’s Turbolister tool.   Be aware that eBay has many new rules, policies and regulations around maximum shipping prices in certain categories and listing policies that could cause your eBay account to be frozen – so check out all of those things before making your eBay selling decisions.

Selling to your Customers – or to yourself (drop shipping)

The concept of drop shipping (buying products from our supplier network to have delivered directly to your customer) can be done from your current storefront (not necessarily hosted by Shopster) or even more creatively, you can use our system to buy your own Christmas gifts for your friends and family at our warehouse prices.  A great opportunity for additional savings this Christmas!

Don’t forget – Keep it Simple! 

While cool features and graphics may be fun to design and build on your store, remember that your customers are there to get information on products you sell, to gain trust from you and to ultimately buy goods from you.   Try not to confuse them with how cool you are. 

Market Research – do lots of it!

Find the right products to sell, showcase them well in your channels, write effective product descriptions and price your products to sell.   Market research tools such as Terapeak or Hammertap give you insights into what is selling at which prices, but also research your competition and then do it all better than they are!   Find your niche and then target the customers who buy in that niche … anyone (and everyone) can sell to the masses – but the real profit margins lie in those less obvious niches. 

The Christmas season is almost upon us and now is the time to get your sales channel strategies in place to capitalize on what will be another busy online selling season – be creative, be savvy … and be successful! 

Happy Selling!
~Lori

An Alternative to eBay

In the article Top Ten Frustrations for eBay Sellers Chris Crum takes a look what is frustrating eBay users the most.

As most of you are aware eBay has made some big changes recently, including changes to their fee structure. While change is never easy, these changes have been chided and not welcomed by a lot of very vocal users.

Those users, and others, are looking for alternatives. One of the alternatives that Chris suggests is Wigix.

The simple way to describe Wigix is that it is a place to buy and sell stuff online. But it is also so much more.

Selling: Selling on Wigix appears to be pretty simple. It’s set up similarly to Amazon.com in that you search for the item you want to sell, find it and then list that item along side the others. The difference is, unlike Amazon.com, you can sell products that are not already listed in the catalogue.

Buying: Buying is equally as simple. Search for your product and once you find it click on the buy button next to it. The only drawback is most merchants only accept paypal, although others do accept google checkout.

Other stuff that is neat:
Beyond the buying and selling Wigix offers you the ability to build a portfolio. Your portfolio contains items that you own. As the market fluctuates you can see the value of your “assets”. When an item is worth a lot of money sell it.
Other neat features include research and product comparison tools, product manuals, and community forums.

While Wigix functionality is a great reason to use it, the number one reason why users are turning to it as an alternative to eBay is because their user fees are reasonable. If you list an item that costs less than $25 you pay no fees. After that there is a sliding scale in which as the price of your item increases, so does the fee. But the fee raise is quite small, and should not have a large impact on your bottom line. Wigix fee chart is on their website, and they say there are no hidden fees.

If you are in the group of unhappy eBay users I suggest you take a look at Wigix, it may be the solution you were looking for.

Tech Solutions and eCommerce

by Paul McCluskey, VP Research and Development, Shopster

So you've decided to capitalize on your knowledge of the next big product by creating a new online storefront business.  What does it take to get your new business up and running?

• Marketing savvy
• a willingness to put in some hard work
• sales campaigns
• visiting and commenting on products on blog sites to create some natural traffic to your store
• designing the store and sourcing the products.

This looks like an online business that you could get excited about!  Great, the only thing left to do is get started.  But have you missed anything, have you thought about:

• getting a merchant account for credit card payments
• creating the software to run your online storefront
• integrating a payment gateway
• how will you manage your orders
• buying bandwidth for your store
• PCI compliance, security, ssl certificates; What the heck is PCI compliance anyway?

At this point you are either thinking “this is not what I had in mind” or “well, maybe I can find someone else to do all this for me”.

If you go down the path of many online business owners you'll decide to talk to that tech savvy kid next door about building this for you.  He will appear to have all the right answers about building the site based on a book he's been reading on LAMP, you should be running in weeks.  The weeks pass and turn into months but 3-months later you have a functional storefront and you place your first order  yourself.  The kid next door even managed to finish a week before going off to college.  Your business can now officially be launched.

You tell all your friends about your online storefront, some of them even decide to help you out and buy that great new product you're selling; hey things are looking up!  That's when you get the phone call from a customer complaining that he was trying to buy from your site and ended up paying for a cart full of someone else's items... WOW, how could that happen?  Well this needs to be fixed immediately... where is the kid with that LAMP book... hmm he doesn't seem to be returning your calls.  Well nothing that money can't fix, how much can a contract developer cost per hour anyways?

I've seen this before, I was one of those contract developers you would be calling (and by the way you are looking at hundreds of dollars per hour and weeks to months of work!).  It gets worse, there's other things that you haven't even thought of at this point, what happens if:

• a hard drive crashes
• a filesystem gets corrupted
• someone hacks into your computer (can you even tell)
• your network goes down
• your collocation facility goes offline due to a natural disaster
• is the data being stored in  a scalable fashion
• are the servers scalable
• ...

What ever happened to selling that next big product online anyways?  Is it starting to seem like you spend more time being a system administrator and reading that LAMP book then actually selling  products?  Did you really want to know that LAMP stands for Linux, Apache, MySQL and PHP?  What is the point of your business anyways, do you build and maintain software or do you sell products?

This is where the Shopster model works for you.  By teaming together the thousands of other online entrepreneurs like you we share the cost of dealing with all the technical issues for you.  That means that a Shopster administrator is monitoring, designing and testing backup and recovery strategies; a Shopster resource is ensuring that your store is up and running 24x7x365; a Shopster developer is worrying about integrating the latest web browsers, fixing that software bug or adding that new functionality; a Shopster designer is creating new storefront designs and layouts; a member of the Shopster support team is helping your consumer track their order; and a Shopster supply chain agent is worrying about whether that order is being shipped and tracking whether your supplier data is up to date.  Better yet, Shopster is also sourcing the next generation of your product for you!  Best of all, you are free to spend your time on marketing campaigns and sales strategy, the things that got you into online business in the first place.  Things really are looking up.

Tips for holiday selling in a slow economy

For a blog that's supposed to have at least two posts a week, we sure didn't do well this week. Our short-run Monday post series ended last week, an editorial we were expecting on Wednesday didn't materialize, and now this... I'm working on some plans for ShopTalk to help make it more useful to you. We'll be back on schedule next week with three posts (M-W-F).

In the meantime, the marketing geniuses at MarketingSherpa and MarketingExperiments are putting on what will no doubt be an exceptionally valuable web clinic: Ecommerce Holiday Playbook: 13 Ways to Maximize Revenue, Beat the Downturn.

With all the fuss about the economy right now, online sellers are going to have a tougher time making the sale. Buyers are nervous. It's going to take some new strategies to make sure selling online doesn't take the same dip as the rest of the retail world.

It's worth signing up and learning something from proven experts in the field. We'll be tuning in, for sure.

The skinny:
When: Event Date: 10/30/2008 03:00 PM Eastern Daylight Time
What: Two-hour web clinic on optimizing e-commerce during the holiday season.
How: Sign up for Ecommerce Holiday Playbook: 13 Ways to Maximize Revenue, Beat the Downturn

Happy selling!

The power of analytics

By Kim Vandergrift

Frequently evaluating your business is often the key to success. Through proper evaluation you will know if you are on track to meet your goals, you will know which tactics are working, and which are not, and you will be able to make intelligent and informed business decisions.

A key component to evaluating your business is analyzing your metrics. Metrics are a set of measurements that quantify results. In business, metrics will define your progress and give you an indication of how healthy your business is.

There are a couple of useful tools that you can use to measure your metrics. The primary one is Google Analytics.

Google Analytics gives you a ton of information. It will tell you how many people visit your site, what link those people used to get to your site, how long they stay on your site, what pages they visit, and a whole lot more. Here at Shopster, Google Analytics is one of our main tools because it provides so much information.

The challenge with Google Analytics is it takes some for some of the info to start streaming in. But it is a simple process, and once it is set up it runs on its own. All you have to do is log in and analyze the results.

Another useful tool is your sales reports. Keep good records of your sales data. You should know how much you have sold each month, including the value of the products and the number of units sold. You will be able to use this data to compare your sales each month.

As you try different marketing strategies it’s important to watch the effect they have on your site visitors and your sales. For example, if you run a targeted ad campaign and your site visits drop, but your sales go up, you may assume that the campaign is bringing in the right kind of visitor. But if your site visits drop and your sales drop you know that you are attracting the wrong type of visitors and you may want to consider changing your campaign.

Your analytics should drive your strategy. Without evaluating your data your strategy will not be well defined and you will find making sales to be more challenging. Use your data to find out what people are looking for, and more importantly what they're buying.

Good luck and happy analyzing!

Product Search Made Easier

Want to be competitive in the online retail space but don’t know what to sell?

By Jason Innes, Product Manager, Shopster

At first glance, selecting products to sell online can be a daunting task. While there is no single product, product line or strategy that will work for everyone, there are some fairly tried and true guidelines that can help get you on your way.

Rather than starting with the market research phase and review a topic that has already been written elsewhere (here and here), let’s assume that you have already identified a niche market that isn’t saturated, say energy efficient indoor lighting (if you selected the Nintendo Wii as your niche, you may want to reconsider).

The search for products within this market starts with identifying suppliers that either already provide wholesale or liquidation options or may be open to it. In some cases a supplier or even an existing bricks and mortar retailer may not have even heard of dropshipping. Introducing them to this sales channel could be of great benefit to both of you.

Sounds easy but where should you start looking?

While opportunities surround you, options include blogs, shopping malls, consumer shows, trade shows, consumer publications, trade publications, trade organizations and word of mouth. Specific examples relating to our niche of energy efficient lamps could include ENERGY Star (a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy), the Canadian Solar Industries Association or the Washington Renewable Energy Conference that was held earlier this year. Alternatively, you may also start by contacting a manufacturer and asking for the name of their authorized wholesaler in your neck of the woods.

Ok, you’ve found a supplier…but which of their products should you sell or focus on?

As with the entire process, it takes a bit of research. Key traits to look for are:

    * What’s selling in this area? In our example, should you focus on energy efficient table lamps or overhead lighting (maybe both)?
    * What product(s) can you get at a reduced rate and for how long? This is likely to indicate the products with the best margins
    * Does the supplier have any new products that just came in?

In our experience, the best and easiest way to obtain this information is by asking the supplier (after all, they want to sell more product too). Typically, new products or products that have recently dropped in price are likely to be lucrative. While many factors are necessary to ensure success, selling a hard to find product (new) at a competitive rate (recent drop in price) will go a long way. But you need to act fast. You are not alone in the search so aim to be one of the first to offer and promote these products in the online market. Depending on your niche area you may find that these products find their way to competitors fairly quickly (could be hours and days rather than weeks or months).

If you miss the boat, don’t fret, there will always be other new products and price reductions tomorrow!

Once you have found your niche, identified a supplier or group of suppliers and the products that you want to sell…evaluate the results and repeat this process frequently. Consumer sentiment changes frequently and top retailers change with them.

With over 1 million products in the Shopster virtual warehouse we felt that finding interesting products that you can sell online at a competitive price was a challenge. So, a few months back we set about making it easier for you by introducing new promotion pages to highlight products that are likely to be both attractive and competitive:

    * New arrivals: products that just came into the warehouse, updated daily
    * Price drops: products that have recently dropped in price. Now, you can also find the best deal faster by sorting your searches by the largest drop in price
    * Top stocked products: top products that have been recently added to online stores by our retailers
    * Top selling product categories: This one should come with a warning: while some retailers have had success with these product categories you may want to steer away from them and find an untapped product category
    * Featured suppliers: suppliers of our choice. Some are selected because they are known to be very reliable, others because they are new to Shopster and some just because we like their products!
    * Featured products: recommendations of products that we feel are untapped or that should sell well in the coming months (such as Thanksgiving and Christmas)

If you have any further ideas of what you would like to see when searching for products please let us know.

Happy selling!

Shopster.com scam series, part four

This is part four of a four part series that talks about some online scams, and helps dispel concerns people might have about Shopster.com as a scam.

3 Warnings About Online Business Opportunities

You should have concerns about any online business opportunity.  It's up to them to convince you that they're what you're looking for.  You should be able to find out all the information you want without having to jump through a ton of hoops.  To help find legitimate opportunities, you have to weed your way through the scams.  Here's a list of things you should be able to easily check when verifying a business.

1.  You should be able to contact the company in at least a couple of the following ways:
     a.  Mail
     b.  Telephone
     c.  Email
     d.  Live Help/Live Chat

For Shopster: Head on over to Shopster's contact page for physical mailing addresses, telephone number (business hours apply), email submission form, and Live Chat links (business hours apply)

2.  You should be able to read all of the company's policies regarding your pending relationship with them.  Check out Terms of Service, End-User Agreements, Privacy Policies, etc.  Make sure you understand them before you agree to them.  In terms of "signing" agreements online, you can be understood to have accepted an agreement (even if you haven't read it), if you sign up for a service - insofar as the agreement was provided to you.  Make sure you read what you should expect from them, and what's expected of you.

For Shopster:  Head on over to Shopster's privacy and policy page.

3.  You should not be told you can make money with no (or hardly any) work on your part.  It's not realistic and anyone who tells you that is probably lying to you.  Setting up and running a business can be hard work.  Responsible business solution providers should be there to set realistic expectations.  But, they should also be there to help you overcome some of that difficulty - otherwise, what are they providing?

For Shopster: We help set some expectations in our blog post about the Shopster profit model.  To summarize the post: Setting up and running a business can be hard work.  But, we're here to help you make it work.

In conclusion:
At the end of the day, your vigilance will pay off.  Once you've found the business solution that best fits what you're looking for, see if you can try it out for free.  As far as Shopster goes, we'd love you to try us out for free for seven days.  If we're not what you're looking for, cancel your trial at any time and let us know what we can be doing better to meet your needs.

I hope you've found our Shopster.com scam series helpful.  If you have any questions or concerns, leave me a comment.  I'd love to hear from you.

Happy selling!

See all Shopster scam posts.

Netbussinessblog.com

Finding a blog that is informative, useful and entertaining is nearly impossible. In my quest for finding great blogs that are relevant to e-commerce I have stumbled upon about 3 that I actually subscribe to and hundreds that I think should be banished from the internet.

One blog that I feel is worth mentioning is Netbusinessblog.com.

The strength of Netbusinessblog is in their huge amount of content. This blog has been publishing blog posts since January 7, 2007. In that time it has averaged over 25 posts a month. That is about one blog post a day.

When I see that a blog has posted that much information I question the value of that information. After all, it takes time to research and pull together high quality content. But Netbussinessblog is posting high quality content, and they are able to do it because they live that content.

The majority of the posts are about blogging and SEO. The writers write and promote the blog and they are also SEO Consultants. They are well informed about these topics, and I suspect that is why they write about them so often.

The writers being SEO consultants is good news to online retailers because the number one marketing challenge for any online business is SEO. For online business owners Netbussinessblog is a great resource for tips and tricks that relate to this field.

Although the writers are SEO experts, the blog offers a lot more than just information on SEO. I found their other internet marketing and online branding tips to be very helpful.

As any ecommerce business owner knows, making your online business a success takes a lot of work and dedication. Netbusinessblog makes the process a little easier by providing relevant and useful information. I recommend taking a look at their blog, and if you don’t find what you are looking for send them an email. They are always looking for new suggestions for topics to write on.

What is e-Commerce?

By Sarath Samarasekera - CEO, Shopster

A while back I was asked to give a lecture at the on the future of e-commerce to fourth year Haskayne School of Business students at the at the University of Calgary.

I posed to these students a simple question. "What about e-commerce is so manifestly different that we don't just call it commerce?"

Someone catcalled "... it happens on computers"

Did everyone agree...? Some heads nodded then slowed, then stopped. The room looked at me with distrust, was the question a trap? Yes, that was obvious, but what kind of trap eluded them.

So I asked "What 'happens' on computers?"

..."commerce"

hmmm... so e-commerce is commerce that happens on a computer?

Shopster is not a scam, part 3: The Shopster Profit Model

Last week we covered the drop ship supply chain model. This week, let's take a look at Shopster's retailer profit model. The way profit is calculated ties in very closely with the supply chain model.

A large chunk of a traditional store's overhead is the cost of purchasing products to sell. Sellers utilizing a drop ship product source - like Shopster - don't have that overhead. Instead, they see a different calculation of their earnings on a sale.

The drop ship supplier lists a cost for a product. The seller can sell that product for any price. The difference between the supplier cost and the selling price is the profit earned by the seller. Selling above that cost earns the seller a profit. Selling below that cost "earns" the seller a negative profit... also called a "loss".

For some low-margin products (electronics come to mind), this can sometimes be a disheartening discovery for the seller. Because the online market is inundated with electronics sellers, the margins to be made on sales of such products are often lack-luster. This sometimes leads to accusations that the Shopster profit model is a scam. "I can't earn any money with these costs." For some products that just might be true... there are very likely some products that it'd be tough to earn a profit selling. But it's nothing that ingenuity and hard work can't overcome.

Selling online isn't easy. Well, let me rephrase that: "Making a profit in any business isn't easy." Selling online is a complex process. Business solutions like Shopster are there to help ease some of that complexity, but at the end of the day if it were super easy to make money hand-over-fist, everyone would be doing it and eventually nobody would be making money. No supplier can get you a Wii for $50. If they can, they're probably stolen, broken, or actually a Gameboy. So, you're not going to be earning huge margins on that particular product. It'd be nice - heck, I'd love to earn $200 profit selling a single Wii - but it's not going to happen (except maybe at Christmas).

We now try to set reasonable expectations by constantly reiterating that Shopster is not about getting rich quick. Anyone who tells you that you can make money with little investment and no work is lying to you. Shopster tries to be pretty upfront about the profit potential of our model. We had to switch to being up-front because an early marketing message of ours got us into a little trouble.

We had tried a slogan along of the lines of "Unlimited Profit"... which we figured came down to semantics - as the retailer was free to set their own prices and was not limited by how many products they could sell, we figured the profits were technically not limited. Some retailers took issue with this slogan, as their attempts to earn "unlimited profits" were stymmied. This lead to accusations that "Shopster is a scam" or "Shopster is deceptive" or "Shopster ripped me off". (Which you can read about at results for Shopster at Rip-Off Report and on our BBB page.)

Now, we try to set that expectation that hard work is needed - retailers using Shopster are still setting up a business, and that's not easy.

Here are some considerations for online sellers to help set some expectations about profit:
1. Economy of scale.
2. Complementary high-margin product sales.
3. Seasonal sales focus.

1. Economy of scale simply means the seller needs to consider the number of products that must be sold to make the sales effort worthwhile. There aren't too many stores that make a living off making a single sale. Retailers need to be able to make multiple sales to turn a profit for their business. This holds true of the online seller, as well. The overhead of an online store or online sales effort (like on eBay) is usually lower than that of a brick and mortar storefront. Yet, the online seller faces some unique challenges:
a. Ease of the buyer to find competing sellers.
b. Greater volume of semi-targeted traffic - note: capitalization on long tail (or highly targeted, low volume traffic).
c. The value of a personal interaction in the sales process.

2. Complementary high-margin product sales should anchor your sales efforts. While few people will come to you to find an HDMI Up-Converting cable, the people coming to you to buy an XBOX 360 might be convinced they need one. The margin on your 360 is pretty low (Microsoft sells them at a loss). The margin on your cable is pretty high.

Real world example: A couple years ago my wife and I bought our flat-screen TV and a new HDMI-compatible DVD player (our old DVD player didn't survive a move and this new player was cheap if you bought that company's TV). I hadn't bothered to learn anything about cables or resolution or any of that - I only wanted a flat-screen TV so that I had a cooler TV than my brother. I didn't know what HDMI is, so I didn't think to get an HDMI cable - thinking instead of getting the traditional RCA connectors (the three-colored ones). The non-commission sales person was quick to point out that I'd be wasting the potential of my new TV if I settled for the RCA cable, and quickly expounded the many benefits of the way, way better $120 HDMI cable. Not being one to part with $120 on the spot, I opted to take my chances with RCA. My AV-savvy coworkers were quick to make fun of my hilariously inadequate hook-up, and a buddy offered up the same HDMI cable at-cost that his friend could pick up... for less than $20. Looking around at the TV I had purchased, the price I paid seemed pretty standard... everyone was offering the same price within a few dollars. But what about the cable? Assuming my buddy wasn't fencing stolen cables, the margin the big box was earning on that cable was pretty serious.

3. Some retailers adopt a seasonal sales focus. This means they look for high selling times of the year (like Christmas), and focus their efforts on making money during these times. Their stores trudge along during the sales troughs, but then they're fully optimized by the time a seasonal mini-spike comes up. Seasonal sales trends should be a part of every seller's business research - they should be getting an idea of what to sell and when to sell it.

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So, there it is. Signing up for Shopster won't immediately make you a successful online retailer. It will take some work on your part, too. You'll have to research which products are selling and what kind of margin you could make on products supplied by Shopster's network of dropship suppliers. You'll have to work to optimize your sales efforts to make sure you're bringing in enough visitors, creating enough auction listings, and getting your business out there. But, we're here to help make it easier. We source new and better drop ship product sources, we build relationships with existing suppliers to get better prices, we provide the tools to build your online store and sell on eBay, and more.

If you have any questions about Shopster, don't hesitate to contact us. Happy selling!

Read all Shopster Scam posts.

Shopster video

To answer those questions you might have about Shopster, watch our new video:

So, what do you think? Comments? Suggestions?