Shopster's Dropshippers, eCommerce, and Selling Online Blog

The Google PageRank Update has Started

This is the day that all SEO geeks (like me) look forward to. Today is the day that Google starts its quarterly PageRank update. It was originally predicated that the Google PageRank was going to start updating on December 26, but I guess it's only fair that the Google employees get to spend the holidays with their families as well.

Are you wondering why the update is so exciting for us SEO geeks? Well, it's 1 of 4 days a year that Google actually lets us see inside their minds. We get to see what they actually think of our sites and see how much our SEO hard work has paid off. There is a rating system of 0 to 10, the higher that you get to 10, then theoretically, the better Google thinks your site is. Google PageRank should not be taken completely seriously though, you can still have a great site that gets ton of traffic without having a high PageRank. It's just one of the many things to consider when you are implementing your SEO strategy.

Want to learn more about Google PageRank? Check out the following sites for some great information on Google PageRank:

• eFactory's Indepth Guide to PageRank 
• Ecommerce Know-How: Bot Herding, A SEO Internal Linking Tactic
• PaRaMeter: A Free Google PageRank Checking and Monitoring Tool

Fraud and Dropshipping: What you need to know

As with any business, businesses that sell items online are not immune to fraud. If you utilize a service that aggregates suppliers that will dropship products, such as Shopster, you need to be aware of the risks and take steps to protect yourself from becoming a victim of fraud.

Shopster offers protection to retailers who sell items out of their Shopster hosted storefront. We review all orders and put them through our robust fraud process. If an order is deemed to be fraudulent we cancel it, and the retailer does not have to sacrifice their own money to pay for lost product.

Shopster is able to conduct a full review of orders placed through Shopster hosted storefronts because the customer uses the Shopster system to order and pay for the item. We receive all the information necessary on the customer to make a judgment on whether the order is legitimate or fraudulent.

But if the retailer’s dropship products are sold from another website, such as eBay, the end consumer does not use the Shopster system to order or pay. They use the retailers. Because the Shopster system was not used, the Shopster Fraud Prevention Team does not have all of the information necessary to conduct a full review.

That is why it is important for you, the retailer, to conduct your own review on orders that you accept from other sites.

A simple first step to avoid fraudulent orders is to learn more about your customer. Do a quick background check into their reputation on eBay or the site the item is being purchased from. If you want more information, or if you want to confirm their identity call the customer. Sometimes a phone call is the simplest and most effective way to verify if a customer is legit.

You should also understand how your payment service can protect you. If you accept credit cards, make sure your merchant account supports AVS and CVV2 checks. And you may want to consider only accepting PayPal transactions if the user is verified or confirmed.

PayPal is in the business of making financial transaction secure. It is one of the safest ways to transfer money, and they take fraud very seriously. For small business owners, or eBay only users, I strongly recommend that you only accept payment through PayPal.

Selling dropship products on sites such as eBay can be very lucrative. And if you are diligent, and review each order carefully, you may never experience an act of fraud. But it’s important that you educate yourself on what to look out for and take pre-cautions when ever possible.

Google Pay per Click fraud

Online retailers know that for online success marketing is King! One of the most used vehicles for marketing your products online is Pay Per Click, and the most popular company to use is Google AdWords.

For those who are not familiar with Google AdWords it is a way to advertise your site online. Through your Google AdWords account you can create a campaign around a set of keywords. When an internet user Googles one of your keywords your paid advertisement appears in the right hand column, next to the organic search results. When that internet user clicks on your ad they are directed to your landing page, and Google AdWords charges you a set amount for that click. That is why it is called Pay Per Click.

A challenge with Pay Per Click advertising is there is always the possibility that people with no intention of buying your product can click on your ad. This means you are out the cost of the click, without gaining a customer.

I found a great video interview with Shuman Ghosemajumder, the Business Product Manager for Trust and Safety at Google, in which he explains how a Google AdWords user may be defrauded, and how the user may detect the fraud.

Ghosemajumder explains that there are two main incentives for someone to fraudulently click on an ad. First, they may be trying to harm their competition, and second, an AdSense publisher may be trying to inflate their revenue by generating false clicks.

The fraudster’s techniques range from simple to complex: the easiest way for someone to defraud an AdWords user is to simply click on their ads one at a time, a more complicated way is to create botnets that click on multiple ads in a short period of time. More organized, but less tech savvy people, hire others to click on ads all day long.

Google tries to protect their AdWords users by working to detect fraud. Google utilizes simple rules to try to detect and prevent fraud. Simple rules include negating the second click of a perceived double click. What this means to the AdWords user is if an internet user double clicks on their ad Google will only charge the AdWords user once.

A second way Google tries to detect fraud is by monitoring their data for statistical anomalies. Google believes in the adage: More data is good data. Google takes their huge amount of data and analyzes it continuously. Their data gives them a range of online user behavior than can be considered normal. If they observe an event, or behavior that is not expected they will consider it as being fraudulent activity.

Ghosemajumder explains that the total number of invalid clicks, as detected by Google, is quite low, at less than 10%. And of those, less than 0.02% have been proven to be fraudulent. So, AdWords users need not worry, the probability that their ads will be clicked upon fraudulently is quite low.

But there is a way to protect yourself. Ghosemajumber explains that the AdWords user should always be monitoring their data. Create and gather as much data as possible. Understand what your expected results should be, and if you begin to see unexpected activity try to understand why. If you can find no other explanation you may be a victim of fraud and you should contact Google.

One of the best indicators of fraud is if your Return on Investment (ROI) drops unexpectedly. If you’re AdWords clicks are normal or higher than normal, but your revenue or the number of products you are selling is below what you consider normal, than you may be a victim of fraud.

The best way to avoid being a victim of fraud is to be diligent with your marketing analysis. You can protect yourself by monitoring your own data, and understanding the results of your online marketing strategies.

Happy selling!

Top eBay alternatives

ecommerce-guide.com has released their top picks for eBay alternatives, and I have to agree with their choices.

In first place is Wigix. I have reviewed Wigix in this blog before, and if you read the post (which you can find here) you know that I am a supporter of Wigix.

For those who haven’t read my post ecommerce-guide.com offers a nice, condensed summary of what Wigix is.

Wigix offers users a stock-market style method for buying and selling goods. Instead of auctions, Wigix.com, the "Want It, Got It Exchange," uses a price-matching system similar to that of Nasdaq — buyers and sellers list desired prices for merchandise and the system will alert them when they match up. Or, buyers can offer an alternative price, with both parties having the option to accept or reject the bid.

Bonanzle came in second place. Prior to reading this article I had never heard of Bonanzle, so I had to check it out.

The site is simple and easy to use. If you would like to sell an item you simply create an account and list the product. The prices are set, so there are no auctions or bidding. Bonanzle offers the seller tools that will allow customers to easily contact them, creating an environment in which discussion about the product is encouraged. 

Bonanzle’s success is rooted by their commitment to building an active user community. The site promotes the community with tools such as instant messaging, forums and message boards, and the ability to create a unique profile. ecommerce-guide.com describes the Bonanzle community as “almost fanatic”.

Bonanzle is getting great coverage in newspapers, on radio shows, Web sites and blogs, thanks in part to a hardcore group of sellers who pitch this site and its features.

Finally, ecommerce-guide.com recommends checking out Etsy as an alternative to eBay, especially if you are an artisan or part-time craft maker.

Ecommerce-guide.com explains:

One of the most popular niche alternative sites is Etsy, a selling platform for all things handmade. The goal of the site, launched back in early 2005, is to actively support those who choose to create and buy alternatives to mass-produced objects. Etsy, by bringing together artisans, has also grown a community of people who support each other, in contrast to sellers on eBay who tend to consider every other seller in their category a competitor. While Etsy promotes its community as a place to buy and sell handmade items, you can also list vintage items (over 20-years-old) and commercially-made supplies.

If you have never checked out Etsy before, I highly suggest it, even if you have no handmade items to sell. It is the perfect site to purchase unique items, and many of them make great gifts. I personally love Esty, so much so that this Christmas I have requested money to spend on Etsy so I can get myself some great purses and jewelry. 

Regardless of what you buy or sell, there are alternatives to eBay out there for you. Take the time to check them out; I am sure you will not be disappointed.

End of the Reasonable Expectation of Delivery

A couple years ago, I was asked to come up with a term for our shipping dates that was shy of "guarantee".  Because our warehouse relies on dropship suppliers for our supply chain model, we had limited control over the speed at which suppliers fulfill orders.  We thought it would be irresponsible to claim a guaranteed shipping date when we could only do so much to effect the final outcome.  Instead, we've been using the term "reasonable expectation of delivery"... it just kind of stuck.

This year, the end of that period fell on the 16th for expedited shipping orders.  Orders placed today and beyond could very likely still arrive in time for Christmas.  Retailers should not give up on their sales efforts.  According to DMNews, a BIGresearch study found that 41 million shoppers haven't even started their holiday shopping (let alone finished it).  Many of those people (I know a couple), are going to be scrambling as it dawns on them that Christmas is nigh. 

These people are going to have some unreasonable expectations of delivery timeframes... but they're also running out of options.  In a couple days, they're either going to have to:
1.  Brave the mall crowds
2.  Buy all Christmas presents at a gas station (wiper blades, WD-40, and candy for everyone)
3.  Accept that their presents are going to be late

This little demographic also has the unique capacity to find lower prices because the big rushes are over and retailers are trying to dump the last of their inventory.  That said, here's a tip: Keep marketing your products.  The biggest rush is over, but there are still people buying.  Make the most of the rest of the holiday season before starting up again for 2009.  41 million people still need to buy presents.

Happy selling and happy holidays!

Wholesale Expectations

There's an excellent expectations-setting article about wholesale over at Skip McGrath's Auction Seller's Resource.  Written by Chris Malta of WorldWide Brands, "The Wholesale Misconception" talks (rather candidly) about peoples' expectations when they hear the word "wholesale".

Some people think that working with a real Wholesale Supplier means that they will magically be able to sell products for less than anybody else on the planet, for ever and ever. They'll be the only one who ever gets such good prices, and they'll earn millions because no competition can touch them. They're retire happily in a couple of months, and buy a big house in Beverly Hills, complete with a butler, a private chef, and a little satin doggie bed in every room for the casual use of the family Basset Hound, Duke.

It's kind of a harsh eye-opener for potential online sellers looking for that quick fix to their product sourcing problems.  Short of a semantics argument about the true definition of "wholesale", the article talks about the realities of the wholesale supplier industry.  Malta further delves into what expectations online sellers should have when it comes to wholesale sourcing. It's not enough, however, to simply tear down the illusion about wholesale that hopeful aspirations create.  Here's the advice to top it off:

You need to be comparing prices against sites that will be seen in the same places that your site will be seen, and even if your prices are higher, you can bring in sales by building a clean, focused site. Alternatively, you can simply sell the models that others are NOT selling. After you begin to earn some profit, you can then start to buy and stock the better sellers in quantity, lowering your price, if you really want to.

So, what should we take away from this?  Have realistic expectations.  If it were easy to get rich quick, everybody would be.  Do yourself a big favour by reading Malta's whole article.  There are solutions out there to help you build your business, but you have to be ready for the reality of creating a legitimate, lasting business.

A Very Shopster Christmas

Christmas is a busy time of the year for us.  While retailers are running into their biggest sales days of the year, we're running into our retailers' biggest sales days of the year.  We're working hard to ensure everything's running smoothly for sellers and buyers.

Yet, somehow, we find time to decorate and do a little celebrating.  Yesterday, we put up our annual Holiday Fireplace.  You can see our VP of R&D debugging the Yule fire at right.

Today at noon, we have competitive Gingerbread House Building.  I think it's supposed to be a team-building exercise.  But, thinking back to my childhood, I seem to remember a correlation between building a gingerbread house with my folks and the amount of yelling heard by the neighbours.  My team includes the CEO, so we're probably going to win.

And while all this is going on we're processing orders, fighting fraud, supporting retailers, ensuring server up-time, writing educational and marketing materials for retailers, and creating strategies and software to help our retailers find even more success in the New Year.

Shopster would like to wish you a Merry Christmas, Happy Hanukkah, Joyous Kwanzaa, and a Glorious (and Woeful) Festivus!

Happy selling and happy holidays from everyone at Shopster!

Gain the competitive advantage after the recession

Practical eCommerce has a great article about achieving post-recession success. It's counter-intuitive: Invest in your business now. When economic times are tough, it's difficult to commit to putting money into your online business - which will push a number of retailers out of the market.

Build your store now. Put time and money into marketing it. Establish your web presence now so you are ready to sell when consumers are ready to spend again.

Economic anxiety and a lack of insight have prompted some online retailers to slash their advertising budgets. However, when fewer of your competitors are investing in advertising, you can step up and command a market, improving sales now and in the long term. Read the whole article now.

Basically, even though money's getting a little tighter, you don't cut back on your business efforts.  You have to forgo the retailer trend of slowing sales and marketing efforts.  Keep up the work so that you are established when consumer confidence returns... while other retailers are scrambling to set up again.

2008 Sales Figures on Par with 2007

Some good news from the world of online retail: Sales are where they were last year.

Now, all the naysayers are going to complain that "sales figures (on the whole) aren't going up!"  To which I reply: "It's a recession - apparently.  Of course they're not up."  These people have a hard time getting the value of sales not going down.  That's a heck of an achievement.

It's kind of like if I'm cheering for my hockey team (whose roster has been depleted by injuries) and they don't score.  Sure, it's not as good as if they were to score.  But, it's way better than them getting scored against.  [Okay, it's not a perfect analogy as there are no more ties in NHL hockey... someone has to get scored against.  But, it's close. - Michael]

According to comScore - as reported by e-commerce-guide.com - the $14.92 billion spent in the first 35 days of the November-December holiday shopping period this year is on par with the amount spent online during the same period last year.  Complain all you want, pundits, but $14.92 billion is a lot of money.

We're not in the clear, yet.  This year's holiday shopping season is about five days less because of where Cyber Monday fell on the Calendar - and it should be a marker as to the beginning of the serious spending period.  So, we have to see continued consumer exuberance to match last year's numbers (which were pretty good).

Read ecommerce guide's full article - Online Shopping Sales Holding Steady.

Sales channel showcase: Etsy

I first came across Etsy when I was looking for someone who made and sold a particular tuque (a wool-knit winter hat, if you're unfamiliar with the Canadian term) that I wanted to buy as a gift for a fan of the TV show "Firefly".  This hat, in fact.  But then the intended recipient got an equally awesome tuque from someone else, and I was out a gift idea.

Then, yesterday a colleague was doing some research on new sales channels for online sellers and sent me a glowing review of Etsy.  So, what exactly is Etsy?

From the About Etsy page:
"Etsy is an online marketplace for buying & selling all things handmade.

Our mission is to enable people to make a living making things, and to reconnect makers with buyers.
Our vision is to build a new economy and present a better choice:

Buy, Sell, and Live Handmade."

A very interesting idea - empowering artisans to ply their trades online.  But how successful could sellers be on this channel?  Well, gross merchandise sales exploded from $26 million in 2007 to an estimated $87 million in 2008.  They claim 1.5 million members and 170,000 sellers.  Assuming every single one of those 170K are active sellers, that's a little over $510 each at $0.20 per four-month listing (and a 3.5% transaction fee).  Not too shabby - especially when you consider that of the 170K sellers, only a fraction are probably actively selling.  Which means the per seller profit is respectably higher.

--- About Etsy ---

Etsy is a spirited sales channel with a heavy focus on hand-made, quality goods.  The overly commercial and mass-produced are frowned on - except where you're providing supplies to create crafts and other hand-made goods.

Some things to keep in mind:
1.  You need to be exceptionally transparent about your intentions on Etsy.  It is a community sales channel unlike most places people can sell. 
2.  You need to have a genuine interest in what you're selling.  That means that you should be engaged in, have some knowledge of, or experience with arts and crafts.  You cannot be a cold, faceless company - you have to be active.
3.  If you do want to sell commercial supplies, they must be sold in the supplies category, and they must be pertinent to the field of handmade goods.

So, while Etsy does present a unique niche market, it will require some work and interest on your part.  It'd be best to steer clear if you're not interested in the field of handmade goods - or, in this case, supplying materials for such.

It just goes to show that you can sell in more places than just eBay.

---  Where to go from here ---

1.  Read Shopster's article about multi-channel sales efforts: Holiday Marketing and Shopping Comparison Sites.

2. Take a minute to read Etsy's "How Selling Works" page to learn how selling works on this interesting alternative sales channel.

Holiday Shipping Deadlines Approach

Holiday Shipping Countdown!
	13 DAYS LEFT! Don't forget that the holiday shipping deadlines are approaching. These are the last days to place orders for a reasonable expectation of delivery before Christmas.
	•  Regular Shipping: Order before December 14th*
•  Expedited Shipping: Order before December 16th*

These are the dates we're telling Shopster retailers.  While it is possible you could still get orders delivered on time after these dates, you can reasonably expect your dropship customers to receive their orders if you place them before the 14th (regular shipping) and 16th (expedited shipping).

If you're looking to make a few quick sales before the holidays get too close to ship, sign up for a Shopster product source account to get access to the top drop ship suppliers electronics and other top selling holiday products.

Shopster protects you from fraud

The NETELLER Group recently reported that industry analysts estimate the annual cost of online credit card fraud to be as much as US$60 billion. Depending on the type of transaction and industry, recent research estimates anywhere between 3% and 20% of online orders are fraudulent, with costs adding up to 10% of gross online revenue.

For any company, of any size, this is significant. But it is especially significant for small online merchants. Think about it – you just sold a Nintendo Wii Game bundle for $450, which would net you about $100 in profit. You are excited because this is your first big sale on your online storefront.

The purchase goes through, you send the product out and for three months you celebrate your success. But then you receive a chargeback. The credit card company tells you that the person you thought you sold the Wii to never actually ordered it and you must now pay the credit card company back. You are now out the $450 you received from the customer’s credit card company, and the product, for a total loss of $800.

If you are a small business, as most of our retailers are, $800 is a huge hit. It may mean your net gain for a given month becomes a negative. A single chargeback could break a small online retail company.

But have no fear, Shopster is here.

Shopster’s package includes a merchant account and order fulfillment. This means all transactions and orders placed through your Shopster store are managed by the Shopster team. The order fulfillment process includes fraud review.

Shopster protects your business by reviewing all orders that enter our system. Through the use of proven techniques and the experience of our excellent fraud review team, Shopster is able to weed out the fraudulent orders.

Those ordered deemed to be fraudulent are never fulfilled. And you never have to worry about losing your profit check to a chargeback. You can be confident that all orders Shopster allows are legitimate and your business is secure.

Fraud is a given in any business. But with Shopster, it is one less thing you need to worry about.