Etailing

I received an email from Maureen the other day concerning etailing. Maureen has three storefronts on the Web, but she is frustrated because she has trouble finding vendors that will sell to her at true wholesale and also offer to drop ship. Here's my response:

Maureen,

First of all, I don't have a lot of personal experience with e-tailing using drop shipping. But I'm the first to recognize that it's a direction we've already taken in today's e-world.

There are problems, however, with this channel. Right at the top is pricing. To buy something at wholesale, sell it at on-line at retail, and have the vendor ship it to the consumer, is a dramatic departure from the way we have done business in this industry. The traditional channel has brick and mortar retailers buying from vendors at wholesale, paying shipping and using a 100% markup to price items at retail.

To complicate matters further, you have vendors that want to have their cake and eat it, too. In today's world of the Web, many vendors have websites that are retail; therefore, they are competing with you as an e-tailer and have little incentive to sell to you. Meanwhile, they are also desperately trying to keep their brick and mortar wholesale business. As a result, they can easily end up confusing and infuriating store owners who pay rent, pay employees, etc. And I'm sure their sales reps aren't happy to have you competing with their store accounts.

I feel the solution, if there is one, has to come from the vendors. Maybe, after I post this to my blog, and you find out more when you attend the New York show in January, we'll have a better handle on this way of doing business.

Thanks,

dale@greatrep.com

DON'T HAVE A PRINTED CATALOG?

Thanks to the advent of the Web, you don't need a printed catalog. But, if you don't have a printed catalog, then it's a must that you have a website/catalog online. But don't stop there!

Your website should include a Contact page that details how you may be contacted, which nowadays is mostly via email. When you respond to email inquiries, it is vitally important that you prepare a well written response that explains how you present your catalog and other information that will make the a potential buyer feel welcome and comfortable with working with you online. As an example, see http://www.greatrep.com/response_example.htm. You can modify this example to fit your situation. And make it appear to be personal, i.e. not some canned auto reply response.

LEARN HOW TO USE GREATREP.COM

As a registered vendor, do you know how to request catalogs and place orders at www.GreatRep.com? Can you explain how the site works to a potential buyer? If not, you need to take a minute to login as our fictitious buyer and place orders, request catalogs and place inquiries - for your line!

You will login with test buyer (Shop Around the Corner) username shopgirl and password joefox. At MY ACCOUNT click on the MAIN DIRECTORY and look for your line in the directory. Then click on any of the following icons:
To request a catalog
To place an order
To inquire about an order

You can always check your submissions by returning to the
MY ACCOUNT and clicking MY INBOX. Then click the appropriate bar for catalog requests, orders or inquiries.

Practice makes perfect! And feel free to let others in your company practice on the site. Get your customers involved and work with them to use GreatRep.com.

REPPING 101 - A CRASH COURSE

Manufacturers (vendors) sell their products, often using sales reps, to retailers (buyers).  Vendors may also exhibit at trade shows attended by buyers; and today, they will find it essential to have their own website.

Vendors hire sales representatives to go out and call on retail buyers.  The reps write orders for the vendor, send the orders to the vendor, and the vendor ships the orders to the retailers.  Sales reps often cover a specific territory, e.g. the state of Iowa.

The retailer pays the vendor for the order, and the vendor pays the sales rep a commission (15% is the standard in the giftware industry).  For example, if the order shipped to the retailer totals $100 (not including shipping and handling), the vendor pays the rep $15.00.

Wholesale pricing is different than retail pricing (the price paid by a consumer).  For example, if the retail store sells your item for 9.99, they are usually doubling what they paid the vendor for the item, e.g. it would be $5.00.  Vendors may also offer discounts on large orders.  In those, cases, the rep commission may also be discounted.

The best resource for vendors to learn the wholesale side of the business is right in their backyard - a retail store that would like carry their products.  Vendors should make contact and meet with with the buyer (retailer), show their product line, and ask for advice from the buyer regarding representation.

Vendors need to be very careful in this business not to let consumers go around their retailers, i.e. by selling to consumers at the same price that you sell to retailers.  That's a big no-no.  In cases where a vendor has its own website, it's important to keep the wholesale and retail sides clearly delineated, often with a registration and login required for the wholesale side.

The whole purpose of GreatRep.com is provide an online venue for vendors, sales reps and buyers to interact and conduct business that provides immediate benefit to everyone.  Registration is free at Greatrep.com for Vendors, Buyers and Sales Reps.

MY SHOWS - New Feature

With a Full Service Listing, vendors can now post the trade shows where they will be exhibiting.  See example.

Plus buyers will soon be able to search the GreatRep.com directory for all vendors exhibiting at a trade show they are attending.  Buyers will love this feature!!!!

 If you already have a Full Service Listing, you can get started immediately and post your shows.  Simply login and go to MY SHOWS.

 Other vendors can add this feature to their GreatRep directory listing by simply upgrading their current listings.  Click here to upgrade.  Cost to upgrade:  from Basic Listing - $60; from Basic Plus Listing - $35; from Catalog Request Listing - $15.
  
 Forget your login?  Click here.

FACEBOOK FOR BUYERS

Our Facebook page has definitely been a big boost for our business. That's why I have made it a mission of mine to encourage our GreatRep retailers to put up their own business page. Unlike a personal page, the business page has whistles and bells that are specifically designed for a business environment. You may even want to go into Facebook Ads and pay on a cost-per-click basis for driving traffic to your page.

A Facebook business page is especially well suited to retail business, either brick and mortar or on-line. It's basically like having your own instant billboard that can be used to let your favorite customers know what you're doing, on a daily basis, to get them back in your store. Plus, the ease with which you can add images helps with the page's eye appeal - a very important consideration.

How do you get started? It's simple. Go to http://www.facebook.com/pages/create.php.

Good luck!

dale@greatrep.com

Will Groupon Work For A Small Business?

Groupon is getting a lot of attention now, especially since it has announced it is going public with an IPO. To see how Groupon works, go to www.grouponworks.com.

While Groupon is primarily geared for the retail sector, it is possible for wholesale vendors to peddle their products at retail using a Groupon discount. However, a recent article in PCWorld contains some powerful reasons for smalll businesses not to use Groupon. Go here for the full article.

From my own experience, I have witnessed several companies in the small buiness category that failed because of their eagerness to get sales or a large account through "giving away the farm" discounting. In many cases, they could not produce product to meet the demand.