Wednesday, June 15, 2016

Want to grow sales online? Don't just list. Sell.

At a gathering at a friend’s place some weeks back, I was introduced to a businessman & his sister. When the host introduced me to them, his immediate response was “Oh Digital Consultant eh? E-Commerce and all that? But, does all this really work? My sister too tried some of this e-commerce thing but nothing much happened you know?”

His sister went on to explain how she had tried to expand her small family business online by listing some of their products on marketplaces. They employed a few local artisans who made handmade gifts with local designs which they then sold to some local shops and foreign buyers who regularly bought a fixed quantity. Wanting to grow the business, she had listed on 4 different marketplaces but sales were far and few in between and she had almost given up on online.

My first question to her was “So you listed your products on marketplaces. What did you do to sell?” She had no answer. So I asked her how did she sell currently, and she said that she didn’t and those who bought came to them and picked up a lot in one go depending on the designs and then repeated the orders from time to time. They bought regularly and so the business had been since decades. When she listed on marketplaces she was hopeful of being able to showcase the products to a larger audience and sell more and grow the business. But that had not worked.

So I explained – “Imagine if you sent your products to one of the large retail chains in your city to sell. What would you think would happen? Would your products sell?” “Yes” she replied. “If they were visible and the sales people were trained to explain the intricacy of the work and that it was all handmade, and if the pricing was right, we could sell”.  Then I told her “Now multiply that one retail shop and the probable sales by a few hundred times and more and that is what an online marketplace is. However just like in an offline retail shop, in online too your products need visibility, introduction, special pricing to increase sales, and a lot of other effort.” “All you have done so far is list. Now try selling” I added. “Think as a potential buyer would, and then go on to list your products. And this time list so as to enable discovery, bring out the wow, don’t just show but showcase, price it right and then go back and do it over again, and again till you get it right and you will start selling.”

She took my advice seriously and got back to me for more details later and did implement some of what I had advised. Just a few days back I got a message from her that she was now selling in a week what earlier took her more than a month to sell. And this, while she had not fully been able to implement everything as yet (I had recommended automating some things by implementing available software solutions and a few other things that she was still in the process of finalizing).

I have altered the story here a bit for the sake of simplicity and as I don’t want to name any one person or brand but this is not the first time I had met sellers like her. I have been approached by seller’s time & again, some existing brands and some new ones, and the issues is the same. Excited by the digital story they go out and list items on marketplaces, but sales don’t really grow much. Some had even tried starting their own e-commerce websites and some form of marketing too but it had not really helped.

The key problem with most of such sellers in the online space whose business I have helped turn around, is that they thought all they needed to do was to list. Of course there are other issues such as delivery and handling returns and customer feedback etc. but not selling is what I found common to most. And that is critical.

So if you are a seller who is struggling to grow sales on marketplaces, my first input to you is “Don’t just list. Sell.”

Tuesday, June 7, 2016

Should you outsource your online marketplace sales?

An article in the ET today talked about how marketplaces are turning to advertising as a way to increase revenues. It also talked about how smaller sellers are turning to online distributors to manage their online marketing & sales.

The first part about marketplaces opening up advertising for sellers and brands was a given and bound to happen soon. Amazon has been doing this very successfully in the other markets for some years and now in India too. It is a win-win for both and other marketplaces have to follow. Its logical and it works for the marketplace, the seller as well as the customer.

As regards the second part where sellers are outsourcing their online marketing and sales, that’s the part I want to talk about today.

About two years back, in July 2014 I had written a blog post “How to sell your products online” to help people get on to selling on marketplaces. Sometime in August the same year I had written another post “How to increase your online sales” to help sellers understand the importance of analytics and marketing.

The basics are still valid, but the number of people trying to sell online in this span of 2 years has grown multi-fold. Competition has also thus grown. Not only are there more sellers, but there are also more robust and multiple marketplaces. There were not many experienced third party online marketers in India offering online management of marketplace sales at that point in time, and those that were, had just started. Same was the case with third party software to manage inventory and sales across marketplaces in India.

Selling online and specially so at marketplaces, though simple can be daunting for a newbie as they get started. It takes, time, manpower, analytics and of course some common sense apart from money. Let’s face it, first time online sellers or small sellers find it difficult to get their products online and selling, and specially so in a market like India where knowledge and experience of online sales is limited. The fact that these people are not just giving up, but turning to businesses which specialize in this, is a good sign. And that such businesses are growing, is also a good sign.

What sellers must however keep in mind is that selling online is like opening a retail shop in a mall but a virtual one. And whatever you do, if you are a serious long term player, then outsourcing all your retail outlets at all the malls for a longer period may not really work that well. You have to manage your stock, your price, your customer experience and feedback and use it all to learn and grow your business and grow your customer base. That can only happen if you run at least a one such store yourself, then a few more, understand the dynamics of how it works and apply it to other such stores as you open them.

How does one sell online? By cataloging the products well - the title, the description, the images, the price and the description and keywords. By marketing. Then monitoring & analysing the results and tweaking all of these based on the customer response. Deciding on stocks and procurement and product innovations. Monitoring and responding to the reviews and ratings. Ensuring timely delivery and managing returns. Monitoring the competition on a regular ongoing basis and building your strategy. Monitoring sales and price point triggers. Taking all this this information and using it to create better products. And a lot more.

Now tell me can a third party know your product or customer or competition better than you? Can they understand the seasons, and buying patterns & behavior for your products better than you? Can they internalize this knowledge to make or source better products or its variants and respond to the customer better? Can they be as committed to your long term success as you?

Yes, they would understand the nuances and technicalities of the front end and back end better, they would be more adept at using software to manage inventory and logistics. They would have the knowledge of selling multiple kinds of products across marketplaces and hence would know tips and tricks better, and may also have better relationships with the marketing managers at some of the marketplaces. So, you do need the technical expertise that they possess. But online selling is a combination of product knowledge, customer knowledge, technology, warehousing delivery and logistics, CRM, analytics, and marketing.

So my suggestion to all people starting or wanting to start now is to start small yourself, or by outsourcing, but learn fast and move it in-house as soon as possible. And learn all the way. Finally, only you can understand your own products, market and consumer as well as you do. Slowly build a team of people who can master the software to manage your sales, inventory & logistics. So if you want to really do this well and do this long term, then at the right time take it in house. Use the right software and build a team to manage your online sales. If you are also selling offline, then integrate the two teams so that learning from one can easily flow across to the other and both can leverage on each other’s strengths to increase business.

Do it slowly if required, but do it well. Learn, adapt, use all the software available to automate as much as you can. Online sales is here to stay and will continue to grow over the years. It can help you reach markets you could not reach before and also give you information that you can use to create better products and brands. Internalize it.