Focus on building your ecommerce business, not Amazon's

A couple of years ago, I worked with a merchant with a love/hate relationship with eBay. He used the analogy of being “addicted to eBay like a crack addict”.

He did a ton of business on eBay but that takes a ton of effort. His staff was constantly overwhelmed and worked on little else. They relied so heavily on eBay for sales, they were, in effect, addicted. He was afraid he couldn’t afford (or so it seemed) change.

Most importantly, he wasn’t able to focus on other, more profitable, ways to grow his business.

I covered some of the negative aspects of eBay on my personal blog a couple weeks ago.  

But how about selling on Amazon’s seller central? That’s totally different, right?

I mean, how could it be anything but positive? You get to sell to Amazon’s vast customer base, don’t have to pay a penny until something sells and don’t have to deal with eBay’s demanding and cheap users.

Well, just like your mother once told you, there is no such thing as a free lunch. And selling on Amazon’s seller central is no different.

To understand why, I need to explain my simplistic view of ecommerce. I believe there are three things to worry about:

1)      Exposure - Getting in front of as many of the right prospects as possible as cheaply as possible.

2)      Profitable Conversion - Maximizing the profit and revenue generated from those prospects

3)      Ownership - Maybe the most important - is getting them to buy from you again and again and again.

Well, how does Amazon match up?

1)      Exposure? A+ There is nothing like Amazon’s installed base.

2)      Profitable Conversion? Hmmm…. A little more mixed. There are tons of ways to be creative on Seller’s Central, but at the end of the day, you are competing on price. After including your commission, you aren’t making a ton and what worse, most of the cross-selling and up selling opportunities all belong to Amazon.

3)      Ownership? F- Basically, you are paying a 15% commission to build Amazon’s business. You do a great job of customer service and offer a product at a great deal? Great! Amazon’s relationship with that customer just got deeper.

The problem is that it all looks easy. It all seems so predictable.  You list products; you ship products and you collect the money from Amazon.

But you aren’t building your own business. Think about it – in essence, you are an interchangeable fulfillment house for Amazon.  They can (and will) replace you in a blink of an eye.

I have a friend who had some temporary issues with his warehouse outside his control. Despite a couple years of stellar service, Amazon shut him down overnight.

He ended up not just laying off his employees but declaring bankruptcy.

If he had been building his web business, the warehouse issue still would have been painful. He would have lost some customers, but he would still be in business today.

So sure, keep selling on Amazon, but don’t forget to build the rest of your business.

And my friend addicted to eBay? I just talked with him. He is doing great. He’s broken his eBay addiction and business is better (and more solid) than ever.

Isn’t ecommerce architecture monitoring as simple as making sure your site is up?

We don’t think that’s good enough.

Here’s why:

Imagine going your site is up and running fine, but your payment gateway is down. Customers are adding items to their cart but can’t check out. It’s costing you sales and what’s worse, nobody knows.

Or

Imagine being frustrated and angry on a Tuesday morning. You just found out that your $5 shipping promotion was fat-fingered in as a $500 shipping promotion. It’s cost you thousands of dollars in sales over a long holiday weekend that are gone forever.

Or

Imagine your new PPC campaign is humming along and orders are pouring in but your fulfillment house isn’t keeping up. Products aren’t being shipped. Customers are getting frustrated. You are paying tons of money to acquire customers who will never want to do business with you again. And what’s worse, again, you don’t know….yet.

Those scenarios illustrate why we provide four levels of monitoring in our MaxEXP ecommerce infrastructure.

1.  We use KeyNote to make sure the site is up and performing within established performance metrics. KeyNote, which is also used by Cisco and eBay, checks your site from multiple servers around the US. If your site is down or being sluggish, KeyNote will alert us so we can fix the problem.
2. We perform tests to make sure that system and integration points are up and running. Is Verisign’s payment gateway working? Yup. Is your integration with your ERP system working? Yes. Is FedEx working? No? That’s ok we set up a contingency to use flat rate shipping (or whatever you want) instead.
3. We check to make sure that sales are happening at expected levels. If sales dip below what is normal, we fire off an alert and take action. Normal is defined by historical sales volume over the past year and takes into consideration your growth rates and personal threshold levels.
4. We make sure you logistic processes are working. Are orders sent to fulfillment shipping? Are you getting confirmation numbers? Are all order status’s what they are expected to be? We run checks that find orders that have fallen through the cracks. Repeat & referral business is the life blood of ecommerce and we make sure your standards are being met.
   

So you can see, there really is more to ecommerce architecture monitoring than just checking to see the site is still up.

No, this isn't about a new service being offered (at least not yet).

Andy Hagans wrote about companies that post overly positive reviews about themselves that sound too good to be true.

When he reads something like this:

“I don’t know what the other reviewers are talking about!!! My room was spotless and the decor was beautiful. The management was extremely helpful and gave me everything I could have possibly needed. The nice owner, Lisa, even gave me tips on sightseeing. I can’t believe how cheap their rates are!! Stay here and you won’t regret it!!!!”

His first reaction is to GAG!!!

It's not fooling anybody. Being the obsessive optimizer that he is, Andy couldn't help himself. Of course, he offered suggestions on how to do FRO (Fake Review Optimization) or fake reviews that work.

Facebook introduced Facebook ads which promises to turn their tremendous growth into cash.  They described it as:

an ad system for businesses to connect with users and target advertising to the exact audiences they want. Through Facebook Ads, these users can now learn about new businesses, brands and products through the trusted referrals of their friends.
 
and:

Facebook’s ad system serves Social Ads that combine social actions from your friends – such as a purchase of a product or review of a restaurant – with an advertiser’s message. This enables advertisers to deliver more tailored and relevant ads to Facebook users that now include information from their friends so they can make more informed decisions. No personally identifiable information is shared with an advertiser in creating a Social Ad.

Social Ads can appear either within a user’s News Feed as sponsored content or in the ad space along the left side of the site.

Will this prove to be the home run that adwords was for Google? Time will tell, but I wouldn't wait to test the waters.

Can bad reviews actually be a good thing?

Yes, according to a study done by Adweek. Customers considerably prefer eCommerce sites with ratings and reviews over eCommerce sites without them, however this is only true if there is negative feedback among the reviews. 

Without negative reviews consumers begin to doubt their validity, as well as their overall trust in the company.  Negative reviews are also necessary for consumers during the purchasing process so that they can work through concerns they may have before purchasing. 

If they don’t find answers on your site they will find it somewhere else.  So make sure your site’s ratings and reviews are as credible as possible by minimizing the number of reviews that your site filters.