Limitations and Benefits of Online Sales
An Online Shop is a shop like any other, the physical space (the premises) would be a little piece of the Internet, the hosting, that section where our shop is located and which can be accessed by anyone who passes in front of it, that is, millions of people. The number of people passing by is unlimited, but in order for those people to enter, they have to be called. Let’s forget about the idea that you set up an e-commerce, put the products in and that’s it. Online sales must be encouraged and promoted on the Internet, the pillars of which are the following:
- Search engine marketing (SEM)
- E-mail marketing
- Web positioning (SEO)
- Content marketing
- Social media marketing
- Online advertising
Even if you invest a decent budget in SEO and SEM, the overall costs of an online store are lower than those of a physical store. And I’m not saying with this that one should replace the other, but the reduced investment and the maintenance and targeted promotion means that online sales are no longer an alternative sales channel, but a mainstream channel. Recall that in 2012 online sales was the only sales channel that experienced a rise. More than 16% in this case. More than 5,000 M euros in the first half.
In addition Today we all have a mobile phone with internet connection, or an iPad or Tablet.
- Financial services: annual growth of 155%.
- Retail and stores: annual growth of 153%.
- Telecommunications and services: 121% growth
- Travel: 96% annual growth
The Food sector is in second position. Mobile commerce also accounts for 4.5% of total transactions, although what is really surprising is that the increase in turnover for each transaction is between 40 and 50% higher. The king of all mobile transactions is Apple with iPad. Although Android follows with very firm step overtaking Android to Iphone.
The trend is to look for the smart shopper: a woman between 25 and 35 years old who is essentially looking for fashion, electronics and travel; who buys an average of 1.6 times a month online, spending 42 euros on average on each purchase and mainly from your computer.
What products can be sold
In an online store you can sell anything you can imagine. From products to services. Perishable or non-perishable products. Emphasizing the organic products, there is a wide range of products on the market with a shelf life between a few days and years. Obviously perishable products must be given special treatment, as they must be at the customer’s home in a very short space of time 24 to 48 hours. How is this achieved? On the one hand with Drop Shipping, which we will talk about later, and on the other hand with a fluidity of communication between the producer and the seller. Returning to the question of what you can sell on the Internet: You can sell everything as long as there is a good sales strategy and planning behind it. Obviously there are countries in which there are commercial barriers, and in others there are sanitary barriers as well as food barriers, which must always be known and the producer must be qualified to be able to sell in these countries. (ICEX).
Organic products on the Internet and benefits to the producer
Until now the only sales channel for the producer of organic products was the wholesale. Selling to distributors who in turn sold the product to stores, or in some cases sold directly to stores. With this new sales channel, the sale to distributors is not forgotten, but the form of sale changes completely. There are those who take the risk of having their own online store, and there are those who limit themselves to serving online stores that sell their products. Obviously, the first form of sale you earn the margin of the online store, but you limit your products to a single store, and you will have to manage and promote it. The second way, the store is in charge of sales and promotion. Obviously it will promote the products it is most interested in. Most producers choose this second type of sale because you outsource more of the products as well as not incurring an investment. If there is no sale you get paid, serve and collect, so the benefits are substantial in addition to avoid and largely disappear unpaid.
A few days ago a study was presented in which it was certified that 95% of consumers say that the fruit they eat has no taste.
And other studies show that the luxury sector does not understand the crisis. Last year the online sale of luxury products grew by 25%. In 2012 about 212.000 M€. Let’s understand that organic products can be found within this target of products.
Pricing policy and distribution ethics
When a producer normally serves 20 boxes of a product, the price of those 20 boxes is different than if 1 box is served 20 consecutive days. MISTAKE. The person who buys 20 boxes may never buy more again. While the second example is a loyalty sale. Prices must always be according to the market, and online sales are no different in this sense. The online store must have a price that allows it to compete with others of the same kind. In this case if the producer has an own online sale of their products but also sells to different online stores, the price of their own products must be equal to or higher than those of any other online sale, of course within margins. If the store sees that you are selling a product that your customer can buy directly cheaper than on your website, you can stop offering that product because it is not interesting. Keep in mind that most stores that do drop shipping do not have stockage so it is very easy to switch between one product or another. What is in the interest of the producer? I will not be me who says it, but experience makes me see that most producers, organic or not, opt for the second form of sale, and equal distribution, in addition to putting prices on their website more expensive than in other online stores.
This form of sale is one of the most used in the USA and is proliferating and growing exponentially throughout the EU. It can be summarized in Buy without stock. That is to say. When the store receives an order, it is sent to the producer, the producer packs it and serves it to the customer. Normally, the store itself sends the courier to pick up the product, as their rate is lower than that of the producer. With this type of sale and shipping, we get to skip a step, so we save costs that can be passed on at a lower price to encourage more sales.
Can anyone do Drop Shipping? Well, on the one hand yes, because the adaptation is very simple. But to be able to do Drop Shipping you must be able to serve the products individually to the end customer. The sale in complete boxes disappears to sell in a unitary way. Obviously each manufacturer designs its packaging and packs. When Drop Shipping is done, the packaging must always be neutral. It is normal that the store provides some kind of stickers or boxes for that packaging, because when it is sent is not sending the producer, it is sending the store, the customer should never see the name of the producer, as far as possible. The store must provide the invoice that will be inserted inside the package, as well as the delivery note that will be attached to the package for shipping.
Brand image. Importance of service / Quality
Keep in mind that in an online store you can not touch the product, or smell it, or hear it, so we play everything to a sense, the sense of sight. That is why the product must have a strong corporate image, designed to please, or as we can say colloquially, to enter through the eyes. The images must always be of quality, no pixelated images, or made in an amateur way. Packaging is another section that takes on special importance. A product’s sale varies if the packaging is different. Sometimes a package that can count a few cents more makes the product can be sold much more expensive than in its original form, obtaining higher margins.
On the other hand, you must offer adequate information about the product you are selling. Short description and detailed description are the ones that take special relevance. WARNING, when we talk about descriptions, they are COMMERCIAL descriptions. In a commercial description you never put the analysis or nutritional values or all that, which obviously should go, but in a specific section. We return to the sense of sight. A good image makes them read the title, and want to know more about the product, without going deeper, they read the detailed description. I hope there are many people like that, but unfortunately, they are less than 5%. That’s why you have to offer a description that makes you want to have that product and if you can get the person to start salivating, it would be a guaranteed success. Pure psychology.
But you have to go a little further. A recent study published by Confianza Online, a company that audits and gives a seal of quality to companies revealed that most of the user complaints are with the Principle of Legality:
- Defective deliveries
- Lack of Stock
- Incidents in invoicing
- Delivery deadlines
- Returns / cancellations.
It is a data to make us reflect on the reality of consumers and make sales policies thinking about the end user.
However, an exhaustive analysis of the websites leads us to conclude that in terms of privacy and data protection, these are the main aspects where companies present the greatest non-compliance with respect to the legal framework that Confianza Online verifies within an E-commerce.
In this we can also lend a hand to companies that need it because it is mandatory that all companies that manage third party information and communicate files to third parties, or entities have to adapt your company to the Data Protection. We have had to catch up with all this. And just one recommendation: Be wary of a company that wants to sell you the adaptation to the LOPD through a training course subsidized by the Tripartite Foundation.
This foundation is pursuing it and making companies pay back the money in full.
In short, the online sale of organic products is the future, the future of today. It is no longer an alternative channel, it is a reality. The reality of TODAY