The 99p culture

[scotserve]

I have been around e-commerce for a long time and dropshipping for about 2.5 years and see a worrying trend
Cut price selling at any level to make the sale, where the sale is everything, this is compounded by many "dropshippers"who encourage the sale rather than the profit.

We could all flip burgers for £5 an hour but wont because we know we are worth more than that, yet when it comes to online sales many people are operating at literally pennies an hour, sure in the early days you may have to forgo some income to get the business established but IMHO if you are still doing that in 12 months time then you are doing something wrong.

I mentioned the 99p culture but what i mean by that is the people that see ebay as the only sales medium and sell £50 items for £1 nett profit, lets take what many would consider to be an acceptable income say £10k - if you are selling goods at £1 with a 25% nett profit then you need to be selling 40k items a year, people are not doing their sums - most shops work on around 100% mark up - or 50% profit margin ( learn to define these ) but in my experience dropshippers are operating at seriously lower values and in many cases they are not commercially viable.

Ebay and the great god Google are not the be all and end all of online sales, sure it is a "cheap" way to market but it is an expensive way to profit - anyone that thinks they can buy an off the shelf package for £50 and make a fortune is seriously limited in grey cells, those that do would have made it a success by any method.

Oh one final point feeds - don't get me started on this - lazy mans business, feeds for stock levels are fine but most use the feeds to populate the site - wrong in so many ways!! all you do is duplicate content - downscore your SEO and make price comparison simple for your buyers, if you must use feeds create your own content and never ever use the stock numbers used by your supplier.

   

[Rainee Bows]

I agree with regards to the feeds, we use the feeds initially to feed the stores and they will pull and track new items and price changes, but we do encourage out customers to change titles, add better descriptions etc, all of our feeds are full customisable, we have a fair few customers that have taken the time to personalise their feeds and do not duplicate supplier content, they are doing well as a result. I'm afraid there will ALWAYS be the customers that will take the attitude that they dont NEED to put effort into selling online, many forget that online retail IS still retail and that its customers they need to attract and keep.

At times im completely at a loss as to the thought processes people follow when it comes to selling online.

We also encourage people not to rely on ebay, ebay in my opinion has been a dead duck for a few years now, its not a platform for making money as a small business , it's only use is as a traffic source, but that takes far more thought than many are willing to put into it



time and time again we tell people not to make price their only selling point ...... Deaf ears ;o)


Rainee x

[FionaJMD]

I found this a very interesting read.  I have a major issue with selling and price setting - part of it is a self confidence thing - why would someone want to spend that much on smething I have made - but I am getting over that.

My main problem is that some people do crafting as a habby and sell for virtually what the materials have cost them - their time is obviously free!  This then may make my items appear expensive.

I have put a lot into my business in terms of research and looking to charge a fair price for a quality product - I have my own hallmark registered in Edinburgh so all my Sterling Silver is hallmarked saying it is made by me.

The other issue I have with some other crafters, is they dont seem to be aware of their legal requirements - how many know that it is against the law to say it is Sterling Silver if it is not hallmarked!

[Baa]

I agree, there are too many example of this happening but in some cases low prices are not actually gaining as much sales as the normal higher prices. So it's pointless.

I have written quite a long article about this. I still see retailers underselling and I know they aren't making the sales. I can't seem to convince them to bump up their prices. All they are doing is devaluing the products and not making sales.

The other problem is when you get a reasonable customer base, it's much hard to put your prices up than to bring them down. It's just not worth the trouble.

The other issue I have with some other crafters, is they dont seem to be aware of their legal requirements - how many know that it is against the law to say it is Sterling Silver if it is not hallmarked!

Thats common to a lot of new jewellers and they are unaware that quite a few suppliers don't send items to an assay office, suppliers don't have to as a B2B transaction. Many new retailers think the number is enough, I often see items advertised on eBay as hallmarked when it's just a 925/375 etc stamp.

But not everything has to be hallmarked, only items above the exempt weights and you can legally sell items under the exempt weights as silver, gold, platinum or palladium.

[FionaJMD]

The other issue I have with some other crafters, is they dont seem to be aware of their legal requirements - how many know that it is against the law to say it is Sterling Silver if it is not hallmarked!

Thats common to a lot of new jewellers and they are unaware that quite a few suppliers don't send items to an assay office, suppliers don't have to as a B2B transaction. Many new retailers think the number is enough, I often see items advertised on eBay as hallmarked when it's just a 925/375 etc stamp.

But not everything has to be hallmarked, only items above the exempt weights and you can legally sell items under the exempt weights as silver, gold, platinum or palladium.

The weight for Sterling silver is 7.78g which is not very much.

I know the suppliers dont hallmark things other than the 925 etc.  But as makers to sell a completed piece and say it is sterling silver when it is above 7.78g and un hallmarked is against the law.

I thought it would be enough that I have tracking information that my supplies came from a reputable company and they were ss but apparently not.  I went all through this with the Assay office in the Summer last year.

But we digress LOL.

[scotserve]

I have a major issue with selling and price setting - part of it is a self confidence thing

You probably dont know just how universal that is within the small business sector
I have seen people almost apologising for selling, while you can go the opposite way and market like a double gazing salesman on steroids, the point is you are in business to make money and there is two ways to do it - either by overbearing sales and run method or by customer service, in the ofrmer price is often a factor but diminishes in the latter - look at a recession many of the upmarket businesses survive because they .a much better financial footing to survive the downturn.

Its your business sell yourself and your products with pride and your products will set their own price. 

[Baa]

I know the suppliers dont hallmark things other than the 925 etc.  But as makers to sell a completed piece and say it is sterling silver when it is above 7.78g and un hallmarked is against the law.

Some of us ensure there is a hallmark where it is required. But I agree this is way off topic, perhaps we can continue on another thread.

either by overbearing sales and run method or by customer service, in the ofrmer price is often a factor but diminishes in the latter - look at a recession many of the upmarket businesses survive because they .a much better financial footing to survive the downturn.

You've just reminded me of something I read about retail psychology and recession a while ago now.

The suggestion was that people tend not to splurge on a new telly just because the colour of the box has gone out of fashion but they save up and treat themselves with little luxury purchases. The writer was claiming that in the 80s the move from the greasy spoon (booo, loved those places) to these themed restaurants, fancy fillings in sandwiches and later specialist cafes were all part of that little and often treat system.

It would be interesting to see figures about what has happened since 2007 where we dip in and out of recessions.

[seamus]

theres been a few studies as to peoples buying habits,
men tend to pay more for products and spend less time choosing things, having the opinion that the more expensive an item is, the better quality it must be,
women tend to take their time with their purchases and like to go for offers, but there is a common factor regardless of gender, age etc, people tend to look for the "right" price, this doesnt mean the cheapest, infact if the product is cheaper than what they would expect to pay, the chances are no one will buy it thinking there must be a catch or its of inferior quality.

Keeping your products priced at an expected value will generate way more sales that trying to undercut everyone else, the "just right" price is how people tend to buy, they will seek out an item and buy the one priced closest to the price they think the item is worth, if its too cheap, they wont buy.
Confidence, thats another angle people look at, is the seller trust worthy, do they appear to be a legit seller, does the site design seem professional and in tune with the products being sold, etc.
Quite a lot of that is subconscious, but its worth noting and using in your site setup

pricing your stock at the appropriate rate and having a shopfront that inspires confidence will do way more good that trying to engage in a price war with your competitors.

[scotserve]

About 8 years ago I got into an argument on a "hosting" forum

I had mentioned that at that time I charged £25 for a domain name - I was accused of all sorts, how I was ripping people off and that it was disgraceful ( however my customers will know that I take the time to offer advice before and after the event including the legal issues )
One really obnoxious a-hole got on the holier than thou platform and announced he only made 10c on a domain name and that he had now sold 200 - I then pointed out I had sold 4K and turned over £100k  compared to his $20 profit
I have customers dating back to 1997 all off whom I would expect they know they could buy cheaper but they dont, we are far from the cheapest ( long long way ) but even so I know I could double my current pricing and still retain 95% of my clients ( dont panic i wont )

The point is pricing is subjective if you sell cheap thats all you will ever do - it is so difficult to get out of the rut, if you are attracting the people in the first instance with cheap pricing then thats a whole new clientele that you need to gain once you move up market.

IMO Pricing is all in your head it should be enough to make your busiiness profitable and provide a high level of customer care and not something you feel you need to compete on   

[FionaJMD]

About 8 years ago I got into an argument on a "hosting" forum

I had mentioned that at that time I charged £25 for a domain name - I was accused of all sorts, how I was ripping people off and that it was disgraceful ( however my customers will know that I take the time to offer advice before and after the event including the legal issues )
One really obnoxious a-hole got on the holier than thou platform and announced he only made 10c on a domain name and that he had now sold 200 - I then pointed out I had sold 4K and turned over £100k  compared to his $20 profit
I have customers dating back to 1997 all off whom I would expect they know they could buy cheaper but they dont, we are far from the cheapest ( long long way ) but even so I know I could double my current pricing and still retain 95% of my clients ( dont panic i wont )

The point is pricing is subjective if you sell cheap thats all you will ever do - it is so difficult to get out of the rut, if you are attracting the people in the first instance with cheap pricing then thats a whole new clientele that you need to gain once you move up market.

IMO Pricing is all in your head it should be enough to make your busiiness profitable and provide a high level of customer care and not something you feel you need to compete on   

This is fabulous advice.

I now have a formula that I use to set my prices and I think my work is worth it without being outrageous.  A fair price for a fair days work as they say!

[stevread1]

Oh one final point feeds - don't get me started on this - lazy mans business, feeds for stock levels are fine but most use the feeds to populate the site - wrong in so many ways!! all you do is duplicate content - downscore your SEO and make price comparison simple for your buyers, if you must use feeds create your own content and never ever use the stock numbers used by your supplier.

   
The main problem we have with this is that if we update the feed every day and if we change descriptions they automatically change back every time we update the feed. With over 500 products it would be impossible to check manually every day stock levels new products etc. But we have also being supplementing with our own products from different sources to make our content more original.

Totally agree with the other point why do people do this, it pointless driving prices down to the point were you gota make hundreds of sales to make a worthwhile profit and bet then they couldnt keep up with demand.

[Rainee Bows]

to me theres no point using a feed you cannot manipulate  ..... but thats a whole new topic ... lol

Rainee x

[stevread1]

Thats o.k but gota stick with what ive got at the moment 

[scotserve]

Biggest problem with a feed is you are relying on the dropshipper to have the info correct, most sites fail to create terms and conditions to aleviate the problem with wrong pricing and leave themselves wide open, that item on the feed feed at 20p when it should have been £20 could cost you dearly if you have just copied terms from another site somewhere and failed to fully protect yourself from incorrect pricing as by default the contract is in place when the goods are paid for, that and duplicate content- just copy one of your products into google and see what comes up - immediately your increaing competition 10 fold

[Rainee Bows]

im seeing your point scotty, but i cant be arsed repeating myself and going round in circles

Rainee x