'E-Commerce' Entries ↓

Clean Off The Dust And Ship It!

What is DustyMoto? A particularly harsh desert race in Arizona? A porn star from the 70’s with a predilection for motorcycle apparel? Actually, DustyMoto is one of the most innovative companies that I’ve come across in our industry and one that you should absolutely be signed up for and using.

DustyMoto is a web-based service that creates a virtual warehouse in “the cloud” that is composed of all the inventory with nine months of no sales held at its participating dealers. When a dealer has demand for a part they don’t have, rather than order it from the OEM, they order it through DustyMoto, and the part is shipped from one of the dealers in the network that has it as excess or obsolete inventory.

Let me rewind and explain what all that means.  First, a virtual warehouse in the “cloud” means that all of the product that DustyMoto shows as available in their system is not sitting in a big physical warehouse somewhere (if it was, it would be pretty big as DustyMoto’s CEO Bobby Franklin told me that they currently have around $45 million in inventory). All of the inventory is being held at participating dealers around the country. “The Cloud” is the term that has been developed in the internet application space to refer to data storage and processing capability that is not housed on any one machine. It’s physically spread all over the place but the application or database appears as one unified entity (Google’s App Engine or Amazon’s S3 for example).

The inventory in the system is typically all stuff that is at least 9months old. According to DustyMoto, studies show that if a part is on your shelf with no sales activity for 9 months, odds are really, really good that it’s going to be there for a birthday or two before you finally pitch it or it ends up on eBay for pennies on the dollar. DustyMoto makes it’s money off a small commission/fee to the seller, currently 15%. Considering that most shops eventually blow out old inventory at levels much steeper than 15%, and typically after incurring carrying costs that add up to way more than that over a year or two, 15% seems reasonable.

Another nice aspect for the seller is that all parts are sold at current dealer cost (the same cost in your price files). That means that it’s possible that you may have paid $100 for a part a year ago, but the part now sells from the OEM for $125, so DustyMoto transacts it for $125. You just made (or recouped carrying costs) $25 on that part.

This is the type of brilliant idea that I’ve called for in several columns over the years. Although in my naivete I thought that it would have been driven by the distributors or OEM’s. Bobby from DustyMoto sent my thinking straight on that one. He explained that the OEM’s and Disti’s have zero interest in making the supply chain or inventory management efficient across the industry. In fact, it’s in their best interest to stuff inventory into the channel with the ferocity of a farmer cramming feed into a goose for foi gras.

When I pointed out that inventory carrying costs were one of the largest contributors to dealers having financial hard-times, and wouldn’t it be in the OEM’s interest to do what they can to make their dealers more healthy. I could sense Bobby rolling his eyes over the phone as he explained to me that if that dealer dies off, it’s an opportunity for the OEM to shove inventory into another empty parts department in the dealership that steps in to take the dead one’s place. My, what a healthy industry we have…

With those market dynamics in place, it’s imperative that dealers and retailers in our industry use all the tools available to make ourselves as self-sufficient and profitable as possible. Think of DustyMoto as a Co-Op that allows all of the dealers in the country to work together to make the entire industry more efficient, effective, and healthy.

Think about it… How much old inventory do you have on your shelves that you just know someone, somewhere, is ordering brand new from the OEM…? How many times do you order a part for an older bike that you just know has been sitting on some poor sucker’s shelf two states over for the last three years? DustyMoto is in place to solve these very real problems

I’d like to see DustyMoto’s capability built into every major DMS system out there. When you add a part to an invoice that is not in stock at your shop, it should query DustyMoto’s servers first, before that special order goes to the OEM or distributor. It should be seemless. If DustyMoto has not already begun working on an integration with folks like Ziios (see Arlo’s recent article on Ziios openness to integration and extension) they are missing the boat. If DustyMoto and Ziios offer that capability, then ADP better get on board as well.

I honestly believe that if DustyMoto plays it’s cards right, they have the ability to radically transform a major aspect of our business thus making everyone at the retail level a lot better off. And like all networks, the more nodes, or participants, the better it will all work.

I think one of the biggest risks to their success is if one of the major DMS players steps in and sets up a competing network (which is not just bad for DustyMoto, but bad for the idea as a whole because now you have inventory split into multiple exclusive networks).

I also think that DustyMoto needs to implement a type of credit system that rewards buying from the network. Sure, everyone wants to unload their old stuff, but I think there needs to be an incentive system that can help re-train the behaviors of parts managers to not just order from the OEM or distributor first without checking DustyMoto’s system (again, integration into the DMS will help alleviate this). Maybe a system that the more you buy from the network, the lower commission rate you have to pay when you need to unload your own old stuff?

After a year that had me writing a few columns and blog posts that made me sad or mad about things going on in this industry, I’m happy to be able to finish up my year with a column that is as hopeful for what may be ahead for our industry as this one.

Now go sign up!

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I Found Waldo!

…And he just checked in to your shop on Facebook Places. Or on Gowalla… Or FourSquare… Or Loopt… Or Yelp… Or any number of “location based social networking” clones that are popping up all over the interwebs.

What are these sites/services? How do they work? Who uses them? Why should you care? This month I’m going to make an attempt to give you a primer on the subject that makes at least a rough pass on those questions.

Basically, the core of the idea is that now that people have gotten used to the idea of social networking by using sites like Facebook and LinkedIn, and a lot of those people are using “smart phones” that have fast(ish) connection to the internet and have some method of determining where you are physically located (GPS, cell-tower triangulation, etc.) it was natural that someone would come along and make the big connection: Combine the social networking experience with location-aware features while providing opportunity for the business location to participate. Except for the creepy stalker / exhibitionist aspect of the whole thing, it’s pretty brilliant…

Here’s a (by no means exhaustive) list of sites that play in this space:

Here’s how most of these types of services work. You sign up for an account with a site like FourSquare (www.foursquare.com). When you go someplace (a restaurant, a concert, a club) you use the application on your iPhone (or whatever device you have that is supported) to “check in.” You’re basically broadcasting to your social network (or at least the part of your social network that is using the same service you are) a message that says “Hey I’m HERE!” (and when I think about it cynically, you’re also saying to any potential robbers, “My apartment is empty, go for it!”). From there, depending on the service/site, a lot of other things can happen. If you have “friends” that are on the same location-aware social network, and they have also checked in, you can basically hook up, you can earn loyalty points (which I’ll go into later) from the business, etc.

So far, the big dog in this space has been FourSquare. They were the first big player that developed a large user base, got a lot of press, and captured the hearts of the VC’s. However, now that the concept is starting to prove itself, the really big dogs in the main-stream social networking space like Facebook (with Facebook Places) are starting to roll “check-in” functionality into their service offerings. It seems to me that now that Facebook is playing in this pool, where most people already have their social graph, sites like FourSquare are going to have a lot less room to move around. That is assuming that Facebook doesn’t eventually blow itself up due to privacy concerns.

Most of these location-based social sites like FourSquare have methods to provide incentives to people that check into a location a lot. The idea works like this: Business A has an account with the location-based social service and “claims” their business. Business A provides incentives (special services, discounts, free stuff, etc.) to people that meet certain levels of participation. For example, with FourSquare a user can earn points the more they check into the same location. Earning more points leads to various “badges” that tell the world “I’m a regular.” With FourSquare folks aspire to be a location’s “mayor.” Typically a business owner will provide more perks the higher up the ladder a user goes.

By themselves these location-based social services can be thought of like a game. But where they should be interesting to you is as a means to advertise your business, participate in the various ecosystems that will develop around these growing social networks, reward loyal customers, and so on.

Sites like FourSquare, Gowalla (gowalla.com), etc. are hot right now as companies look for more effective ways to use social networking tools and sites to market their businesses and make money. At the most recent Search Engine Strategies conference I just attended in San Francisco, it was very clear that businesses are becoming more and more disenchanted with the typical paid search advertising (if you purchase Google Ad Words, you know that our industry has managed to jack up relevant keyword prices to levels that are just goofy…). Display ads and other content network ads are proving to be very costly and difficult to measure except for companies that can afford complicated advertising attribution tools and services. Advertising on social sites like Facebook is reportedly not very effective for a lot of companies. Companies see the advertising and marketing opportunities that these new social networking sites offer because they mostly hinge around actually having live customers physically in their store. These sites/services may finally be the holy grail union between local, web, and social people have been waiting for. Or they may be just another flash in the pan web sensation that caters to narcissistic exhibitionists… Who knows? Some folks thought TV was a fad.

You should already be able to envision ways that you can leverage the functionality these sites provide for your dealership. Especially if your shop has, or could be made to have, a reason for people to hang out. You could also partner with establishments in your area that are hot hang-outs for riders. Here’s something to get the ball rolling around in your head: If you live close to a track, partner with the operators by offering free oil changes or something like that to the trackday-rat “mayor” of that facility. It’s a safe bet that a lot of tracks, especially ones that sit empty quite often, don’t have owners or operators that are even bothering to “claim” their business in sites like FourSquare, Yelp, etc.. Offer to step in and do it for them! I’m sure once you start using these things, more brilliant ideas will come to you.

In closing, I recommend that you keep a close eye on this area of the social web. It’s attracting a lot of attention, companies playing in this space are raising a lot of money from VC’s, and it’s already starting to develop some technical extensions and meta-level technologies that hope to provide additional value to the participants. An example of this is TopGuest (www.topguest.com) that links “check in’s” with a user’s loyalty programs (frequent flyer program for example) allowing them to earn points.

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We Need To Talk

We need to talk. All of us. Everyone in this industry needs to be talking to each other a lot more than we currently do. Sure there’s the occasional show where we all get together like DealerExpo and there’s the inevitable gripe-session that is sure to break out whenever a few dealer principals get together at an OEM show or 20 group meeting. What I’m talking about here is more of an ongoing, broad-based, industry wide series of conversations about the important issues that affect us every day.

Once again, the internet can step in to help. If there’s one thing that the internet is great at it’s providing a common, albeit virtual, meeting space where like minds can get together and discuss whatever hot issues are top of mind.

I’m sure a lot of you are part of a 20 group and recognize that quite often these gatherings are great places to share and discover new ideas that have potential to improve your business or even help grow our industry as a whole. Some of you may even have an email list where you keep those discussions going. I’d like to propose that as an industry we expand that idea and start taking advantage of some of the discussion forums that already exist.

I’m going to focus on two specific places where I recommend we all start gathering and having some lively discussions.

The first is LinkedIn. If you’re not on LinkedIn already, you really need to be. Linkedin is pretty much the best professional social networking site out there right now. In addition to it’s potential to build a network, LinkedIn has a feature called Groups. Groups are like mini-forums built right into the LinkedIn framework. A big part of these groups are the discussions and that’s what I’m really focusing on here.

There are already some great groups on LinkedIn aimed at our industry. In fact, it was the discussion from a few months ago about vendors competing with their own customers (prompted by Arlo’s blog posts at DealerNews) that really motivated me to write last month’s column. But what’s really lacking is a lot more members and a lot more active discussions of issues that really affect everyone: MAP policies, national and state legislation, general business issues, and just general brainstorming.

Here are a few of my suggestions about groups to join. These were picked because they focus on our industry and as of this writing they have the more members than some of the other groups. I don’t have any stake beyond wanting to push toward a critical mass of users to make the groups more useful.

The first is Motorcycle Industry Professionals. This group is a pretty high-level group that covers more than just dealers. It already has over 1,000 members and it has hosted a few pretty good discussions.

Next up is the Motorcycle OEM Network. This is a good group to be in if the goal is to engage in some constructive conversations between the OEM’s and their dealers.

Wrapping up LinkedIn we have the most obvious, the Motorcycle Dealers Group. Unfortunately this group only has about 100 members currently and for the sake of this month’s column, it’s the one I want to see really bloom.

Finally, we have Dealernews’ own Shop Talk. You really should be a member of this social network because you’ll also be kept informed of blog posts from the Dealernews staff as well as other important information from Dealernews.

So now that you’ve signed up, start participating! Ask questions… What impact are e-bikes going to have on our industry? What kinds of features should the ultimate DMS system have? What kinds of parking lot events are folks running that break the mold of the tired-out “open house”? If you see a question or discussion that you can provide valuable insight, jump in!

So now we’re left with the big questions of “why?” Why do I want to poke, prod, and encourage all of you to participate in these discussion forums? The answer is because I want to make sure that our industry sticks around as long as possible. I want the fundamental structure of small and medium sized dealerships to be able to compete with the growing threat of mega-online shopping sites, direct to consumer sales from PG&A manufactures and vehicle OEM’s. I’m positive that if we can start raising and answering more and more questions and addressing more and more issues that are pressing on our businesses as a collective business unit, the stronger we can be.

In the absence of a strong, nationwide, dealership-focused trade organization that has a vibrant and active membership, maybe we can build it ourselves using the amazing potential of existing social networking sites like LinkedIn and Dealernews’ ShopTalk. Fingers crossed!

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Supply Chain Of Pain

This month I’m going to dive into a topic that I believe will be one of the most important factors contributing to the long-term viability of the business model that drives our industry. That topic is the retail supply chain in our industry. Specifically the issue of suppliers that sell direct to your customers.

Long before I got into the e-commerce and internet marketing racket or got professionally involved in the powersports industry I received my college degree in what’s now called (but wasn’t yet widely known as) supply chain management. Combining that education with a lifetime of being a computer geek, and being smack dab in the middle of the dot-com boom in Silicon Valley in the middle and late 90′s has provided me with a rather unique perspective with regards to how the internet and related technologies relate to doing business on the web.

Some of my first thoughts when e-commerce burst on the scene back in the dark ages of the web was that the internet was obviously going to have a tremendous disintermediation effect on pretty much every facet of the traditional supply chain. In a nutshell, disintermediation is the process of removing “links” in the supply chain.

Low and behold through a series of twists and turns in my schizophrenic career path I end up with the amazing opportunity to watch, comment on, and participate in the very phenomenon! Not only do I have this opportunity, I have it in an industry that has been so benighted, backwards, and generally late to the party when it comes to modern technology, modern business practices, and attitudes that it’s getting hit harder and faster than a lot of other industries ever were.

For background I direct you to an October 2009 post on  Dealernews’ blog by editor Arlo Redwine  entitled “Vendors That Compete Against Their Own Dealers“.

That post generated (relative to the majority of posts on the DN blog site) a large number of comments. I strongly suggest you go and read that post and the comments. While you’re there, take some time an offer your point of view on the subject. Our industry needs more dialog on these issues.

Arlo again touched on this issue in June with his excellent job of moving this along by offering an  introduction to Shopatron, a company that allows OEM’s to sell direct, but have the actual fulfillment handled by dealers that participate in the Shopatron program.
All of this has done an excellent job of laying out who some of the players are and the techniques they are using to transform the retail supply chain for (currently only) PG&A.
I want to spend a little time looking at why the OEM’s are doing what they are doing, what you need to be thinking about and more importantly how you can prepare for how all of this is going to shape our industry in the future.
First, one has to ask: “why the manufacturers are doing this in the first place?” Why would a manufacturer that has had a retail supply chain in place decide to radically alter that by selling direct to the consumer? Based on conversations I’ve had, things that I’ve read, and my own analysis, I think it comes down to the OEM’s not believing in either the long-term vitality or maybe even the long-term survival of the powersports industry’s retail supply chain.

Put simply OEM’s don’t feel that the traditional dealers are adequately meeting the market demand for their products. That can be in terms of gross numbers, product mix, whatever. The bottom line is that for OEM’s to make this move it’s a signal that they don’t trust the established retail channel to move enough product. An OEM that’s selling direct is saying to you, “you’re not getting the job done, so we’re going to work on cutting you out.”
Quite a few of the OEM’s that want to sell direct are currently willing to use services like Shopatron (or 50 Below’s “Referral E-Commerce” affiliate program for distributors), but I think they are only doing it for two reasons: self-serving interests and political cover.

The self-serving interests has to do with Shopatron’s stated policy that fulfilling dealers must have the product in stock in order to “bid.” This has the effect of forcing inventory deeper into the supply chain, pushing it down to the retailers that want to participate. This helps the OEM’s books by allowing them to recognize the revenue and get that inventory off their books freeing cash and increasing profits. Of course this also pushes the excess and obsolete risk to the dealer/retailer, eats up their cash, and violates pretty much every tenet of progressive, modern supply chain management principals. The deeper in the supply chain a product is carried the lower its utility and the higher its cost.

Paradoxically, the more “successful” Shopatron and the OEM are in getting dealers signed up, the more competition there is for each of these orders. As the deciding factor for who gets the order from the Shopatron system is based on the combination of having the item in stock and the physical proximity of the dealer to the customer we end up with more dealers/retailers carrying more and more inventory hoping to collect more and more of the crumbs that fall from the OEM’s table.

This is great news for the OEM’s (except for those that have generous inventory rotation or send-back policies. If there’s an OEM that has a no-questions asked, unlimited return policy that is also participating in Shopatron, I would argue that they need to fire whomever is running their channel strategy). The OEM’s now have an enticing carrot to get retailers to carry more of their inventory which is something that they have always seemingly wanted more than anything, even if in this time of relatively cheap expedited logistics it’s a stupid thing to do.

Of course if the retailers/dealers balk at taking a bite at the carrot and don’t sign up for Shopatron or don’t increase their stocking levels, the OEM will make the sale anyway (most of the time at full retail!).
The OEM’s can always defend their decision to sell direct by saying, “hey, we offered the olive branch of giving you the opportunity to participate in Shopatron and make this sale. Don’t be mad at us!”

Shopatron is win-win for the manufacturer. There is no downside for them, but there’s plenty of potential downside for the dealers. I’ve already brought up the issue of inventory liability. But what about direct competition?
Take for example a prominent vehicle OEM (we’ll call them BRANDX) which sells direct from its own Shopatron powered site shop.BRANDX.com.

Let’s say that I’m a dealer that has spent considerable time and energy building an e-commerce operation selling their stuff. That includes significant investment in things like SEO to make sure my site shows up high in the search results.

I’ve managed to get ranked in the top 5 for several BRANDX related keywords. Keep in mind that several studies have shown that as you move down the search engine results pages (SERPS) the chance of getting someone to click on you drop dramatically.

Now BRANDX comes along with a naturally highly ranked domain name (BRANDX.com) that is running its store at a subdomain (store.BRANDX.com). All of a sudden  my previous #5 rank in Google is #6 because BRANDX’s own site is ranked #5. Using some of my SEO tools that check search engine position, that has indeed happened. This is not a hypothetical. There are retailers/dealers that are indeed losing real online sales to their own OEM and by extension to a competing dealer that is participating in Shopatron or to the OEM themselves if it’s for a product that no one bids on in Shopatron.

Of course the situation is even more heinous if the manufacturer that’s selling direct is not using Shopatron or any other method to pass the sale on to its dealer/retail channel. If you are competing directly with a manufacturer for retail sales, you need to really question why you are doing business with them and selling their products. There may be some legitimate reasons to do so, but in our industry the way it is today, those reasons are few and far between.

Why have we gotten to this point? I believe that it comes down to the systematic failure of our industry to adequately develop a supply chain that meets the needs of the modern marketplace. That, combined with the fact that OEM’s, distributors’, and retailers’ motivations and incentives are often at best incompatible, if not downright counter-purpose. Mix in thousands and thousands of retailers/dealers that are all selling virtually undifferentiated products that are relatively low margin, high cost, and high-cube and you’ve got the situation we’re in now.

So what do we do about it? Well, the first thing you need to do is get signed up for Shopatron. That’s a 100% complete no-brainer. As long as it’s there, you need to sign up for it and monitor it for any orders that you can fulfill. Keep in mind that these are already lost sales. Only by being in Shopatron can you attempt to recapture them. Unless you have a strategic interest to really jump into Shopatron, I would not recommend increasing your inventory stocking levels until you get a feel for what the market is like for the brands and products. Just use Shopatron like a line in the water initially.

To conclude, I don’t think there’s necessarily anything overtly nefarious about Shopatron, or OEM’s trying to fulfill what they see as un-served or under-served demand in the market. OEM’s that I’ve talked to say that they have basically been pushed into this position as they have customers contacting them directly wanting to buy because they can’t find what they want in the retail channel. I just think that the current solution is at best a band-aid that still tips the playing field too far in the OEM’s and large retailer’s favor at the detriment of the rest of the dealers.

Ultimatly one of two things will happen: Better information systems and processes will be developed that allow real-time sharing of supply and demand information up and down and across the powersports supply chains to insure more efficent operations… Or… There will be less and less opportunity for the smaller dealerships and retailers that make up the current landscape.

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Kiosks – The silent salesmen in your shop

Imagine this scenario: You’ve survived the Great Recession. However to make it through the epic national blood-letting you had to dramatically reduce your shop’s staff. However, now that riding season is here you’ve got customers coming into your shop looking to buy gear or get information on vehicles. Unfortunatly, you don’t have the staff level required to give personal attention to everyone. What can you do to help mitigate this issue until you can get staffed up again?

Well, do you have a website? One of those fancy e-commerce enabled ones that you’ve never really been able to do a whole lot with or see a dramatic ROI?

Here’s this month’s mind-bending idea… Turn your web presence inside out! Set up a few obvious, friendly, comfortable locations in your dealership where customers can access your website and get information about vehicles, parts and gear.

The formal name for these would be Internet Kiosks. They are a great way to leverage a powerful asset that you are most likely not using to it’s full potential right now. It allows customers to do a certain amount of self-directed research or shopping in a similar way that they do now with a brochure (but you never run out) or with those stacks of parts catalogs (without all the counter clutter).

Kiosks are not just a band-aid for a lack of staff. They have proven to be worthwhile enough that major retailers like REI, Staples, and Best Buy have made them part of their stores. In addition to just having customers use the kiosks on their own, they are useful as a tool to have your parts or sales staff use with the customer.

By seeing how effective your site can be in a real-world scenario maybe you can justify spending the time and money to make your website even better. Merchandise your site and create useful product groupings to help customers in your shop and you’ll automatically have a website that will perform better out in its natural habitat of the internet.

So how would you pull this off? Well, there are companies that can provide you with ready-made internet kiosks (Google “internet kiosk manufacturer”) so you can just plug-and-play. If you have access to someone with adequate technical capability you could also whip these up yourself.

Browsers like Internet Explorer, Firefox, or Chrome all have the ability to be run in a Kiosk mode. Kiosk mode basically locks down the browser so that the user is very limited in what they can do. There’s no ability to access the OS, run other programs and so on.

A basic PC from Dell or HP that would be suitable can be had for a few hundred bucks. You can even go for one of those new touch-screen based all-in-one models. A fairly stylish computer stand from Ikea will set you back like another hundred bucks.

You could even pull off this idea with one of Apple’s new iPads. Regardless of the computing device you choose you’ll of course want to make sure the entire thing is secured to avoid having it walk out of your dealership.

And speaking of security, you’ll want to either install filtering software on the PC or control access at your store’s network router to limit the sites that the kiosks can access. You don’t want customers surfing porn or, worse yet, visiting competing dealer’s or retailer’s sites!

Finally you’ll want to communicate to your staff what’s up with the kiosks. Make it clear that you don’t see the kiosks as a way to replace the humans in shop. Educate your staff that the kiosks are a tool that they can use to actually improve customer interaction when they have the bandwidth or as a way to allow customers to do a little “self help” when things are crazy. It’s better than having customers wander aimlessly around your shop twiddling their fingers waiting for someone to help them.

Don’t let the lack of staff be the only reason you try out the kiosk idea. Many top retailers have found that having shopping kiosks are a great way to flesh out a full multi-channel retail strategy. Maybe you’ll discover you’ve been sitting on a secret gold mine all this time. You just needed to look at it differently!

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How to handle a social media hijacking

By now I think most of you reading this column have heeded the advice from my past columns and gotten onto the social media bandwagon in one form or another. You’ve got a Facebook fan page, a twitter account, maybe a MySpace page and if you’ve been really ambitious a blog or a forum. You’ve created a profile on Google Maps and Yelp where customers can post reviews. You’ve gotten out there in an attempt to make your business more visible. Unfortunately, that visibility can quickly turn you into a target.

Like so many things in life, there’s always the law of unintended consequences to deal with. The social media landscape is no less prone to subjecting you to this law. This month I’m going to address what happens when you get negative, harsh, or even intentionally hostile interactions on your social media channels.

In days gone by (a whopping 5 years ago or so) if a customer had a serious beef with your business, they were pretty much limited to things like the “We’re on your side” segment on the local news, a letter to the editor of your local paper or maybe a negative report to the BBB. These days it’s mind-bogglingly simple for a ticked-off person with an ax to grind to single-handily destroy, or at least seriously damage, your business’s online reputation. And a supreme irony here is that a lot of these soapboxes from which they shout were built by you!

There’s basically three variants of folks you’re going to have to deal with:

Category #1) The legitimately (at least to them) ill-treated customer that feels like they have not been able to get the resolution they want and has decided that they will “show you” and make the issue public.
Category #2) A person that is blatantly hijacking your public spaces or the web in general at the behest of a competitor.
Category #3) A common garden variety of internet troll.

I’ll give you some generally accepted methods to deal with each of these.

The first variety can be the most damaging if you deal with it badly. These are folks that have spent money with your business and feel that somehow they didn’t get the response they feel they deserved. Often these people have already talked to someone at your shop about their grievance (in person, phone, or email). That means if it gets to the point they are venting on your Facebook page or ripping you apart on Yelp your customer feedback process in the real world broke down. They left not just unsatisfied, but so pissed off that they have sworn a vendetta against you and by God they will personally see to it that not another living soul ever does business with you again (again, once upon a time there wasn’t that much one irate customer could do to you… Now all they need is a little time and know-how and this once idle threat can be alarmingly real).

There’s basically three outcomes from this kind of altercation. The first involves you taking a big step back to determine if this customer’s got a legitimate point. Not from your standpoint, but from the standpoint of a typical customer that is going to read what’s going on online. You may not like it, but customers have certain attitudes about what is and isn’t fair. Face it, you feel that way plenty of times. There’s always two sides to a story. Sure you can deny the guy’s extended warranty claim because of some small print, or sure the customer is supposed to deal with the manufacturer of that widget for repairs, but customers don’t always see it the way you want them to.

If you decide that it’s best to appease this irate individual then I recommend doing it offline and as part of the “agreement” convince them to post how the outcome was favorable and everything is just fine now.

Of course a great deal of damage can already be done because it’s probable that their Yelp review, “Crazy Harry’s MotoMall is run by a corrupt ferret!” has already been crawled by GoogleBot and indexed so that when someone Googles your business name they see the post header or page title, but never see the retraction or follow up. And no, Google (or even Yelp for that matter) will not remove that entry. Welcome to the brave new world of a permanent online record!

The second outcome is that you feel the customer is being unreasonable, you are almost 100% certain that most reasonable people would agree, so you post your side of the story calmly and clearly and wait for the general public consensus to come to your aid (i.e. your Facebook fans, Twitter followers, etc. rally behind you and essentially shout the complainer down).

The final outcome is just to ignore they guy. Let him vent, maybe let some of your forum members, Facebook fans, etc. defend you but you essentially remain above the fray. This option is probably not the best for small business. The big guys like Dell and Apple can operate this way because they are huge and the vocal minority, no matter how loud, will not make a large enough impact. You are a small business that relies on a smaller number of customers that may be swayed by the complainer’s arguments. Therefore I suggest that you engage these folks and don’t just ignore them.

Next up is something that’s gaining more wide-spread attention. Your competition, either directly or though various proxies, make a concerted effort to blow you up online. Believe it or not, there are actually companies that you can hire who’s sole purpose is to essentially nuke your online reputation. They don’t typically advertise this fact, but they are out there, often as a part of a marketing firm or SEO/SEM company.

It’s often hard to tell if what’s going on is the work of a “real” customer or a hit-job by a paid online assassin. The best indicator is if the negative online vibe is cranking up all at once, or if it’s just a onesy-twosy type thing. If you start seeing your business name all over the web in negative posts, or if you go from 3 positive reviews on Yelp to 300 Negative ones in the course of a few weeks, it’s pretty easy to figure out what’s going on.

Unfortunately if you get hit with this kind of thing, there’s really not much you can do to fight back beyond trying to overcome it with legitimate positive karma. If you have run a good business for years and you have thousands of legit and happy customers, fans on Facebook, or forum users, quite often your friends will come to your aid in denouncing the attackers. That’s the best you can hope for. A grass-roots uprising of supporters defending your honor in the court of public opinion. Of course if your business has developed a somewhat well deserved reputation as a place to get screwed and you’ve focused on how to squeeze every penny out of a deal at the risk of long-term customer loyalty, well… Karma’s a bitch.

There are companies starting up that focus on “online reputation management” that can help you out to an extent, but they are not typically cheap, nor are they fool-proof. If an attacker has created a ton of negative pages on websites like joe-bobs-moto-shack-sucks.com and avoid-joe-bobs-at-all-costs.com and they do some basic SEO so that when a person searches for your business in Google and your real site is #5 behind these assassination pages or a ton of negative reports on www.ripoffreport.com, your only recourse is to create some more sites and SEO them so that the “bad” pages fall off the first page in the SERPS (search engine results pages). Yes, it can get ugly.

The killer here is that as far as I can tell there’s nothing legally wrong with this if the pages, posts, reviews, etc. have factually accurate information. In the US at least the truth is a defense against libel and slander. So imagine that you get bad reviews from real customers on Yelp that rip you apart. An “attacker” can take the facts of those negative reviews and essentially repeat these “facts” on a few hundred websites, blogs, forums, etc.

Most of you out there do not have the luxury of really solid, defensible positions in the search engines therefore you are very vulnerable to this kind of attack. If you have not been in the top 5 or so for years for your own name, it would be really, really, really easy in a long afternoon for someone with the will and the know-how and a little bit of cash for domain registration to blow you away.

The last kind of issue you’re going to have to deal with are the internet “trolls.” Trolls are basically losers holed up in their parent’s basement basking in the relative anonymity that the internet provides and throwing grenades into online forums, Facebook, etc. just to make you look bad and to feel a power rush. Typically if they post under their own name like on Facebook, they are not a troll. If they post with a cool handle like m0T0dUde or something else anonymously they are a troll.

The primary axiom when it comes to these idiots is: “Don’t feed the trolls.” If you are positive that the poster in question is just a troll and does not fall into one of the above categories that require action or a response, just ignore them. Hopefully your loyal customers will beat these idiots back into their basement where they can go back to playing World of Warcraft or giggling like school girls at the latest LOLCATZ. But make sure that you do a good job of identifying the person as a troll. If you get it wrong and ignore them they can easily go into category #1 and if they are really pissed off at you, they can take it to category #2

The moral of this story is that today, more than ever, it’s vitally important that even marginally (in your eyes) pissed-off customers are handled before they get a chance to do real damage to your online reputation. The best defense is a good offense. Make sure you are running your business in a way that only the most unreasonable folks have cause to go screaming, pitchfork and torch in hand, through the virtual village to burn down your castle. Make sure that you have established a wide and deep social media presence and that you own site is SEO’d to the hilt so that it can’t get buried by negative decoy sites. Because now more than ever, the world is watching, and they ALL have access to the microphone.

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Enforce MAP Comrade!

I’m a freedom loving American. I believe in the ideals of Capitalism and the efficient workings of the free market.

Sound like this is going to be some Beckian anti-government Tea-Party rant?

Nope. This is about something important that will actually matter to your real life.

I’ve got a few things to say about a little topic called M.A.P., or Minimum Advertised Prices (click here for a primer).

This is a long one. You’re about to see what happens to me without an editor! :)

map-poster-lock-big

MAP is a policy exerted on retailers by a PG&A OEM or distributor in an effort to keep a brand’s price (and ostensibly its brand equity) artificially inflated. OEM’s can’t, or often don’t try, to limit what you actually charge for a product, but they do try to control how you communicate or advertise a price.

If OEM’s are really that concerned with maintaining exclusivity and brand equity they should just be selling directly.

My position on MAP in the past has been that I don’t like it on principal or in practice, but if it’s going to exist then it needs to be enforced 100% evenly across the board: no loop holes, no selective enforcement, no games.

I’m also on the record in several columns that I also don’t believe running a cut-rate outfit is a path to long-term success. However, business reality dictates that specials, discounts, and other promotions (when used wisely) are an important tool in the box when running a business.

As a retailer we should have the freedom to run our business how we see fit.

I have now changed my stance on MAP. I don’t like it and I’d like to see it done away with.

Not only don’t like it, I think it’s harming our industry as a whole and benefiting a select few (mostly the OEM’s that create and enforce it).

Over the years that I’ve been writing my column on e-commerce, I’ve read or heard from dealers that really want MAP policies. They think that by having draconian MAP policies that prohibit internet retailers from selling at prices that are different than what “regular” dealers sell in their store, or on their website, they are “safe.”

What I think is going to happen is that these dealers are going to discover that Ben Franklin was right when he said “Sell not virtue to purchase wealth, nor Liberty to purchase power.” If you are a small or medium sized dealership, those MAP policies are not there for your benefit.

They are there to keep you, Mr. or Ms. Dealership, in line while they wait for the business model that currently drives this industry to turn their way.

MAP policy in the end is going to hurt small retailers much, much more than it will disrupt the large pure-play e-commerce companies.

Most OEM’s or distributors “enforce” their policy by threatening to put a dealer on a “no ship” status for a period of time or to just outright stop doing business with them. Obviously it’s the OEM’s decision to do business with whomever they want and to do so however they feel is appropriate.

The reality is that a very small number of powerful OEM’s and distributors supply popular or must-have brands. Due to their broad appeal and ability to get shopper’s attention a retailer has to carry them. The option of telling these folks, “Thanks, but we’d prefer to have control of our own business and do business with suppliers that are partners as opposed to overlords” is not a viable, realistic alternative.

The biggest problem comes down to selective enforcement or special “arrangements” between some retailers and MAP-happy OEM’s or distributors. These may be overt (i.e. the apparently special relationship between LeMans and Dennis Kirk that Arlo Redwine has detailed on the DN blog), or they may come down to the MAP enforcer choosing to just turn a blind eye on transgressions by certain retailers.

When the enforcement mechanism is to not sell to a retailer, and that retailer sells literally tens of millions of dollars of that OEM’s product, do you really think they are going to put that retailer on “no ship” if they find ways around a MAP or just decide they don’t want to follow it?

In addition to their market clout, large internet and catalog retailers in our industry have the luxury of expensive legal advice that helps them find loopholes in the MAP policies.

If smaller retailers/dealers try these same “tricks” they are often subject to a phone call or email from the OEM/distributor’s legal team (however, the person on the phone is most likely not actually a lawyer and typically doesn’t have the authority to actually clarify or discuss the actual policy).

The major e-tailer’s legal capability can discourage OEM enforcement because the OEM knows the policy that won’t stand up to the rigorous challenge a crack legal team could mount. I don’t know a lot of small dealers with access to those kinds of legal resources.

Don’t even get me started on what will happen once they start distributing directly to folks like Amazon. Considering Amazon’s potential buying power, no OEM in our industry has the balls to tell Amazon what they can sell a product for, especially if a deal with Amazon (or Wal-Mart, or Sears, etc.) means 2X, 3X, or 4X the order volumes and dramatic increases in operating efficiency and profits.

Large e-tailers also have the luxury of custom e-commerce platforms that allow them to create systematic end-arounds to the MAP policies in the forms of cash-back programs, rebates, gift-cards, loyalty programs, etc.

Instead of saying that a MAP protected helmet (from a large OEM and distributor) that normally sells for $300 is 20% off (which would explicitly violate said MAP policy) a large e-tailer can say “Buy this $300 helmet and receive 20% cash-back good on your next purchase” or “Buy this $300 helmet and get a $60 gift card.”

What’s nuts is that you can use this card or discount on a future purchase of a MAP protected product as well! And for some reason this is all OK with the folks writing and enforcing these MAP policies? So much for wanting to enforce brand equity though artificially inflated prices!

You can say “Low Price Guarantee: We won’t be under-sold! If you find [insert MAP controlled product name here] for less we’ll beat it!” Apparently this price protection is considered a private contract between the retailer and the customer and is not enforced under MAP… Lawyers… Gotta love ‘em…

If they are serious about the real purpose of MAP, why would these loopholes be OK?

If everyone on every internet forum on the face of the planet knows that they can call up or email UberMotoShoppingMegaSite.com and get a MAP protected jacket or pair of gloves that they found through a Google search on your (Mr. or Ms. rule-following, local dealership) site, but you can’t communicate to that shopper that you can and will in fact sell for the same low price that the big guys do… How does MAP help you again?

Even when the website/e-commerce platform providers in our industry have a way to enable the same promotional methods that the large e-tailers offer, thereby moving to a more level playing field, OEM/distributors drag their feet and don’t offer the necessary approvals that would be required to allow development to move forward.

In fact, as of this writing one platform provider has been waiting for several months for approval from a large OEM/distributor’s legal team regarding a promotional mechanism that would allow dealers the freedom necessary to compete with the large e-tailers while not violating MAP.

Why would the powerful OEM/distributor be so slow to enable small dealers to have the same promotional tools that large e-tailers have? No… Really… Someone please tell me why they have time and resources to track down every little dealership out there advertising products for $10 below MAP, but can’t get around to authorizing something as simple as this?

Let me put my tin-foil hat on for a moment:

Large OEM’s and distributors have recognized the writing on the wall.

Over the next ten years most (80%+?) of their business is going to come from large e-commerce retailers (even more so if the likes of Wal-Mart, Sears, and Amazon really start playing in the PG&A space as it looks like they intend to).

If they can do 80%+ of their PG&A volume with only 5-7 large retailers, they can dramatically reduce their overhead in the forms of sales expense, logistics expenses, etc. Right?

If they can get the market to look like that, don’t they have a fiduciary responsibility to their investors to do that?

By enacting draconian MAP policies that are only strongly enforced on the smaller, more legally defenseless dealerships, they can force the market into a shape that is more conducive to their bottom line.

I don’t care if Amazon, Wal-Mart, Sears, etc. all actually follow MAP. How many customers shopping for a new helmet, gloves, or jacket are going to buy from your shop over Amazon if the price is the same?

It’s not so much that they want you all to go out of business overnight… But if they can help steer our industry to a model with a more easily managed small number of retailers… I guess you can’t blame them really. It actually is a pretty good long term plan for them to become even more profitable.

What happens when more OEM’s like Scorpion start selling directly to the mega-ecommerce sites like Amazon?
Look at this
. This helmet is shipping directly from Amazon. Not a merchant partner.
I don’t care if there’s an iron-clad MAP or not. Most people, shopping online, are going to buy from Amazon before they buy from anyone else if for no other reason that brand identity (and the elements of things like security, etc. that come with it).
How long before folks like Tucker Rocky or LeMans start distributing their house brands directly to Amazon, Wal-Mart, Sears?
If Scorpion et al. are able to do this, unchallenged by the dealers and retailers, and do it more profitably than the current model, simple fiduciary responsibility is going to force them to do it to maximize returns.
No amount of platitudes of “supporting the industry” are going to outweigh possibly double digit increases in income that will come with consolidated operations and the shrinking of the supply chain.

So as you can see, MAP is basically a game. Even if it was possible to enforce 100% (which it never would be), odds are that the large e-tailers would be immune through the use of their market clout, legal muscle, or systematic work-arounds.

Even if you have a MAP policy that could theoretically be enforced 100%, like all command economies, it will lead to black-market sales and other back-room deals if the MAP price is perceived as too high vs. other non-MAP products.

I’d argue that in the long run, MAP policies even hurt the OEM/Distributor because it robs them of important market signals pointing to the actual value of the product in the marketplace.

Under MSRP and MAP, some product manager builds a fancy Excel sheet to determine the best price. It then has its legal team enforce the MAP policy. What does that sound like to you?

map-poster-boot

Last time I checked a theory writ-large that looked pretty close to this failed in the ex-Soviet Union.

Even the PRC has recognized that free-market economics makes more sense than trying to a command and control economy in many instances.

Companies with MAP policies apparently are not big on history or economics.

Here’s a scenario: Helmet I sells for a MAP protected MSRP of $450 and dealer cost of $292 (profit: $158). Unfortunately at that price it just doesn’t stack up to (or sell as much as) Helmet K that retails for $500 but has a street price of $380 and a dealer cost of $300 (profit: $80).

Now as a retailer, I know my market, my customer, etc. and I know that if I could sell Helmet I at $380 I would sell the crap out of them!

I’d still be clearing more profit per unit than Helmet K and I’d move more units which would make more money for me and ironically for the OEM that wants MAP!

There’s no way that some brand manager at an OEM could envision those market dynamics when setting the MAP MSRP 6 or 8 months ahead of the market launch.

They don’t know what the economy is going to look like, they don’t know what competitors are going to do, etc.

OEM’s and distributors need to worry about setting a wholesale price that allows them to make a profit when they sell to a retailer and that’s it. Period. End of story.

The idea of using MAP as a way to “protect” a brand’s image is a joke when it’s clear that there are so many tricks and loopholes that allow the protected products to be sold at prices nowhere near the MAP.

Check out the abundance of MAP protected products that are sold on Amazon or on eBay through gray-market distribution deals as just one example of how MAP breaks down and does nothing to 1) protect the brand or 2) protect legit retailers.

In the end, here’s my take on MAP:

  • MAP policies hurt retailers by limiting their options and choices in how they run their business
  • MAP policies (either intentionally or deliberately) can never be enforced 100% across the board so it creates artificial inefficiencies in the market
  • The resources being used to write, monitor, and enforce MAP are 100% non-value-added. I’ve been told that some retailers have people on staff full time that do nothign but find, and report MAP violations. These are the same people that volunteered to be hall monitors in grade school I bet.
  • MAP policies hurt customers by forcing prices to be artificially high in the same way that price control cartels like OPEC artificially control the price of oil
  • MAP price controls are eventually ineffective as grey-market retailers on sites like Amazon, eBay, etc. sell out the back-door of less scrupulous dealers

And here’s my suggestion. If you get a call from a MAP enforcer, have them speak to your lawyer.

If you find cases of large e-tailers violating the same MAP policies, report them to the OEM’s legal team and verify that the offending company has made the changes to their site or advertisement within the required time. If they don’t, then have your lawyer write a letter to the OEM pointing out that it appears that they are selectively enforcing the policy.

Eventually if we drown these OEM’s legal teams in reports of MAP abuse and catch them in the act of selectively enforcing MAP they will give up on the idea of playing this game of whack-a-mole.

Next we can try to name & shame. I’m creating a topic on my site here where you can leave comments and links to retailers that are violating MAP policies. It will be our own little MAP enforcement clearing house. Or Stasi if you will.

What’s pretty awesome about that idea is that I’m pretty sure that once the FTC gets wind of that post, and what is without doubt a clear case of collusion in our industry to keep prices artificially inflated, they will demand that it’s shut down.

Now if that happens, that pretty much proves that MAP is illegal, right? Collusion… Price-fixing… I’m pretty sure there’s a law or two somewhere about that.

Until these policies are challenged in court and eventually done away with, we are going to continue to see more and more power shift into fewer and fewer hands and that’s not going to be good for your customers, our industry, or most importantly your business.

I believe that these MAP issues are just the most evident tip of the iceberg that represents a looming challenge to the dominant business model in our industry.

However this time it’s going to be the Titantic that rams right though the iceberg. All of us, in our little boats, are going to be the ones at the bottom of the North Atlantic.

Let me know what you think.

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Report All MAP Violations!

map-poster-lock-big

I’ve created this post for the purpose of insuring that as long as OEM’s and other sources of supply in the motorcycle and powersports industry continue to create and enforce M.A.P. (minimum advertised price) policies (thus creating what are essentially price fixing scenarios) that all violators are treated the same.

It’s the “action” arm of my lengthy post on my take on MAP in general that you can read here.

The goal here is to make sure large retailers and small retailers are all being held to the same standard when it comes to MAP.

So, when you see a violation of MAP anywhere (email, print, website, eBay, Amazon, Google products feeds, etc.) in addition to following the policy of the OEM and reporting the violation to them, report it here as well so everyone can see it. Simply use the comments at the bottom of the page. You don’t need to use your real name to leave a post. I’ll be moderating the comments to eliminate spam, but that’s it. I take ZERO responsibility as to the accuracy of the MAP violation claim. I have no idea if the items actually violate any given OEM’s MAP policy. That’s for the OEM to decide.

The OEM’s with MAP are more than welcome to post their responses to MAP violation claims here as well. As are the offending retailers.

When the offending retailer has made the change to their site, etc. please update the comment section. Likewise, if after reporting the violation to the OEM/Disti you don’t see the retailer being forced to toe the MAP line make that clear as well.

Hopefully by having this fully open and transparent discussion of MAP and all of its tangential issues we can work to create a more fair, competitive, and vibrant powersports market.

Holding my breath…. NOW!

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Selling Online #43 : Put Your Best Foot Forward

The idea for this month’s column came to me last year when I was out doing some Christmas shopping. I didn’t have a specific item in mind, but I did have a general idea. Now this is a store that I don’t normally do a lot of shopping in so I’m sure when I walked through the door I had a little of that “deer in the headlights” look. Fortunately this store was staffed with knowledgeable and helpful staff and I think even more importantly, the products were organized and presented in a manner that made it, if not enjoyable, at least pleasant to shop in.

One thing that’s pretty obvious from looking through those stacks of catalogs on your parts counter is that we are in an industry with an insane number of products that our customers can choose from. While a small percentage of the hard-core enthusiasts know exactly what they want (you know the type.. The ones that have the distributor catalog memorized and come in with reams of printouts from the forums) most people need some help figuring out what they need or even more importantly what they don’t know they need.

Unlike in your physical store where you can have one of your knowledgeable and helpful staff aid a lost customer, on your website for the most part, the customer is on their own (unless of course you’ve got some type of online chat and co-browsing or co-shopping application on your site).

When it comes to e-commerce, the only tool you really have to help the customer is the merchandising on your website. For the purpose of this column I’m going to define merchandising to encompass three things:

  1. Organization of the products (product or feature groups, category and taxonomy development, etc.)
  2. Selection of products (what product go into those groupings or receive some other type of “feature” status)
  3. Presentation of the products

The first two elements go hand in hand. You can create a “category” on your site and call it something like “Maintenance Essentials” with products that pretty much anyone that rides any type of powersports vehicle is going to find useful or necessary. One of those items may be chain lube. Let’s say you’ve got access to like 10 different brands each with 3 variations and 3 different sizes. That’s 90 different combinations! For one simple product!

Imagine this type of scenario that I think makes up 80% of the shopping situations out there: A guy rides his motorcycle as an alternate commute vehicle and an occasionally for recreation. He likes his motorcycle, but he’s got a life. He doesn’t spend every waking moment on forums to determine what the ultimate chain lube is. He doesn’t ride with a big group of people that will sit around debating the relative benefits of various type of chain lube. All he knows is that his chain looks dirty and needs cleaning and lubing.

He goes to your site, or any typical site, and types in chain lube and is presented with almost 100 choices! For a simple product like chain lube! You need to make sure that on your site that you’ve picked the “best” one or two options for these major product types and present them in a way that makes it 1) easy to find and 2) communicate that based on your expert opinion that these are the ones to go with. Basically the exact same thing that a good parts person would do in a face-to-face situation. The difference is that online you need to do all of this before the customer ever comes onto your site.

There are a few different ways that you can do this. The first is the idea of creating multiple personas of model customers and so scenario planning on how they may interact with your site. Create like 3 to 5 customer types (the hard-core enthusiast, the casual rider, the spouse or parent of a rider, the total noob, etc.) and then imagine a few different scenarios for each type (a major part broke and they need to find a replacement right now, they are new to riding and need everything but don’t know anything, they need to buy a birthday gift for their wife, son, friend that rides, and so on). Pretend to be these various types in various situations and try to organize your site so that there are obvious categories and product assortments that make each customer’s shopping experience as fulfilling as possible.

If your site has been live for a few years and you’ve been using a good analytics package, you can use its data to see how people use your site and utilize real-world data in your scenario planning. Where they go, what they buy, what they look at and don’t buy, etc. etc.

Obviously this is all a lot of work. It’s so much easier to just buy a site from a 3rd party vendor with all the catalogs pre-loaded, or build your own and dump a product feed into it, have a few general categories like helmets, exhausts, etc., and be done with it. That’s what 99% of the sites out there do, and that’s why 99% of the sites out there suck and don’t sell anything! Not only does merchandising make it easier to shop, it’s just about the strongest tool you have to differentiate your site from all the other sites out there!

That doesn’t mean that you should do away with the potentially millions of other products in your online catalogs. More often than not, you’ll want to present that potentially overwhelming selection on a second layer behind the your primary merchandising and allow customers to drill down to explore. Always have a “See all of our chain lube products” link next to your hand-picked selection. Of course a robust and powerful search tool is your best bet to handle these kinds of shoppers.

So now that we’ve dealt with the product selection and organization ideas, let’s move onto the final piece, the presentation of those products.

There are so many cool technologies these days that can help you communicate the features, advantages, and benefits of the products that you sell. You’ve of course got the good ol’ custom written and compelling product description. You’ve got the ability to take your own product photos that show things like the product in use, various angles or views, mounting options and so on. You’ve got videos that you can post on YouTube and embed in the product page. You can post sound files of exhaust systems. The limit is really only your imagination and the amount of time you want to devote to it.

At the very top you can even go big time and use rich-media technology like Adobe’s Scene7 (www.scene7.com) that can provide a huge range of presentation and interaction opportunities.

Try to remember that you are the expert in what you sell. Use that expertise to help customers figure out what they should be buying and communicate it through professional merchandising on your site.

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Selling Online #42 : Be Where Your Customers Are

Welcome to 2010! I want to kick off this year with a column about selling online, but selling someplace else other than your own website. This is something that you can engage in even if you’re not directly engaged in full-blown e-commerce on your dealership’s primary website.

What I’m talking about is taking advantage of things like e-commerce applications on social networking sites like Facebook and other “widgets” that you can embed in blogs or forums.

The first example I’ll point out is a company called Payvment [http://www.payvment.com/] that has a nifty little storefront application for Facebook.

In order for this to work you’ll need to have a Facebook fan page set up for your dealership. You simply install the application on your page, set up the look at feel of the storefront using the tools that Payvement gives you, enter in some information about your shop, and then start loading products. (Obviously there’s more detailed steps involved and Payvment’s site provides all the details).

I’d recommend experimenting at first and a load a small selection (around 10) of products that are impulse buy, gift, general interest type of products. You’ll want to keep in mind that Facebook is not really a shopping destination, and typically you’ll want to focus on the interaction and social networking aspect of Facebook and keep the sales pitches to a minimum. But since it is a fan page, I see it as a great way to sell things like t-shirts, hats, and other items branded with your shop’s logo, or the brands that you carry.

Considering that Payvement is totally free to use right now, there’s really no reason to not give it a try and see if there’s a sensible way for you to fit it into the overall online activities.

One dealership that has begun experimenting with Payvment is Ducati Seattle [http://tinyurl.com/ykppl42]. What’s interesting about the fact that they have this e-commerce application running on Facebook is that they don’t even have any e-commerce on their primary dealership website!

Ducati Seattle’s Cindy Wallace is in charge of the Facebook storefront as well as their eBay store where they focus on selling crash damage take-offs, excess & obsolete, etc. Cindy told me that based on a combination of factors (strong local community support & involvement in the shop, etc.) Ducati Seattle has made the decision to not have a full-blown e-commerce operation. “People prefer to come into the shop to buy things where they can actually see them and to see other people there as well.”

But that doesn’t mean that they are not active online in other ways. Based on leadership by Ducati Seattle’s owner David Roosevelt they have made a decision to be very involved in social media like Facebook. Considering that they have over 1,200 fans on their Facebook page it makes sense that they are giving the Payvement application a test ride.

Another Facebook application for selling products from within your Facebook page is Nimbit MyStore for Facebook [http://tinyurl.com/yzvdzxh]. Nimbit seems to be going more for the rock band trying to sell merchandise angle (so they offer features like the ability to sell tickets or downloadable music), but I don’t see why you couldn’t use it to sell merchandise for your shop. Nimbit has several offerings that range from free to about twenty bucks a month.

Moving away from Facebook, I want to point out that there’s a growing number of widgets that allow you to place shopping experiences on more content-centered (as opposed to shopping-centered) websites and pages. A widget is a small bit of code that you embed in a webpage that provides a little area or box where something shows up that gives people information (weather, race results, etc.) or in our case a product display with the ability to buy it right there.

These widgets allow what I call contextual commerce. Where you can offer products that go along with the content the visitor is reading about. Writing a post in your blog about how to bleed the brakes? Why not have a widget in the side bar selling brake fluid, brake bleeders, pads, etc?

There’s quite a few people playing in this widget area out there. Here’s a few leads to get you started: BlinkCart [http://www.blinkcart.com/], Shopit [http://www.shopit.com/], CartFly [http://www.cartfly.com/], and Amazon [https://widgets.amazon.com/] even has widgets that let you sell products they offer (or that you have loaded as an Amazon merchant) on your site.

Check out Widgetbox (a clearinghouse of all things widget) as well and check out the ecommerce tag http://www.widgetbox.com/tag/ecommerce. Finally, of course, you can always Google “e-commerce widgets” to track down more of the latest and greatest as developers keep the wheels of progress humming along.

Having a storefront on Facebook or an e-commmerce widget on your blog is most likely not going to be a silver bullet in terms of generating a huge amount of extra revenue. A lot of this has to do with the fact that most people out there are not in the shopping mood when they are on a social site like Facebook. However, having a good selection of impulse purchase products and gifty items makes a lot of sense. It gives you a chance to have a few more hooks in the water in terms of selling things and it keeps you abreast of what’s going on in the world of e-commerce technology and off-site merchandising.

If you give this a try, please let me know how it works for you!

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