If You’re Lonely And A Retailer…

Thinking about the recent geeklist, one of the comments and one that I’ve echoed before is how lonely running an online store in this industry can be.  The challenges we face, and the intense competition, can create barriers to discussion.  However, writing this blog has brought about some interesting conversations – there are now a couple of online retailers that I talk to on-and-off via e-mail and/or phone.

I’m wondering if there’s a demand for something a bit more formal? I know Facebook groups are quite popular among B&M retailers in our space, would there be a demand for an online retail store group? Is there anyone else who is reading this blog who’d like to chat but are feeling hesitant?

If there is one, comment below. Let’s chat, be happy to manage that group and we might be able to help one another out.

 

Addendum and Edit: Would people prefer an actual (private) forum or a Facebook Group?

Managing Inventory & Databases

One aspect of running an online store is inventory – specifically, the fact that we have a huge database of games, accessories etc but only a small percentage of them are actually active at any one time.  There are a lot of games and items that either go out of print or just aren’t worth bringing back into stock.   Many of those we let go down to 0 and put it on special order status.

The problem of course is that if you have every single item that could be pre-ordered up on the site, it’d fat become extremely hard to browse.  It also slows the entire site down since we aren’t Amazon and have multiple servers running the site.

So, the question then becomes managing the database and listings, by turning some off and leaving others on.  That seems fine to start, but you also start seeing a new problem where old URLs which Google has cached become 404’s.  That’s not a good thing, especially if too many of your pages go offline.

So, the next question is what to do – do you manually remove the links from Google or create 301 reroutes to other pages? Or do you keep all those pages up instead, making your entire site much more difficult to browse but definitely more prominent on Google for these obscure / less demanded games?

It’s an interesting question on a business perspective but it certainly does create its own set of problem whichever way you go.

Whispering in the Wind

Sometimes it’s scary posting online on this blog.  It’s not that as if we are such a big player that what we do / what we think / what we want is going to change anything by posting.  In fact, posting anything controversial is just asking to be signaled out as a troublemaker.  It wasn’t a problem when we were tiny and no one read this blog (like when we started); but now we actually get citations from Wikipedia and even have people read us across the world.

It’s not as if we even get money from this blog – at least, not the business posts.  So why bother?

Truthfully, I think it’s the perverse side of me that likes poking the bear.  Or teasing my wife.

There are other less self-destructive reasons of course:

  • Education – somethings are outside our control. The more we educate our customers on these aspects, the less difference there is between their expectations and our reality there is to occur.  It creates a smoother customer flow.
  • Analysis – writing these posts generally require me to conduct analysis, not only on the topic on-hand but on my thinking processes.  Occasionally, that’s actually been useful.  I hate writing reports, but a blog post can help me structure my thoughts in the same way.

Overall, I post what I want when I want to. I try to watch what I post though based off the idea that nothing I ever post will disappear; so I best be willing to stand by it.  That corollary though means that I don’t post a lot of things, because this is a public forum still.

IT Costs of Running an E-Commerce store

Running an E-commerce store is a strange thing.  We spend a significant portion of our budget on IT costs each year, updating and adjusting the store to make it more user friendly and bug fixing.   To give yo an idea, it’s about the same amount that we spend on marketing.  In many ways, I look at the IT budget as a mixture of a maintenance / fixtures upgrade budget and rent.  You see, at a guess, we probably spend about 50% of our budget on adding new features and the other 50% on fixing bugs.  It’s a strange process in that each new feature that you add generally means bugs in the future.   It’s also part and parcel of running an online store – when software updates – on your server, on your site, on browsers – you need to update your site design to ensure your site still works for them.  The more complex / sophisticated your site is, the more chances there are of something breaking.

Self-Hosting vs SaaS

Part of the reasoon for the need to update our site and it costing more is that we self-host our site.  We have our own servers, our own domain name and our installation is not linked to any other major network.  There are a lot of Software-as-a-Service systems out there like Shopify or Magento Go, but for us, keeping a self-hosted server allows a level of flexibility that we desire.  With a SaaS system, we’d be reliant on the features that have already been released and any new features we wanted would have to wait.  And god help you if you run into an unusual problem – I’ve seen and heard of horror stories where companies, with an unusual error are unable to get it fixed on a SaaS solution.

Hosted solutions give you more flexibility – but generally cost significantly more to keep up an running.   If a major browser update changes how your site shows up  / functions with the browser, you have to pay for the development / fix yourself.  there’s no spreading it around multiple sites. Well, okay, it’s possible that a general patch is released on the platform you are on – but updating to the patch generally brings its own headaches as you then have to update all your modules / fixes / add-on’s to the new update.  That can sometimes be more expensive than just having a patch set-up just for your site.

Different Models

As mentioned, we update our site on an on-going basis.  On the other hand, I know of other e-commerce businesses who spend very little on this.  They get a basic (or more complex site) up, pay a large lump sum payment and put off any other updates till it’s time to revise the site again.  It’s no a bad model, just like using the SaaS model isn’t ‘bad’; just different.  The advantage is that costs are significantly lower and cashflow is less effected on an on-going basis.  However, this often means that when you do have to update the site, you are miles behind and often have to scrap / redo the entire site to bring yourself up to code.

It can also mean that you miss out on customers – customers who want / need a specific feature on your site that you don’t provide might decide it’s not worth working your site and move on.

Overall, if you do run an e-commerce site, expect to budget for website development – whether it’s a one-off payment or an on-going one like us.

Competing on Price – Or Not

Recently had a talk with someone who asked me a simple question ‘Isn’t online difficult? You just have price to compete on’.  It is perhaps one of the most common beliefs out there, and the simple fact is that it’s not true.  On the surface, price definitely looks like the only thing that we all compete on; but it really isn’t just about the price + shipping.

Customers choose one company over another for a series of reasons including:

Usability

How useful is the site? To what extent does the site offer you the tools that you need to put an order through.  This can range from offering a payment method that you prefer to a wishlist / guest registry to reviews.  Heck, it could be as simple as having the right colour font.

Reputation

Buying online (heck, buying in general) is a leap of faith.  You only need to go to BGG’s Discussing Retailers section to see the number of times customers have to ask ‘is this company good’?  Having a reputation of good customer service can put you ahead of a similar, less well-known company.

Shipping Speed

How fast does your order go out? Does it take a day? 2 days? A week? It matters to some people, it doesn’t for others.

Selection & Availability

Does a company have everything you want? Do they have it in-stock? Amazon’s a great example of a place that has low prices (especially when you include Free Shipping) but do they have everything you want in-stock? Sure, there’s not a huge difference if you can do multiple small free-shipping orders (like in the US with Amazon Prime) but what if you struggle to reach that threshold?

Returns, Mis-shipments & Other Exceptions

What are the return policies of the company? What are their policies on mis-shipments or wrongly labelled / addressed orders? What are their policies on exceptions or mistakes in the ordering / shipping process?  When everything goes well, we never worry about these things but when it doesn’t, you need to know the policies of the site.  In Canada alone, among the major game stores, the policies dealing with any of these areas are quite different.

Customer Rewards

Are there any? There might be, there might not be; and within the rewards programs there’s quite a difference in degrees and options available.  These things can complicate even a simple site-to-site comparison.

Pre-Order Policies

Lastly, what are your options with regards to pre-orders? There are obviously a lot of ways to take pre-orders – from adding individuals to a notification list, a reservation list, taking orders (and charging for orders) to just taking an authorisation (the way we do).  All of these policies affect customers differently, and again differentiate the customers

The Hidden Cost

Here’s the truth though – the more lax / favorable the policies are towards a customer, the more likely the prices are going to be higher.  As an example – it’s easy to do returns with a B&M store compared to an online store, but you do pay for that convenience.  Again, the same with game space (which we don’t have).  The more you expect in terms of favorable policies and the like, the higher the prices are likely going to be.

There’s a disconnect between us and say, Amazon though – they provide great policies and low prices; and manage to do so without impacting their service much generally.  Of course, they also have a bottomless bank-account.