The E-Commerce Blog

There is a lot of debate about the issue of offering phone sales and service. Many of the large retailers such as eBay and Amazon have all but hidden from customers, by only posting email contact forms. Does that mean smaller e-commerce retailers can get away with not listing contact information?

The large retailers such as Amazon have so much brand equity, and have so many processes in place to automate customer service issues, that they can often get the same conversion rates without a phone number prominent on their site. Unfortunately, most retailers (99% of them) don’t have the brand equity to do that.

There are several reasons why people will actually call you:

• Ask for product information
• Ask for estimated shipping information
• Ask for recommendations
• Customer service inquiries
• To determine whether the company is legitimate

At first, you might try to simply address these issues with a more robust website. List frequently asked questions, maybe even interactive forms. Take your product information to the next level with detailed photos, description, etc. But it’s a simple fact that providing contact phone numbers increases conversions.

According to an Elastic path report, 60% of e-commerce retailers provide a contact phone number during checkout. Many online retailers report 10-20% of their business comes from phoned-in orders. In addition, simply having a phone number displayed on your website can increase conversions by simply making your website look more legitimate, increasing trust.

If you have a phone number listed on your website, make sure it is prominently displayed, especially on key pages such as the shopping cart or product detail pages where people will be more likely to have questions. If you don’t currently display a phone number on your website, I’d suggest adding a phone number prominently. Run an A/B split test to see if the conversion rate increases due to the number being displayed, and track how many phone calls you get and how many you are able to convert into customers. I think you’ll be pleasantly surprised!

Say you have a great idea and want to sell a product online, but don’t have a big enough garage (or permission from the spouse) to stock inventory, and leasing warehouse space is just a little too risky when just starting out. You need the help of a fulfillment service! Order fulfillment services stock your products, charging you monthly warehousing fees, and then pack and ship orders to your customers as needed.

Pros

• Start slow. No need to hire employees, lease a facility, or invest in supply chain management.
• Simplify. Most fulfillment services can integrate into your current order management. Simply click a button and send the order to be picked, packed, and shipped to your customer.
• Value-added features. Some e-fulfillment services also provide other services, such as call centers for phoned in orders, returns processing, and the ability to insert sales/marketing material into your boxes while being picked/packed.
• Location. You can choose fulfillment centers near your customers. Many fulfillment companies have multiple warehouses so you can pick the best location (or use all of them).

Cons

• Expensive. The biggest drawback to outsourced fulfillment is the cost. Paying someone else is always more expensive than just doing it yourself
• No control. You can’t control someone else’s facility, or their employees. This means you and your expensive inventory are at the mercy of your fulfillment company. Lost or damaged merchandise, delayed shipments, and errors are just some of the problems that can occur.
• Flexibility. If a customer calls at 5 PM and just has to have a product the next day, chances are you’re out of luck. If you have your inventory in a warehouse or the garage, you can make exceptions as long as UPS is still open, but by outsourcing you’re at the mercy of a third party. There are typically pretty early cutoff times for same-day shipping, and shipments can be delayed even more during the peak holiday season.

Tips for Choosing a Fulfillment Service

• Location – Find a location that’s centrally located, or use multiple locations to ensure all your customers are served equally.
• Price – Do some calculations based on your number of individual SKUs and your average number of orders to determine the approximate costs, and compare several fulfillment services. Some are better suited for small, uniform items (like books or electronics), while others can handle palletized products and irregularly shaped merchandise.
• Shipping Costs – Many fulfillment companies use shipping surcharges as a major profit center. Ask if you can use your shipper account numbers to charge actual shipping costs directly to your account. If not, make sure they pass at least some of their shipping savings onto you, as paying “counter” rates for shipping is very expensive!
• Proven Track Record – Ask for testimonials and a client list. Google their return shipping address to find other retailers using their service, and call them to get their opinion. Ask them if they are happy with their fulfillment service, ask them about the speed of both shipments and responses to inquiries.
• Insurance – Ask for proof of insurance, and ask about policies regarding damaged or stolen merchandise. Make sure you can request a full inventory at any time (even if there are costs involved).
• Turnaround Time – Get a guaranteed turnaround time for order processing and shipping.

Popular Fulfillment Services

ShipWire – Their simplified pricing structure makes outsourcing fulfillment easy, but means that they aren’t a good fit for all products.

Fulfillment by Amazon – Warehousing with Amazon has its benefits, like being able to sell on Amazon.com and offer “Prime” shipping to customers.

eFulfillmentService – A fairly small company, they’re more flexible and more likely to work with you if you have odd requests such as large or specialty products.

That’s right! The reason this blog hasn’t been updated recently is because I’ve been slaving away co-authoring The Art & Science of Online Marketing with Shayne Tilley.

The book is a complete overview of the entire landscape of online marketing and covers a wide range of topics including:

• The changing face of online marketing
• Search Engine Optimization
• Search Engine Marketing & Pay Per Click
• Social Media and PR
• Email Marketing
• Affiliate marketing
• Much more

The book is aimed at business owners, entrepreneurs and traditional marketing managers who want a practical introduction to online marketing. The Art & Science of Online Marketing is scheduled to be released in May, 2009.