Online Business Benefits Pt 2

This post was written by Tony-Online on March 23, 2010
Posted Under: Uncategorized

Let’s assume that you have a business selling a product or even an assortment of products similar to the average B&M business. A very large concern you’ll have is stuff, your product, your inventory.

If you choose to operate an online business selling a product the same way as your grandfather operated his B&M business, being online is not going to be much of a benefit to you. One benefit you enjoy with an online business is that all you have to show a prospective customer is a picture of the product.

A B&M business cannot get by with having as few as one of every product they sell on the shelf but an online business doesn’t need to have ten or twenty of a product, let alone of every product, physically on the shelf. As the operator of an online business, you can nail down dependable sources for each product you sell and just keep a minimal quantity on hand to fill orders from one day to the next.

You must have your supplier or suppliers commit to deliver product on a just-in-time basis. In other words, you only buy product as you receive orders to sell it. Do not make the mistake of promising a delivery within X# of days or weeks and then not be able to back up your commitment. Always deliver more than what you’ve promise. And make very certain that your supplier(s) keep you advised of any problems they see ahead which could impede delivery to you.

Some online businesses have contracts with fulfillment centers that specialize in filling and shipping orders for customers (in this case your business is one of their customers) when they receive the order notification. In this kind of operation, you don’t have to have any inventory on hand at all.

You do have to be certain that your fulfillment house is constantly on top of things and makes you aware IN ADVANCE of any potential problems with maintaining adequate stock on hand. Being aware that a problem is coming grants you the opportunity to inform your customers that a given item is running low, or that you expect it to be on backorder within days, or that you may not be able to fill their order as promised. Sure, the customer may elect not to order but you have earned some credibility by being honest instead of having a customer get mad because their purchase hasn’t shown up within two weeks or whatever time frame you’ve promised.
The same is true whether you use a fulfillment house to fill orders or you do it yourself. You’ll accumulate brownie points by being honest.

Remember that “One Aw Sh— can wipe out twenty-five Atta-boys.”
This is one lesson that many business entrepreneurs never seem to learn and not knowing this can attract an awful lot of harm to your credibility online in a flash.

Stay tuned.

An original blog written by Tony Neilson and published at March 23/10

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