Salesman, affiliate schemes, decisions...
Well, today a rare thing happened - I listened to a salesman...... Ok, so I get to listen to a lot of salesman, most days in fact but today I was drawn in. If truth be told, he was not even a particularly good salesman - his pitch was not only repetetive and stalling, but lacking a fair amount of knowledge on his chosen subject.
It relates to my main online gift shop. The guy was "selling" the opportunity to get my product catalogue listed on his companies website. Along the lines of Amazons marketplace.
Up until now, I have allways resisted the temptation of going down any affiliate type route. I know that on the plus side there could be a lot of extra sales generated but, working on a pretty tight margin means that to pay the kind of percentage that Amazon are asking would mean that, although I would be doing all the work, they would be recieving more rewards than myself - not really worth the extra work in my eyes.
Still, there is allways that nagging feeling of how many sales you could generate from such a scheme. Of course, as is the way with the internet, actual sales figures or even an indication are incredibly difficult to come by. What I could tell from this shopping portal is the Alexa rankings. They show that the site is pretty busy - alot busier than my site. Of course, this traffic has to be split between the 700 odd suppliers that have their products listed on the site. These suppliers range fom the minnows right up to a few of the more recognisable internet success stories - certainly a few well known names listed there, so I have no doubt that working out an average/best guess of traffic compared to suppliers sales would just not be proportional - I am sure that a few of the 700 suppliers are getting a lot of traffic and orders and an aweful lot of others would not be getting much of a look in. Which section I would fall into remains to be seen.
I wont reveal the name of the site as yet - as I dont really want to be a laughing stock if I get no orders out of it. The deal? Well, it not only involves me paying a percentage of every sale but there was also a pretty hefty setup/annual fee. This is the problem. This site is going to have to generate a fair few sales over the next 12 months just for me to break even.
So - have I been a muppet? Am I throwing money down the drain? Have I been duped? Only time will tell. Assuming I do get a couple of orders - I will reveal the name of the site and you can let me know what you would have done in my situation. Of course, if I dont recieve any orders, this will be the last you hear on the matter and I will erase it from my memory, along with all the other blurred bad descisions I may or may not have made in the past ;)
Cheers,
Rich
It relates to my main online gift shop. The guy was "selling" the opportunity to get my product catalogue listed on his companies website. Along the lines of Amazons marketplace.
Up until now, I have allways resisted the temptation of going down any affiliate type route. I know that on the plus side there could be a lot of extra sales generated but, working on a pretty tight margin means that to pay the kind of percentage that Amazon are asking would mean that, although I would be doing all the work, they would be recieving more rewards than myself - not really worth the extra work in my eyes.
Still, there is allways that nagging feeling of how many sales you could generate from such a scheme. Of course, as is the way with the internet, actual sales figures or even an indication are incredibly difficult to come by. What I could tell from this shopping portal is the Alexa rankings. They show that the site is pretty busy - alot busier than my site. Of course, this traffic has to be split between the 700 odd suppliers that have their products listed on the site. These suppliers range fom the minnows right up to a few of the more recognisable internet success stories - certainly a few well known names listed there, so I have no doubt that working out an average/best guess of traffic compared to suppliers sales would just not be proportional - I am sure that a few of the 700 suppliers are getting a lot of traffic and orders and an aweful lot of others would not be getting much of a look in. Which section I would fall into remains to be seen.
I wont reveal the name of the site as yet - as I dont really want to be a laughing stock if I get no orders out of it. The deal? Well, it not only involves me paying a percentage of every sale but there was also a pretty hefty setup/annual fee. This is the problem. This site is going to have to generate a fair few sales over the next 12 months just for me to break even.
So - have I been a muppet? Am I throwing money down the drain? Have I been duped? Only time will tell. Assuming I do get a couple of orders - I will reveal the name of the site and you can let me know what you would have done in my situation. Of course, if I dont recieve any orders, this will be the last you hear on the matter and I will erase it from my memory, along with all the other blurred bad descisions I may or may not have made in the past ;)
Cheers,
Rich
posted by richandzhaoyan | 12:42 AM
6 Comments:
I don't think you will become a laughing stock if it doesn't work. You have to try new things otherwise you won't grow. It is all about risk/reward and sometimes it will work and others it won't. You might end up with just a few extra links back to your site which can't hurt, you might end up as the "gift king" of EU. Just be happy you are in a position to be able to take a few chances.
I imagine it is something along the lines of the e-directory ?
I also have been looking at doing something like this and would definately be up for giving it ago if i had credit card processing at my dispoability - currently i am just happy using PayPal though. I have been reading up about e-directory lately though and have heard some very impressive sales figures - so the best of luck if it is that. Please do keep us updated as nobody will laugh at you - if anything i envy the fact you are in the position that if you fail at least you have been able to try.
Many thanks,
Eddy
Thanks both for the vote of confidence.
With regards to being in the position to take the chance - well, yes I guess I am lucky but make no mistake, any money spent on lost causes is money that I will struggle to be without! With any luck, the internet business will come good within a few years but at present, with the outlay on the warehouse, more staff, money going into stock, etc, etc.... There is currently little left for me at the end of the day. The money spent on this would have gone a good way towards replacing my win98 laptop! Of course, it is all hopefully investment that will pay off well in a few years - at least that is the plan.
Eddy - Bingo - you got it, it is the e-directory. Any chance you can post any links to where you have been reading up about it? To be honest, the telephone call totally took me on the hop on thursday. Quite why I bit I have no idea. I have very little idea about e-directory apart from a few hours rapid research while I was making the decision.
Going by the salesman spiel, they had about 1700 orders placed during a 12 hour period, last wednesday. Of course, I only have his word to take for this and although it sounds impressive, if you consider there are 700 retailers listed with them, this works out at around 2.4 sales per retailer. Then again.... Alot of the retailers are small, specialist, limited stock setups so may not get anywhere near 2.4 sales per day and on the flip, there may be one or two retailers who are getting many more sales.
It really is an out and out gamble but as you both point out, if you dont try you will never know. I just had a hunch about this call - but as ever, once going with the hunch I am starting to get cold feet until some results come in. ;)
Hopefully I will get directions on how to upload the product list on Tuesday and we will see how the sales go from there.
BTW Eddy, do you have a blog? I am allways interested to read on store owners backgrounds.
Cheers,
Rich
Hey Rich - i do have a blog but its a bit neglected at the moment take a look here:
http://eddygbarrett.co.uk/
I was reading up on the e-directory here:
http://forums.ebay.co.uk/thread.jspa?threadID=200328048&tstart=0&mod=1145188188638
Have you also considered Amazon ? I use it with a small amount of success but i have to charge higher prices than on my website due to their high fees. However any extra sales are good and there arent no up front fees which is always nice.
Also if you dont mind me asking how much did you pay for the e-directory listing ?
Eddy
Even if the experiment fails it will be worth publishing your results. Win, lose or draw it's worthwhile trying and even if it fails to break even it's the fact that you've tried that counts.
What are the early indications?
Thanks for the comments and words of encouragement guys.
Eddy - Regards your blog - of course, I remember reading the results of your entry into Burts competition - how are things going, a couple of months down the line? What am I paying for the edirectory listing? Well, probably too much! Seriously, after having checked your link (thanks for that) I would say I am happy with how much I am paying for the setup, but not so happy with how much I am paying for the commission on each sale. Having said that, I have only been listed as of today so I have not had to pay any commission as yet as the fist sale is yet to arrive.
Liam, thanks for taking the time to comment, early indications are that they spend too much money on recruitment and not enough on technical staff - it has taken right up till now (about three weeks) to get listed! As soon as I get any serious feedback, or even the first sale, I will let you know how its going.
First time trying this kind of setup so I will be as interested in the results as anyone and from the results I will have to decide on whether or not it is worth the expense. Certainly my whole frame of mind of selling online is that I have to cut costs, and therefore price, to be competitive, so paying out a hefty commission on each sale wont really work - of course, if it results in a lot more sales, maybe I can look at the prices without losing sales - although I have my doubts!
Cheers,
Rich
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