Hosted Retail Solutions – Yahoo! Store

When you start out in e-retail, you often begin where you are most
familiar.  Ebay, for example, is a powerful way to sell online, but
takes a lot of work to keep up with listings, products, order
fulfillment, and customer service.  You can hire a team of programmers
and consultants to develop a custom store and checkout, but that is
often very expensive, and is basically reinventing the wheel.

The most bang-for-your-buck is going to be a hosted store
solution, which gives you much of the power of running a retail site
of your own with very few of the headaches.  You don’t have to worry
about any IT issues for your store (server upgrades, maintenance,
etc.).  Most solutions will have all the tools you need to get started
quickly.  They’ll include order management, product management,
tracking and reporting and more.  In just a few minutes, you can have
your site up and running using a template, complete with a working
shopping cart and checkout!

Yahoo! Stores are one of the most popular hosted retail solutions on
the internet.  Their starter package is only $50 to set up and $39.95
per month, with a 1.5% store fee.  It only takes an hour to set up and
start doing business.

Yahoo! Store has two primary advantages over some of its competition.

First, it is very simple.  This simplicity is shown in how quickly you
can set up a store, using Yahoo!’s trusted name to process orders.  It
also can be used to generate very fast, simple websites. You need no
technical experience to set up and use a Yahoo! Store, and they have
vast help documentation to guide you through anything you get stuck
on.

Second, it is very popular.  While it may not be implicitly easy to
expand, there is a vibrant community of consultants and companies that
are experts in providing after-market tools that will allow you to
make your Yahoo! Store do all sorts of things, including custom search
functionality and tracking suites.  While these add-ons will cost
money, they are generally far cheaper than having custom programming
done from scratch.

Two drawbacks which should be considered-

First, it’s based on predefined templates, which are used to generate
your site’s actual pages when you tell it to publish your site.  The
disadvantage is that you will not be able to create dynamic content
outside of the original functionality of the store.  Auto-updating
stock counts, for example, can’t be done easily, as every time you
want to change something on the site, you have to republish (which
could take a while, and is generally done once per day).  Also, as the
orders are processed on Yahoo!’s transaction servers, separate from
your store, it can be very difficult to implement third-party
tracking, such as Google Analytics, for tracking conversions.  The Yahoo
store is easy to start and use, but can be constricting if your
site outgrows the confines of static pages.

Second, while the beginner accounts are very comparable in price to
other solutions, and the larger account types have lower store fees,
they are not the cheapest at the high end of the spectrum.  If you are
doing over a hundred thousand dollars in revenue per month, the
higher transaction fees will add up.  It may not be an issue
for years from when you start your store, but it merits a moment’s
consideration, as it could add up to thousands of dollars per year in
lost margin.

Be sure to research as many options as you can if you decide to start
a store with a hosted retail solution. 

Now you have inside information on one of the biggest games in
town…most hosted stores can be set up in about an hour, so… what
are you waiting for?

Three Wholesale Hurdles for E-Commerce Startups

So you’re starting a retail website, and are looking to set up
wholesale relationships with some manufacturers and distributors.
There are going to be a few vendor relation hurdles you’ll need to
overcome. Once you know what to expect, you can plan your product
selection realistically, and manage your growth effectively.

First: If you’re new, you won’t have many corporate credit references.
That’s okay, but it does mean that you might have to set up a credit
account with the manufacturer or distributor in order to process your
purchase orders. Sometimes it just means you’ll have shorter terms,
or the window of time you have to pay for the order after it’s placed.

Second: Unless you’re starting from a brick and mortar shop, you will
have some real trouble breaking into some product markets. There are
a lot of manufacturers and distributors out there that won’t deal with
web-only retailers. There are a variety of reasons they do this. For
example, for them, websites might be smaller accounts, requiring a lot
more work to move the same amount of product. Some vendors prefer to
deal with local shops, being careful not to have two shops that are
too close together both offering the same product lines.

Some vendors shy away from web-only retailers because websites don’t
have a customer area; they compete nationally with everyone. While
you won’t be able to push these big vendors around, you can sometimes
find that one of their smaller distributors might work with you, or
more often some of their competition will. The free market is just
as real for wholesale sales as it is for retail sales.

Third: You will want to find the right inventory model for your
business. You can stock things yourself, where you have complete
control over stock levels, and customer servicing/fulfillment. You
can also dropship, where you send your customer orders to a vendor,
who handles the final fulfillment (but not the customer service!).
You may find a balance of the two models that works for your
particular product lines.

Very expensive items will take a lot out of your coffers to stock,
and might be a good consideration for dropshipping. Inexpensive
and small items take very little resources to stock yourself, and
are often difficult to find dropshippers for anyway. Depending on
the types of products you want to carry, the warehouse space you
have to work with (be it your garage or a 25000 square foot hangar),
and your available capital, you’ll want to choose carefully how you
want to manage your inventory.

Sometimes vendor relations is as much diplomacy as it is
commerce, but knowing what to expect will help along the way.