E-commerce, 3 months in. What I’ve learned so far

08. May, 2010 0 Comments

So about three months ago now myself and my e-commerce business partner Dave took over at Clock Central and we also launched Board Game Central. I thought now would be a good time to reflect on the things I’ve learned so far.

1. Price is king. At first we tried raising prices and adding a shipping fee to maximise profits, but sales took a massive dive. Since our products are only sold from a few different shops, I thought it wouldn’t be price sensitive. Boy was I wrong!

So after 2 weeks of very slow sales, we tried the next extreme. We put free shipping back on and reduced prices to be the cheapest on the internet. Everything that was available elsewhere cheaper, we marked down, though we left prices up where we are the only ones selling.

The way we did it on Clock Central was in the form of a permanent sale, so the markdowns show up on the site and also in a “Sales items” category. Since then, around 80% of our sales have all been items that we marked down.

It’s not scientific data, but it’s enough for me… Price is king in e-commerce.

2. Customer service is king. I’m lucky enough to be partnered with a the best customer service guy you could ever get.

For a while, we didn’t have a phone number listed on Board Game Central. Amateur mistake. As soon as we did, it started selling a lot more.

The most common questions we get are product questions. Customers like to ring up for assurance or for some questions about the product.

The next biggest question we get is “Will I have it by xx day”?

People are concerned about whether the product is right for them, and whether they will get it by a certain date (almost always for gifts). Sometimes people just want to be assured and talk to another person.

3. Unique and high margin is best. Without high margins, you need volume. Without unique products, it takes a lot of investment to get volume. (I’ve written more about product/market combinations here). Also with high margins and unique products, there’s not as much of a chance of a price war.

We’ve decided on high margin, unique products, and I believe it has been a good decision. We’ve been profitable from day one and it’s a scalable model.

Whats the goal for the next three months?

The goal for the next three months is horizontal expansion. More products, especially on BGC, and hopefully at least one more store. Stay tuned for updates!

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