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Making money but exhausted
Am I selling the wrong product?
skatingtoolman

5+ Year Member



 
Msg#: 3321347 posted 3:23 pm on Apr 25, 2007 (gmt 0)

After 5 years and thousands of products, I am exhausted. We sell parts for machinery. The amount of phone calls to help troubleshoot their products problem is endless. We support about 20 different manufacturers but we are unable to stock everything that we sell. We have to drop ship some items and then order in others (due to minimum order amount required from our vendors) and then ship them out later. This generates a mass of phone calls and e-mails. I am starting to hate my business. We need more personnel, yet we really can't afford them. Our products are so technical, we can't just hire data entry people to write the description of each item, because either they don't understand our technical product or the people who do, don't want to sit in front of a computer all day. I am thinking that we should just build a wholesale site that sells to people who know what the heck we are selling and don't need hand holding. The general public tries to fix their equipment, calls us up and spends 20 minutes on the phone for free advice, then may or may not buy the $14 part needed. UGH! We will top 1 million dollars in sales this year, but we have spent major money this year on a new server, mail order software, printers, computers, scales, etc., etc.
HELP! Are there e-commerce businesses like mine that one should stay away from because they will eat you alive?

 

benevolent001

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3321347 posted 3:30 pm on Apr 25, 2007 (gmt 0)

Hello Toolman , welcome to WebmasterWorld

hmm are you working alone for your website? guess you need some planning to sort out things.

here is what i suggest

Try to make FAQ or knowlegde base on website , since most of problems are common try to address the questions there from website only so that people can read and find answer instead of calling , remember no one like to call when they can find answer themselves

For technical stuff i guess take the help of your manufacturers they must be supporting to how to write content and documentation for the products

You are doing fine on buying stuff to improve efficiency , untill and unless you are in profit dont worry for that

skatingtoolman

5+ Year Member



 
Msg#: 3321347 posted 3:41 pm on Apr 25, 2007 (gmt 0)

Adding technical information is a good suggestion. Are there specific do's and don'ts for websites that sell very technical items?

Receptional

WebmasterWorld Administrator receptional us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3321347 posted 3:42 pm on Apr 25, 2007 (gmt 0)

This generates a mass of phone calls and e-mails.

I'd do two things.

1) Make the phone number for support a premium number! Not ten bucks a minute premium, but offer them the premium number where you will help them or the non-premium number of the manufacturer.

2) Emails should 90% be fixed with a series of FAQs sitting in on your hard drive (actually, I use notes in my Yahoo account). I find that having these replies already templated makes email support MUCH MUCH easier. As you start to hate those support emails, it becomes harder and harder to reply to the same inane, "READ THE DARN MANUAL IDIOT" type question without sounding terse or rude. Templating the common replies gets you out of that dangerous stste of mind and also makes email support MUCH quicker.

Dixon.

skatingtoolman

5+ Year Member



 
Msg#: 3321347 posted 3:54 pm on Apr 25, 2007 (gmt 0)

Receptional,
Adding a Premium Support line is a great idea. Should I have one phone number for standard and one for premium?

Receptional

WebmasterWorld Administrator receptional us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3321347 posted 4:40 pm on Apr 25, 2007 (gmt 0)

I don't know your business, but if you're hating your business due to phone calls, then i'd consider dropping any reference to a non-premium phone number from your site altogether. keep the standard number for your business cards and letterheads. Make it easy to use the premium number for customers and hard to find you directly on a standard number.

Drive them to their email boxes or make them pay for the cost of a human being.

ecommerceprofit

10+ Year Member



 
Msg#: 3321347 posted 4:55 pm on Apr 25, 2007 (gmt 0)

Hey buddy! The ideas above are excellent - a premium number for sure - a tech faq, etc. but here is an idea you may want to consider in a year or two that I recommend...

Get your business super profitable - bottom line net profit...get that bottom line nice and juicy - don't worry about gross revenue - just concentrate on a solid net profit...then go and sell your business. Most smaller businesses sell on a multiple of net profit (not the sexy businesses that sell out to Google but the less well known businesses like the people on webmasterworld). Also, take the next year or two to get your systems in place to make the business run more smoothly and then sell...use the money that you earn from the sale to fund a new business that you truly enjoy...good luck!

bodine

10+ Year Member



 
Msg#: 3321347 posted 5:00 pm on Apr 25, 2007 (gmt 0)

And, I assume someone knows this stuff...presumably someone on your staff. Ever thought about compiling everything you know into a booklet and selling it?

skatingtoolman

5+ Year Member



 
Msg#: 3321347 posted 5:43 pm on Apr 25, 2007 (gmt 0)

Bodine,
Not a bad idea. There really isn't a book on our industry.
Also, need to concentrate on the bottom line, not the flashy Grosss Profit number.

jsinger

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3321347 posted 5:55 pm on Apr 25, 2007 (gmt 0)

Excellent thread and some great response.

How about raising prices on troublesome products?

Sounds like you're actually in a neat business because competition will remain limited.

Develop an email list of your best customers and cater to them.

moose606

10+ Year Member



 
Msg#: 3321347 posted 6:25 pm on Apr 25, 2007 (gmt 0)

We started by compiling a list of the most frequent issues for phone calls, and then started to develop content around them. We placed this content on our website and two things happened. The phone calls declined, and our traffic increased. I second the great thread comment.

bumajj

5+ Year Member



 
Msg#: 3321347 posted 6:37 pm on Apr 25, 2007 (gmt 0)

Sorry about the stress your biz is making you pass through. But have you ever heard of WORN OUT? I guess you are, really. If you enjoy what you're doing with the attendant frustrations, fine. But if you'd look else where, I'll suggest you make many from this, hire more hands (money in your bank account can't buy you happiness), and diversify into some other less troublesome ventures. Make money from multiple streams and enjoy your life better. Good health to you.

Essex_boy

WebmasterWorld Senior Member essex_boy us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3321347 posted 11:33 am on Apr 26, 2007 (gmt 0)

Make the phone number for support a premium number! - Just what I was going to suggest, or a pay for support line where by they buy say 60 minutes support over the phone per year.

60 mins was just an example, im sure you get my drift.

Rugles

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3321347 posted 9:05 pm on Apr 26, 2007 (gmt 0)

Hey Toolman

Sounds like your site and ours are doing similar things.

I understand the frustration of spending 20 minutes to close a $30 sale.

How we got around it was having knowledgable staff. Whenever a customer asks a question about a product that we have never had before, we login to the backend of the site and put text on the site to prevent somebody from calling and asking the same question in the future. This has the added benefit of having content added to the site on a daily basis... which of course the SE's love. After 7 years of this we have a massive site with thousands of pages of origonal content. A few of our suppliers (in fact the actual manufacturers of some of our products) use our site as a source of technical info.

So unfortunately I feel if you disable your phones for your customers it may have a negative effect on your bottom line. The only solution is employees who can handle the technical phone calls and have the ability to add content to your site.

corbing

5+ Year Member



 
Msg#: 3321347 posted 11:14 pm on Apr 26, 2007 (gmt 0)

I have no idea how complicated it would be for your industry or how well it translates, but take a look at some of the appliance parts companies on the web. They sell hundreds of thousands of weird parts for appliances (dishwashers, refrigerators, ovens, microwaves, etc.). Google "appliance parts" and you'll see the companies I'm talking about. They have implemented features such as the "repair library", model number locater service, and item diagram's with part numbers that you can order right off the picture (pretty slick actually). I would study what they are doing and see what ideas that you could use for your own situation.
I would also try to order a few things from them over the phone (with some prepared questions). It would be interesting to see how technical their phone staff really is and how they handle someone with a bunch of questions.

Sometimes, having people with less technical knowledge on the front line can actually help with a lot of the burden you are facing. If you have someone with less knowledge on the phone, they will be able to turn that phone call faster. Once a caller realizes that they can't ask a million questions about how to do something, they may just order the part and figure it out themselves. Or, the less technical person can direct them to the exact spot on the website that gives the technical details the caller needs to and move on to the next call/email. They can also take phone numbers and/or email addresses that you could batch up to your more technical staff to answer once a day (instead of being interrupted all day long). You may have to write lots of content up front, but it will help tremendously with both customer questions and driving traffic through search results.

Good luck to you.

HRoth

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3321347 posted 10:23 am on Apr 27, 2007 (gmt 0)

I too am exhausted from selling a lot of small-ticket stuff to people who often need a lot of help with using it. I can't afford to hire the help I need either. I know this means there is something wrong with the way I have constructed my business, especially after I realized that I could sell 100 inexpensive items or 10 more expensive ones and make the same money, but wow, the difference in time invested is huge. I was afraid to sell the more expensive items, though--I thought my customers just wouldn't buy them and I would end up going out of business. But I am attracting a whole different group of customers I didn't know existed. Because they're more knowledgeable, talking to them by phone is less stressful and they actually give me a lot of ideas for new products. So I am gradually eliminating the inexpensive items and offering more high-end ones that are unique. It's scary, but it's working. This is also helping me to work better with competitors because they don't see me as a threat to their business--more and more, we have a different clientele that is complimentary.

I'm not sure how this would fit into the business of selling parts, but I wonder if you could specialize in certain types of parts that a) attracted a more knowledgeable customer who needs less help and b) are more expensive and thus more profitable.

I like the idea of a FAQ based on phone questions.

aleksl



 
Msg#: 3321347 posted 3:14 pm on Apr 27, 2007 (gmt 0)

We need more personnel, yet we really can't afford them. Our products are so technical, we can't just hire data entry people to write the description of each item

Toolman, ask yourself these questions:
1. Are you the most knowledgeable guy in the company for the widgets you sell? If yes, you are a technitian, not a business owner

2. Do you do occasional phone customer support yourself? If yes, you are a technitian, not a business owner.

3. Need more personnel, but can't afford it...means your business is in trouble. Big, big trouble. There's something you do that is seriously flawed - not delegate enough, not large enough profit margin, too much money spent in other places, the biggest profit areas are not tapped, etc. What you did is created yourself a J.O.B.

Get yourself out of the day-to-day routines. Take couple of days off. The business will not die. Take your phone number off the main page. Then try to look at things from another perspective. Routine is eating you and your business alive, you need to create processes that will work for you

Syzygy

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3321347 posted 3:32 pm on Apr 27, 2007 (gmt 0)

The amount of phone calls to help troubleshoot their products problem is endless. We support about 20 different manufacturers...

Where are the manufacturer's in this? Sounds like you're doing a fine chunk of work on their behalf, saving them the time, money and inconvenience that goes with customer support, and making them a profit at the same time.

Is it possible to defer certain calls directly to the manufactures?

Is it possible to pressurise manufacturers into giving you some support for effectively doing their job for them? Might they, for example, be affable to the idea of offsetting part or all of the costs associated with taking on an employee (or employees) specifically to deal with queries about their products?

Alternatively, could they be persuaded to help offset 'training costs' or indeed any other costs that might help you run the sales support aspect of your business more effectively? It would certainly be in the manufacturers best interests to help you support your, and their, customers.

Syzygy

JesperFJ

5+ Year Member



 
Msg#: 3321347 posted 12:35 pm on Apr 30, 2007 (gmt 0)

My webshops are only a hobby so far, and I hate selling low cost items. On one of the sites I charge a shipping fee of 23 USD for orders below 150 USD. This way I am sure that if people buy cheep stuff, they pay for the administration.

look at what tasks you don't want to do anymore (answering phonecalls obviously being one of them), and see how you can get rid of them or get payed more to do them. The premium number is an excellent idea. At least some of the questions must be possible for others to answer. Then have an employee screen the incoming mails and answer the easy ones and only forwarding the difficult ones to you. Let the same employee slowly build a knowledgevbase of previous answers so you don't have to give the same answer two or three times.

I hope you get your joy back in your work :-)

Jesper

RailMan

5+ Year Member



 
Msg#: 3321347 posted 10:35 pm on Apr 30, 2007 (gmt 0)

if its too much work for too little money, change the pricing and work methods or quit - simple
its a no brainer .....

junaid001

5+ Year Member



 
Msg#: 3321347 posted 9:07 pm on May 4, 2007 (gmt 0)

Hello skatingtoolman,
yours situation seems a bit similar to mime.
documentation & if you are making money and still cant afford technician then i would advice forgot profits for few months invest in human resource, concentrate on strategic issues and hopefully business would grow.

sniffer

10+ Year Member



 
Msg#: 3321347 posted 3:12 am on May 5, 2007 (gmt 0)

We have to drop ship some items and then order in others (due to minimum order amount required from our vendors) and then ship them out later. This generates a mass of phone calls and e-mails.

If possible I would include a printed copy of the FAQ/instructions/.. or the top ten reasons why people call up. A piece of paper. Forget the website...

Potosi

5+ Year Member



 
Msg#: 3321347 posted 6:24 am on May 5, 2007 (gmt 0)

Great topic - Agree with JSinger post

Hike your prices up ... not just on troublesome products but ones where you can take significantly more profit.
You've been running your business for 5 years - the shape of the market will have changed since you started. First push everything up slightly (test for 1 month/2months). If you get a big negative reaction stop and rethink. If not then hike by a bigger jump.

You should find that more profit will allow you to make you more money which you can invest into new processes and yourself!

If you are uncomfortable reorganising the processes yourself tell your local business support agency - they might be able to give you some advice/coaching for free.

duckhunter

10+ Year Member



 
Msg#: 3321347 posted 3:12 pm on May 5, 2007 (gmt 0)

Ditto on the excellent thread.

I agree with the Technical Service phone line. We give technical advice on our products too but it's usually just a minute or two before they make their purchase. If I was spending hours a day on the phone, I would definitely have to think about charging those people some dough. There are too many people out there that don't read the instructions and expect someone to tell them how to do it.

Before you start charging people for the call, however, you must have a few things in place so the customer doesn't feel like they have to pay $'s to get technical help. Those being Product Diagrams and FAQ sections. The customer should be able to figure it out themselves if they use the brain the good Lord gave them and read what's in front of them before they call.

Funny side story on this happened last week. Customer purchases product, we shipped to them. Phone call...

Customer: "I just got the products I bought and wanted to know how I should be using them?"

Me: "Did you read the full instructions on the side of the bottle?"

Customer: "Oh, there's instructions on the bottle?"

BTW: It's exhausting to make money regardless of your field. Most business owners give up when the exhaustion sets in. 90% of the people out there just aren't willing to work hard enough. If it was easy, wouldn't everyone be successfuly? Only those willing to push through the pain will succeed in the long run.

Patrick Taylor

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3321347 posted 10:20 pm on May 5, 2007 (gmt 0)

It's exhausting to make money regardless of your field. Most business owners give up when the exhaustion sets in. 90% of the people out there just aren't willing to work hard enough. If it was easy, wouldn't everyone be successfuly? Only those willing to push through the pain will succeed in the long run.

Thankyou! Best thing I've read all week (or probably month or even longer).

Oliver Henniges

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3321347 posted 4:01 pm on May 6, 2007 (gmt 0)

> We sell parts for machinery.

And you give away your knowledge for free.

But knowledge, patents, software, ideas, brands, functions are the things that count nowadays, not the physical material, which carries/contains them.

People think they may save a few bucks, opening a machine and trying to repair it, instead of buying a new one. But the steel, rubber or carbonite the machine is made of, is only one tenth of the story, five tenths comprise its immaterial functional principles. If people do not have the knowledge of these principles, they have to pay for that knowledge or the technician who has it.

Carefully start to say goodbye to those customers, who don't appreciate this principle.

It is the holy spirit which survived over the centuries, the bricks of the church buildings come and go. You don't even need the latter for a "service".

[edited by: Oliver_Henniges at 4:02 pm (utc) on May 6, 2007]

jbinbpt

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3321347 posted 12:25 pm on May 7, 2007 (gmt 0)

Customer support is expensive. We cut our support call times by telling customers that installation instructions were included. They are told to call if they needed additional help. The follow up calls help fine tune the instructions.

irish_john

10+ Year Member



 
Msg#: 3321347 posted 2:12 pm on May 7, 2007 (gmt 0)

Simple Solution.

Put up a support matrix of each of your manufacturers and their support number. Let the manufacturer take care of the support.

Oliver Henniges

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3321347 posted 6:57 pm on May 7, 2007 (gmt 0)

Just wanted to add a few more things that came to my mind. One in response to ecommerceprofit who said in msg #:3321455:

"just concentrate on a solid net profit...then go and sell your business."

It is far from easy to sell out any sort of (niche) B&M business, particularly if technical or other know-how makes a big part of the story and if - as in may cases - most of this know-how is available only in the owner's brain. Even if you make a million $$ turnover per year as OP; that isn't really very much if you pay too high a percentage to your suppliers. This leads to the second point:

In another thread in this ecommerce-forum someone suggested that margins should amount to 40% if ever possible, unless you rely on five-figure orders solely.

In skatingtoolman's case this would mean he has 400k per year to pay himself, his empoyess, storage, complaints, returns (oh yes: have you tried to return a drop-shipping? gosh..) and all the rest. How many full-time technicians can you pay as employees from that margin? two? three? And if he is a competitive area, where 40% are really hard to acchieve, you'll get an idea of what is going on behind the phones.

skatingtoolman:

1) What's your average margin?
2) What's your average order in $$?

ecommerceprofit

10+ Year Member



 
Msg#: 3321347 posted 5:27 am on May 8, 2007 (gmt 0)

Yes, buyers like easy to run businesses but they will also buy highly technical businesses if the seller can impart their knowledge to the new owner...in fact, having this specialized knowledge makes the business hard to duplicate which is defensive...anyway, if your net is high...trust me...someone will pay a premium...net is the most important part in my humble opinion...

This 34 message thread spans 2 pages: 34 ( [1] 2 > >
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