3 Common Mistakes of Online Retailers

March 7, 2011

Since the early years of the internet, many online retailers have fallen victim to antiquated business models that drastically limit their ability to grow their business and profits. The following are a few common mistakes that many online retailers make when selling their products online.

Mistake 1 – Never Limit Yourself to One Product
Focusing on a single products causes your business to have one major point of failure. There are several reasons why you do not want to focus on one product, including the fact that:
• Markets are Cyclical and Constantly Fluctuate

Your single product make sell well during a particular season, but may not be suitable for year round business. You also have to consider that your product may fall out of favor with the market or become outdated and obsolete.

You Lose Other Selling Opportunities – Every business wants repeat clientele in order to increase business. However, it is difficult to build a strong customer base if you only have one product to sell, especially if the product is not a consumable product. It is beneficial to at the very least have supplementary products that can add value to your main product.

Mistake 2 – Lack of Product Uniqueness
You must set yourself apart from your competitors that may be selling similar products. One way to do this is by adding value to your online store by educating your customers on the benefits of your products and adding additional tools and resources that will help them to use your product more efficiently. For Example:

• If you sell fitness products, you might give your customers free nutritional plans, or…
• If you sell music equipment, you might give your customers a free mini-lesson on how to play the guitar or piano, etc.

Adding value to the purchasing experience of your customer will help you build trust and credibility with your customer base that will set your business apart from the competition.

Mistake 3 – Selling Products Based on Profit Margins
Many businesses will refused to sell a particular product is it did not make minimum amount of profit. This may seem like a smart idea, but sometimes this strategy can hurt the growth of your company. If you think about an electronics store, many of the products have small profit margins. However, the accessories that are associated with these electronics tend to have a huge mark-up and will add to the profitability of the company.

If a store only chose to focus on selling the high margin accessories, it may quickly find itself in a place where customers are not interested in shopping because of its lack of interesting products that motivate the customer to buy, regardless of its profit margin. By focusing on products that serve the interest of the customer, you will be positioning your company as the go-to place for cool products which will surely lead to increased sales and long-term growth.

Overall, if you are able to avoid these 3 common mistakes of online retailers, you will be well on your way to achieving success in the drop shipping industry.

Business Model Drop Shipping dropshipping internet marketing Niche Market online business online retailer retail business Small Business Owner

3 Common Mistakes of Online Retailers

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