Home > Sell On Amazon > Why Do People Buy Online From You?

Why Do People Buy Online From You?

I talked in a previous post about why people buy online.  For products that they do buy online, why do (or will) they buy from you and not from someone else?  It’s tempting to dive into the mechanics of selling without having a good answer to this question, because the mechanics are well documented and understood.  But having a good answer to this question is necessary to avoid failure.  Keep in mind that your answer can change over time as you learn, mine still does, albeit less frequently than it used to.  But at all times you should have a crystal clear idea of why people are going to buy from you and not someone else.

One part of your answer must include how buyers will even know you exist.  If you’re selling on a marketplace like Amazon or eBay you’ve answered this: They know you exist because the marketplace got them to the website, and your products turned up in their product search.  If you weren’t selling on a marketplace where someone else is doing the work of bringing customers to the website you would have to spend a great deal of time and money getting buyers to know you exist, and if you’re not an expert on marketing there’s a good chance you wouldn’t succeed.  This is the #1 reason I recommend new online retailers start on Amazon.  Once your business on a marketplace is up and running and doing well you can use some of the profits from it to branch out and sell on your own website.  Until then letting someone else spend the time and money bringing customers to you lowers your risk substantially. 

Since you’re a new retailer, from here I’m going to assume that you’re selling on Amazon, though much of this will still be applicable generally.  When you’re selling through a different channel you’ll need to revisit these considerations and come up with concrete answers.

Back to why people will buy from you.  Another part of the answer that you’ll probably come up with is that your price is lowest.  It’s certainly true that you need to be price competitive with other retailers selling the same product.  When someone selects a product page on Amazon one retailer has the ‘Buy Box’.  Ie, that retailer gets the sale if the buyer hits the ‘Buy’ button directly on the product page.  This is generally the retailer with the lowest price, but not always.  The product page also has an option to display all retailers selling that product, sorted from least expensive to most expensive.  If the customer selects that, he can buy from any retailer that offers the product on Amazon.  Customers will sometimes choose a retailer that isn’t the lowest price, but even in those cases the price will need to be close to the lowest to be considered. 

Why would anyone choose to pay more when they can get a lower price with the click of a button?  First, they may prefer a retailer that they know rather than a retailer they’ve never heard of before, with Amazon itself being the best example of this.  Second, some customers prefer to buy from retailers that use Fulfillment By Amazon, since this is essentially the same (from the customer’s perspective) as buying from Amazon.  Some customers prefer to buy from large retailers rather than small retailers, even if they’ve never purchased from the large retailer before.  Amazon displays as part of the product listing how many customer feedbacks you’ve received on Amazon.  One can tell from the number of feedbacks you’ve received approximately how large of a retailer you are (at least on Amazon).  Some customers prefer to buy from retailers that have a higher customer feedback rating.  Your customer feedback rating is also displayed on the product listing.  Finally, being a Featured Merchant means your listing will show up above anyone who isn’t a Featured Merchant, even if your offer is more expensive.  Being listed higher on the page definitely helps attract buyers.

Some of the above are things you can control, and some are not.  Using FBA will help right away, and since Amazon’s order fulfillment is quite good it will lead to good feedback ratings, helping you in the long run as well.  Customers will generally prefer Amazon over anyone else, even if you’re using FBA, so selling against Amazon is generally difficult.  Avoiding this is probably a good idea when you’re first starting.

Amazon doesn’t publish how you become a Featured Merchant, but from my observations it’s a combination of how long you’ve been selling on their platform, how many sales you have, and what your feedback ratings are.  If you actively sell on Amazon for several months to a year and have good feedback I would expect you to get Featured Merchant status, though obviously there is no guarantee.

What I’ve found to be the enabler for good sales volume on Amazon is the combination of 1) using FBA, 2) being a Featured Merchant, 3) having high feedback ratings, and 4) having competitive prices (not necessarily the lowest price, but it must be close to the lowest).

Random Observations

For the most part, ordering from manufacturers is pretty straight forward.  Two to three weeks after placing an order the merchandise shows up, and everyone is happy.  Some manufacturers, however, have little quirks that you have to learn to work with.

For example, a few months ago I started working with a new manufacturer whose products looked like a good fit for me.  I placed my order, and got a response that it had been entered, but after about a month no merchandise had shown up yet.  I sent a note to the sales rep, who looked into it and found there had been a mix up, but he got it straightened out.  Sure enough a couple of weeks later the merchandise showed up, and it sold very well for me.

Happy to have found another good product line to carry, I submitted a second order to re-stock.  After a month went by with no merchandise, I sent a note to the sales rep.  Another mix up (different than the first), which he straightened out, and I received my merchandise a couple of weeks later.

Again the merchandise sold out quickly, and anticipating problems I placed a third order as soon as I received the second.  After a month with no merchandise, I sent a note to the sales rep.  Another mix up (unspecified this time), which he straightened out, and I received the merchandise a couple of weeks later.

Suspecting that the manufacturer was holding my orders waiting for something on back order (which is uncommon but has happened to me before), for my fourth order I asked the sales rep to check product availability first, and drop anything from the order that wasn’t immediately available.  Pay dirt!  This time I received my order in two weeks.

One time doesn’t make a pattern – it’s possible I just got lucky on my fourth order.  Only time will tell if being out of stock was really the reason for the delayed shipments, but I’m hopeful.  The product line continues to sell well, and I would rather have what’s available than wait for something that’s out of stock.  I would think the manufacturer would prefer to ship what’s available immediately as well, but it’s possible they’re trying to minimize shipping costs.  Perhaps other retailers generally prefer to minimize shipping costs, and they’re just doing this for my benefit without asking.

Whatever the reason, I now know that for this manufacturer I have to specify to drop anything not immediately available from my order.  I should probably write that down, but presently I just remember these little quirks when placing orders.

 

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