Why Do Some Retailers Not Have Online Shops

September 13, 2019 6:44 AM

Hi Folks, I would like to understand why some retailers do not have online shops. I have seen some businesses with no online presence at all, and others that have great websites to showcase a product, but customers are unable to order products through the website. If you own a small business or work in one, what's keeping you from providing an e-commerce experience for your retailer? - Steven
posted by stevenpl to Shopping (19 answers total)

Shipping is a royal pain in the ass, especially for a small business owner. Taking attractive photographs is also quite hard to do and a lot of work. Managing two inventories - what's available in store versus what is shipping can also be complicated. Sometimes people open a shop because they have a romantic idea of owning and curating a shop but getting online with all the attendant hassles is just too much.
posted by amanda at 6:52 AM on September 13, 2019 [18 favorites]

Some retailers are also not allowed to sell some goods online because their product suppliers already have online stores and do not want competition.
posted by srboisvert at 6:59 AM on September 13, 2019 [7 favorites]

Best answer: both the front end (paying for the design and maintenance of a sale site with secure payment portal etc) and the back end (inventory, packing things up, getting it shipped, a returns process) require significant, ongoing cash outlay and special expertise.
posted by fingersandtoes at 7:00 AM on September 13, 2019 [12 favorites]

Lots of businesses don't sell anything of their own manufacture, just generic stuff they order from other places. And Amazon can also order from those other places.

Selling locally, you can offer the brick-and-mortar experience that Amazon doesn't. Selling online, how do you compete with Amazon? There's room for online businesses that offer curation and expertise, but that's still a struggle against Amazon offering low prices and free shipping.
posted by jacquilynne at 7:14 AM on September 13, 2019 [2 favorites]

Our in-store POS system won’t sync up with our online store (despite being advised that it would) so keeping track of inventory becomes a laborious process.

Properly shipping merchandise is *expensive* and nobody wants to pay for shipping. I usually end up eating into my margins to pay for the cost of shipping (to say nothing of the $4 mileage that I expense each time I go to UPS).

Almost everything we carry in store that isn’t branded or name-dropped with our organization or location has some kind of restriction on selling it online.

Long story short, running a web store is an entirely different experience than having a physical retail location. Ours gets such low traffic (I charge what it actually costs for shipping, and we’re a small nonprofit anyway) that I keep it going, but it’s really more of a nice thing I do to be helpful to out-of-towners than a part of our business.
posted by BuddhaInABucket at 7:14 AM on September 13, 2019 [9 favorites]

I shop at some local yarn stores that don't sell online, and I think it's basically that they can't compete with big online yarn retailers, which have bigger inventories and are cheaper. (I don't think Amazon is a factor in the fancy yarn business, but specialized online yarn retailers definitely are.) It's cheaper to rent warehouse space than retail space, and there are economies of scale when you sell tons of stuff online. So instead of wasting resources on an area in which they can't compete, they focus on the stuff that online retailers can't give customers: the ability to see and feel the yarn, hands-on help and advice from expert staff, in-store events, and a sense of community.
posted by ArbitraryAndCapricious at 7:27 AM on September 13, 2019 [13 favorites]

Because it's a lot of work.
posted by humboldt32 at 7:51 AM on September 13, 2019 [2 favorites]

not only is shipping a huge hassle, but customers have been trained by amazon to expect free shipping. so you have a pricing problem too.
posted by lescour at 8:01 AM on September 13, 2019 [11 favorites]

Free two-day shipping, even, so drop everything else you're doing and get those orders out the door immediately, because they're not going to be happy with free shipping that takes a week.
posted by ArbitraryAndCapricious at 8:03 AM on September 13, 2019 [10 favorites]

In the UK, distance selling regulations require refunding the initial postage if the item is returned, so for a small business with small margins the extra profit from online sales can just be eaten up by postage loses and therefore not worth all the extra hassle.

Also, some things just don't ship well. Especially anything with glass, the breakage rate can be surprisingly high and no courier will insure it because glass.
posted by stillnocturnal at 8:16 AM on September 13, 2019 [2 favorites]

I once set up an online shop selling five t-shirt designs, each in three colors and six different sizes. We were a nonprofit and didn't want to pay for a prepackaged "shopping cart" system so I ran the payments through Amazon (PayPal was more expensive iirc, and we worried about losing customers by asking them to run cards through anywhere unfamiliar). It was a gross mess of coding work. It routinely broke, or Drupal updates routinely broke it, or both. And it didn't even track inventory, so I was perpetually trying to do that manually with little tables on the website, but people would still order things that didn't exist, and then I'd have to go back and forth with them picking something else. If the product did exist, or they chose a substitute, I then had to package it and make a trip to the post office during their hours. Our customers were always fine paying shipping, thankfully (I rolled the shirts into flat rate envelopes and could usually fit up to three for around seven bucks), but overall as a business model it just really did not work for us. For a while we tried to scale it back to offering in-person pickups for local customers, but even that was a headache. All we actually wanted to do with the shirts was take them to events and sell in-person. Having them on the website opened up additional revenue opportunities, sure, and got them out to distant supporters, but it was a total hassle and ultimately not worth it.
posted by teremala at 8:17 AM on September 13, 2019 [3 favorites]

Overall, you're making an assumption that online selling is going to be profitable and a good use of a businesses resources. That is not always the case.
posted by AugustWest at 8:18 AM on September 13, 2019 [11 favorites]

People won't pay the extra it would cost them to run the online business. Websites with shopping carts aren't cheap to run, host, manage & keep updated with stock as it comes in & sells out. If they are running on tight margins anyway & have to compete with Amazon it's probably not worth their effort to sell things at a loss, where as Amazon has such quantities it can make a penny a sale & still make a huge profit. Having said that if you know what you want a lot of small stores are fine with you ringing up & ordering over the phone, just be aware you won't get free shipping & the actual cost of packing & shipping is usually not cheap.

I say this as someone that ran a small secondhand bookstore in the years before Amazon came along, shipping & packing is a pain, profits where low but it was a nice extra income stream then without Amazon to compete against. I managed to last 12 months once they came along before stopping online sales and this was back before Prime, but they drove book prices so low we couldn't compete.
posted by wwax at 8:26 AM on September 13, 2019 [2 favorites]

Your question seems semi-focused on small businesses, but when it comes to mid-size or larger corporations, there are plenty of case studies around why the supply chains for the business model of a brick-and-mortar (as the physical locations are known in industry) vs. that of an online seller are logistically dissimilar enough to require entirely different delivery networks.

This is why big brands like Macy's and Walmart and their ilk have basically operated their online presence as an almost completely unique entity from their b-n-m corporations. Macy's b-n-m is operated out of NYC, their dot.com out of SF. Walmart's in Alabama but their dot.com is in South SF. ...et. al.

A distribution center that serves many b-n-m retail locations basically needs to receive shipments of pallets of product and then separate whole or partial pallets for delivery to the retail locations in bulk. You don't even really need a distribution center for an online presence, you just need a massive and hopefully mostly automated warehouse that can break inbound pallets down into bins, from which individual stock units can be picked to be packed for shipment (a la Amazon).

End consumers may wonder why the models are so different to run a profitable business in selling them the exact same product, but the back end for the two retail models is very, very different. And that's just on the route from producer to consumer. You have a whole nother case study when it comes to return logistics.
posted by allkindsoftime at 8:33 AM on September 13, 2019 [8 favorites]

When you sell in your store, each sale has the same state, city, and local sales tax rate. When you sell online, to many states and cities, it is very hard to know what sales tax to charge on each sale. Then you may have to send each of those states that money. Somehow. Each state can have new rules each year of course.

My city just raised their rate, effective October 1. Yeah, for this year we have two rates. Better keep track!
posted by fritley at 8:38 AM on September 13, 2019 [3 favorites]

Customer service in brick-and-mortar is a nightmare and customer service online is doubly so.
posted by Wossname at 8:42 AM on September 13, 2019 [1 favorite]

Remember this commercial?
posted by niicholas at 10:07 AM on September 13, 2019 [1 favorite]

In addition to everything above, there could be a luxury component. Keep in mind that selling more of a product is not always the desired goal. Decreasing supply increases price, so if you limit sales to people who have the ability to shop in person, you might be able to charge higher prices and make your brand seem more exclusive.
posted by kevinbelt at 10:09 AM on September 13, 2019

A relative runs a small retail store, many of the items need to be fitted for the individual using them, and that is part of the service customers want. They actually do ship but usually only to those experienced in that field, and actually have some customers who do this sort of fitting for others and regularly place large orders.

Some of the items sold, the manufacturer prohibits the retailer from selling online.

Then there are also retailers like framing shops, which require the customer to physically bring something to the store before the frame can be purchased.

Your question sort of reads like you want to start a wonderful new product for retailers to use to bring an e-commerce experience to their customers, so I'll mention that while the time and cost involved with running a sales website is part of the reason why some businesses don't do this, there are already many companies that call all the time wanting to "help". It's an annoying time sink to deal with people who have a bunch of shitty ideas about how they can "help" with your web presence, so even if your plan for this is actually and genuinely wonderful you are going to have a tough time getting through.
posted by yohko at 6:01 PM on September 13, 2019 [3 favorites]