Comments on: Common practice for e-commerce?

Question: Common practice for e-commerce?

astorias — Fri, 02 Jun 2006 19:28:02 -0800

A question about online commerce.

I'm thinking of taking a business online, and it was suggested to me that I should create a number of web sites under different company names to sell my products (at the same price across all the sites). I was told this way I could use yahoo and google effectively as well as give the impression that there are many different companies offering the product and that whatever price I set is the going rate. I know the web doesn't have all the laws of regular commerce (yet), but this sounds an awful lot like price fixing and consumer fraud. Or, is this the way business is done on the web?

By: b1tr0t

b1tr0t — Fri, 02 Jun 2006 19:40:25 -0800

Some may do that, but I think it is more typical to create a core storefront and then license out "branded" storefronts to different marketing agents.

There is a lot of fraud on the web, that doesn't mean you have to be fraudulent in order to be a player. Amazon, EBay, NewEgg, etc. all got where they are today by starting with small single storefronts.

By: richardhay

richardhay — Fri, 02 Jun 2006 19:42:38 -0800

I agree with b1tr0t. One of the most important things that a business has is its brand--its identity. You don't want to dilute that identity across multiple sites. My suggestion is to work hard building your product and brand and pull customers to your single core site.

By: b1tr0t

b1tr0t — Fri, 02 Jun 2006 19:51:47 -0800

Also, the branded storefronts I describe above are more typical of casinos, service providers, and other businesses where you want to push sales agents to move very large volumes of very similar sales.

Another tactic to avoid is link farms and other such questionable "search engine optimization." It may seem like a shortcut, but it can lead to your site getting blacklisted. Instead, work with a proper PR firm. PR Firms exist for all budgets and all markets, and they can make an incredible difference in your company's success. There are some good comments in this thread. Start with someone cheap (but skilled!) and local, don't mortgage your house to hire a big-name NYC agency.

By: acoutu

acoutu — Fri, 02 Jun 2006 21:13:27 -0800

Are distribution and marketing your core competencies? I don't know what business you're in, but you might want to consider working with a reseller, sales agent or other party, instead of selling directly.

By: filmgeek

filmgeek — Fri, 02 Jun 2006 22:43:43 -0800

Wait a second. Isn't this how large companies like General Mills works? They have several products that compete in the same market? Or the soda business?

I don't think there's anything unethical to this at all. If I can buy the product (as a competitor, and wholesaler) and sell it lower than you, then all of your sites will have to lower their prices (or face the loss of sales.)

By: malevolent

malevolent — Sat, 03 Jun 2006 04:16:43 -0800

Don't do the whole spammy thing of numerous sites unless you're selling something dodgy and don't care about your reputation.

Focus your efforts on brand-building around one good site (and/or sell through existing retailers). As you're seemingly an ecommerce novice, I'd recommend hiring someone to help you make the right impression, pursue the right online relationships, offer the right features/content, etc.

By: raf

raf — Sat, 03 Jun 2006 05:56:34 -0800

I agree with most of those above that it's vaguely sleazy. But it's *not* fraud; you're not lying to people.

By: Mick

Mick — Sat, 03 Jun 2006 06:28:34 -0800

Set up a store and then look to start an affiliate program (if you have high enough margins).

Be careful about your aggrement though, don't let you afiliates dilute your brand too much.

I've heard a lot of good things about Commision Junction. They'll help you set up the program and monitor it.

By: muddgirl

muddgirl — Sat, 03 Jun 2006 09:35:40 -0800

Isn't this how large companies like General Mills works? They have several products that compete in the same market? Or the soda business?

Not really - in these cases, economists consider the products to be differentiated (ie, there are small differences between them as products in the consumer's mind). astorias is describing a scenario where Coca-Cola sells the same formula for the same price under two brand names in the same market.

give the impression that there are many different companies offering the product and that whatever price I set is the going rate.

Why is this even necessary? If your products are desired, and there aren't a lot of companies selling them, I don't see the advantages to spreading out your time and energy among a bunch of different sites, rather than focusing on a core business.

By: kindall

kindall — Sat, 03 Jun 2006 09:42:18 -0800

One thing that might be worthwhile is to make a couple of different sites to do price discrimination. Make a fancy-looking site that sells your products at one price, and a somewhat slapdash-looking, low-overhead-vibe site that sells the same products at slightly lower prices. That way you can capture sales from people who love to get deals and won't buy anything unless they think they are getting a discount, while providing an apparent incentive for people willing to pay a higher price to do so (the high-priced site is more nicely designed and thus seems more "trustworthy"). Lots of companies do this sort of thing -- when I worked for an Apple II mail-order company, we acquired a competitor who was known for their rock-bottom pricing and kept their phone number, prices, etc. to capture the cheapskate segment of the market -- and it worked well too.