How to Manage Goods and Services for Your Online Business - dummies

How to Manage Goods and Services for Your Online Business

By Greg Holden

Shoppers on the web are continually in search of The New: the next new product, the latest price reduction or rebate, or the latest comment in a blog. Whether it’s in the form of words, images, or products for sale, your job is to manage that content to keep it fresh and available. You also need to replenish stock when it’s purchased, handle returns, and deal with shipping options.

How to handle returns

Your returns policy depends on the venue where you make your sales. If you sell primarily on eBay or another marketplace, you should accept returns, if only because many of the most experienced and successful sellers do. That doesn’t mean you need to accept every single item that is returned.

Most businesses place restrictions on when they’ll receive a return and send a refund. The items must be returned within 14 days, for example; the packages must be unopened; the merchandise must not be damaged.

Shipping rates

These days, when shoppers think about shipping rates, they think about a four-letter word: F-R-E-E. offers free shipping options. As a result, sellers on marketplaces like eBay are told to offer free shipping if possible. Even if sellers build a $10 shipping cost into a $50 item so the buyer pays $60 with “free shipping,” customers are still more likely to buy under such circumstances.

Otherwise, as part of creating a usable e-commerce catalog, you need to provide customers with shipping costs for your merchandise. Shipping rates can be difficult to calculate. They depend on your geographic location as well as the location where you’re planning to ship.

If you’re a small-scale operation and you process each transaction manually, you may want to ship everything a standard way. Then you can keep a copy of your shipper’s charges and calculate each package’s shipping cost individually.

You can also save time by using the quick shipping calculator provided by iShip. Just go to the site’s home page, enter the origin and destination zip codes, and click Go. You get a set of shipping rates from DHL, UPS, and the U.S. Postal Service so you can pick the most cost-effective option.

If you want help with shipping, you can set up your site with the help of a transaction hosting service, such as ChannelAdvisor. This company has an agreement with the U.S. Postal Service so that it automatically calculates shipping charges and includes those charges in the invoices it sends to your customers.

If you sell the same type of item all the time, such as a particular type of clothing, you can provide flat-rate shipping using a method such as the U.S. Postal Service’s Priority Mail option. You can even add a few dollars to the purchase price to cover the standard shipping charge to most locations in the United States and offer free shipping to your domestic customers.

How to maintain inventory

Shoppers on the web want things to happen instantly. If they discover that you’re out of stock of an item they want, they’re likely to switch to another online business instead of waiting for you to restock that item. With that in mind, obey the basic principle of planning to be successful: Instead of ordering the bare minimum of an item, make sure you have enough to spare.

If you have one store with 50–100 items in stock, managing inventory is straightforward. If you manage 13 separate storefronts as well as a brick-and-mortar store, you’d better call in some outside help to keep on top of it all.

Mimi and Peter Kriele operate the website Touch of Europe as an Amazon web store, as well as 12 other specialized sites. The Krieles use Miva Merchant to manage their main website. The inventory for all the other stores is taken from and managed using that marketplace’s tools for merchants. These are just two approaches.

Rely on software or management services to help you keep track of what you have. If you feel at ease working with databases, record your initial inventory in an Access or SQL database. A database forces you to record each sale manually so you know how many items are left. You could connect your sales catalog to your database using a program such as ColdFusion from Adobe.

Such a program can update the database on the when sales are made. But you may need to hire someone with web programming experience to set up the system for you and make sure it actually works.

If you sign up with an online store solution, like Yahoo! Small Business or a sales management provider like Marketplace Advisor Selling Services from ChannelAdvisor, inventory is tracked automatically for you. Whether you do the work yourself or hire an outside service, you have to be able to answer basic questions such as these:

  • When should you reorder? Establish reorder points — points at which you automatically reorder supplies.

  • How many items do you have in stock right now? Make sure that you have enough merchandise on hand not only for everyday demand but also in case a product gets hot or the holiday season brings about a dramatic increase in orders.

An e-commerce hosting service can also help you with questions that go beyond the basics, such as the purchasing history of customers. Knowing what customers have purchased in the past gives you the ability to suggest up-sells — additional items customers might want. But in the early stages, making sure you have a cushion of additional inventory for the time when your site becomes a big success is your primary responsibility.