If you are frustrated or confused about the world of online shopping, I hope this article will help to de-mystify the process, the players and the pitfalls of purchasing your products online. Please keep in mind that I write this from my own personal experience, both as a shopper and as an online merchant, and I don't have all the answers. Just some basic, honest, down to earth advice for you. So, if you care to know the truth about the online marketplace, keep reading.
THE PROCESS Once upon a time, when you wanted to buy something, you got in your car and went to the store. Life was simple. Either they had what you wanted or they didn't. The price was displayed on the shelf. You got your goodies and went home. With the introduction of online marketplace purchasing, many things have changed. Now you can get online, compare prices, look for free shipping, watch TV in your underwear, and wait for the package to arrive in the mail. It all seems so easy, but customers often get frustrated when items they order are suddenly not in stock, they receive the wrong item, are lied to by unscrupulous fly-by-night online merchants, or worse, get ripped off. Without the transparency of a "brick and mortar" storefront, the customer becomes vulnerable to online fraud and bad customer service. It can be frustrating. I know.
So, how do you know who you can trust? How do you know when you put that credit card information into an online store's checkout system that you are safe? Well. Basically, you don't know. But there are some things that you can do to make informed, and shop-savvy choices about who you buy from, minimizing your risk.
THE PLAYERS First, you need to know WHO is out there selling products. I've categorized them into three basic types of online merchants:
1. Brick and Mortar Stores. These stores have a "real" store somewhere in the world, and they use their website to generate additional sales. They will follow the old-school process for fulfilling your order. Most likely, they have it in stock in their own warehouse and will ship to you directly. These are the traditional retailers of our communities, the ones you know mainly already. In my opinion, these websites are safe bets, although you may run into some customer service differences among them, they are generally trustworthy.
2. Dropshippers. These are "internet only" webstores that contract with manufacturers and distributors in other locations to ship products directly to you. They receive product datafeeds and inventory from the warehouses that they contract with and provide all the customer service and absorb the advertising costs associated with online sales. Most dropshippers contract with the same warehouses, so if you have ever tried to find an item in stock, and called around to different online stores and they all seem to have the same number of items in stock or give you the same ETA on a product on backorder, this is why. They are all using the same warehouses (distributors) to get their products for you. This group is a mixed bag. There are some great dropshippers out there, and because they do not have the added expense of retail store space and the staff to run it, they generally can offer better prices on the same products. And, there are some sketchy dropshippers out there, who provide terrible customer service and may string you along with promises on "backordered" items or who may go out of business in a day. You will know who these merchants are because they will not give you a physical address for their storefront on their website. In general, you can find great deals with dropshippers, you just need to do your research with each of them before you purchase. And once you find a good dropship website to purchase from, bookmark the site so you can check back.
BEHIND THE SCENES Now, all that being said, you need to be aware of what is happening behind the scenes between manufacturers, distributors, and dropshippers to understand how some of the online pricing works. Because dropshippers can offer products at a reduced price, this has caused some of the brick and mortar stores some serious angst. It makes it very hard for them to compete. To solve this problem, many manufacturers have created something called a MAP POLICY. MAP (Minimum Advertised Price) Policies generally set a minimum price on each product and require that their retailers all agree not to sell that product below that price. When a retailer attempts to sell that product at below that price, often the manufacturer will refuse to sell to them anymore, thus keeping prices high enough for a level playing field between the traditional retailers and the dropshippers. Some manufacturers have gone as far as excluding all dropshippers from their supply chain, to further reduce competition online.
There was a recent Supreme Court case in 2007 that overturned a 1911 anti-trust law on price fixing that allows this practice to continue legally. What does this mean for you as a consumer? In general, it means higher prices. You may have noticed that on some products, the price is always the same, even when it's "on sale". This is why. Even when an online retailer is perfectly happy to sell a product to you for less, they cannot, lest they invite being cut off from their product supply.
(This MAP Policy practice remains controversial, and many still believe that this is a form of price fixing; others contend that it is a necessary market strategy and keeps things fair for everyone. The Supreme Court case in 2007 was a close vote (5 to 4), if that tells you anything.)
3. Shopping comparison sites and online marketplaces. These are online businesses that make their money listing products for sale that are sold by retailers and online dropshippers (except for Amazon, more on that later). They don't carry the products themselves or provide customer service. Their only service is to allow the customer an easy way to find and compare prices on the items they want. It's a great way to do your shopping. However, not all online shopping comparison sites are created equally, either.
Some are free for merchants to list their products, and some charge the merchants some kind of fee (percentage of the sale, cost per click, cost per order or a monthly advertising fee). This might not seem important to you, as a consumer, but it is, and here's why: the cost for the merchant to use these sites can be very high, per order, and the more costly the advertising, the higher the price to the consumer in general. Somebody has to pay the advertising costs, and it's usually the customer. If you use a site that has high advertising fees, most likely, you will not even see the smaller discounted sites because they can't afford to advertise on those sites. You could be missing out on some great deals! If you really want to hunt down the lowest price, your best way to do this is to use one of the free shopping comparison sites, which are: - Google Product Search
- Bing Shopping
- The Find
- ShopWiki
You will be finding most, if not all, of the stores that are selling what you want. Of course, you will see "sponsored" search results and other ads on these sites as well, but at least it's obvious that the merchant paid to have their site listed!
Examples (there are over 60+ currently and growing) of shopping sites that charge merchants to advertise are: - Nextag
- Shopping.com
- Shopzilla
- Pricegrabber
- Ebay
- Ponto
- Buy.com
- Price.com
- (and most others like this not listed already under the "Free" section above.)
Now. I know what you're thinking. "Amazon has the best prices!" And, in some cases this is true. HOWEVER, Amazon belongs in a class all by themselves when it comes to online shopping because their business model is completely different, and the way that they make money is different. I was an Amazon merchant at one time, and it was an eye opening experience for me, and not a good one. When a merchant lists a product on Amazon, they are charged a percentage fee every time an order is made. OK. Fair enough. However, Amazon collects the customer's money FIRST and this is important because cash flow is everything in retail. They collect the customer's money, and in some cases, they will not release the money to the merchant until 30, 60 or 90 days after the purchase has been made. They INVEST that money internationally and make money on their investments. Meanwhile, the merchants must pay for the merchandise and ship the product out immediately and bear the cost of the transaction for a period of time. This has proven devastating to the small merchant. Amazon also warehouses and fulfills some of their product orders themselves, using their purchasing power to get lower prices, and in doing so, competes with the same merchants that are paying to sell on their site, making it difficult, frustrating, and in some cases, outright impossible for the merchants that partner with them. In a nutshell, Amazon is hurting the small business owner, and this hurts our economy in general. I don't buy or sell on Amazon and I suggest that you consider removing them entirely from your list as well. 'Nuff said!
THE PITFALLS: ONLINE FRAUD One more note about online fraud and how your credit card information is used. You will notice that some merchants take your credit card information on their site, and others will direct you to Paypal or a Google Merchant Account. Depending on the website's SSL Certificate and the encryption technology that they use, placing your credit card information directly into a website may not be as safe as you might think. When you pay with Paypal, the merchant never sees any of your credit card information. It is stored on Paypal's secure server. The same is true with Google.
However, when you enter your information directly into a website's checkout page, every employee of that business will have access to your credit card number. If their site is not REALLY secure, this information may be hacked into by third parties. The risk factor gets raised much higher, even if the site is secure, you have no guarantees that the employees and the trash collector aren't taking that information and selling it to some dude in Nigeria or Taiwan. Credit card numbers get bought and sold online every day. It happens so fast it's mind boggling. I had one online order from a customer who used his credit card at a coffee shop in Miami, and had his card used by a third party and maxed out within 15 minutes! Bottom line: the fewer people that have your number, the less risk you bear. I suggest using Paypal and Google whenever possible and keeping your CC number to yourself.
Also, whenever possible, don't hand your actual card over to anyone for any reason. Swipe it! Fraudsters are notorious for taking your card away to charge it, copying your 3-digit code, number and expiration date off the card, and walking straight back to a back room to sell it... all while you are still having your after-dinner coffee. Just sayin'.
Now. How about us? Who are we and how do we conduct business at Into The Wilderness? Well, for starters, we're honest. You can be sure that when you shop at Into The Wilderness, we will ALWAYS be honest with you. We won't take your money and run. Promise!
1. We don't collect your credit card information at check out. That's why we use Paypal exclusively. Nobody here will ever see your personal information, except for name, address, phone and product information.
2. We will let you know (for real) what's in stock and how long you can expect an item to be on backorder. We update our stock information every twenty-four hours and you will receive a call from one of our staff members if your item is not in stock, giving you the opportunity to find the item elsewhere. We won't string you along with emails or promises. If we don't have it, we'll tell you right away and we'll do our best to get an ETA for you as well.
3. If there is a discrepancy between the price on our store and a price for our same product on our store's listing on a shopping comparison site, including incorrect shipping fees, we will honor whichever price quote is lowest. It's only fair.
4. If you receive the wrong item from us, we'll gladly exchange it for the right one and cover the shipping costs.
5. If you receive your item and it is broken, damaged, or defective, we will work with you, the manufacturer or the shipping agent to make sure that your purchase is returned, refunded, or exchanged for the right item in good condition.
Customer service is important to us. Our customers are important to us. Without you, there would be no 'Into The Wilderness' and we take that very seriously. We're in this for the long haul, and we hope you will be one of our customers for many years. So. Rest easy and give us a shout if you have any questions.
Honestly.
-- Jo Hannah Afton, President and Founder
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