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October 29 , 2007 |
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Marketing Methods and Alternative Options for 2008 Part I
by Chip Arndt
 Miami, FL (October 29, 2007)—The good news for the small to mid-sized online merchant is that there is a growing number of e-commerce focused companies that can help you grow your online sales, enhance your storefront design and navigation, and improve your online marketing efforts all in the name of revenue growth, more loyal clients, expanding your marketing reach, and building your brand.
The bad news is that often times small to mid-sized businesses do not have the time to either find the right business partner for the job or the time to research what marketing efforts to initiate "first or next" and with which company to implement those new efforts.
MerchantAdvantage is here to help with all of the decisions with its own cost-effective data feed management solutions and its relationships with other companies, who offer excellent products and services to help you increase revenues and improve your return on investment ("ROI"). In this newsletter, we offer insights into some marketing ideas that may be familiar to some small to mid-sized merchants and new for others.
We also highlight some companies that we believe can help you execute these new marketing strategies and are easy to work with on an ongoing basis. As MerchantAdvantage has created close relationships with these companies, we are always here to help you manage those relationships, as needed and when appropriate.
Overview of Current Marketing Options
Options, options, and more options! I am sure I will be missing out on some wonderful marketing ideas, but here are the main ones that MerchantAdvantage thinks can help you immediately and, more importantly, that you should probably master first. Understanding more traditional marketing methods and executing your strategies with them "perfectly" will help you with other more "unique" marketing methods into the future.
Comparison Shopping Engines
Definition:
Comparison Shopping Engines, or affectionately known in the business as CSEs, were the original business model for online shopping that aggregated online merchants into "virtual, online malls" and relied on a Pay Per Click ("PPC") business model. To make money, the CSE brought to their URL -- or online mall -- "qualified" customers who then would find an online merchant’s product listings, click on a product, and be redirected to the online merchant’s URL from the online mall. For this "lead" to the online merchant, the CSE charges the online merchant a small click fee.
While not exactly an "alternative" marketing method, the PPC business model, since its early days in the mid 1990’s, has evolved from flat click fees across entire inventories of products to sophisticated pricing structures per SKU, per category, per sub category and per client. Some CSEs have introduced hybrid pricing methods that allow for SKU level bidding, flat pricing for certain categories, and flat fees per month for listing an entire product catalog. Because there are over 100 CSEs, and they all now seem to have their own pricing methodology, the only way to know exactly what it will cost you to list with a particular CSE is to call them directly and negotiate off of their listed rate card and/or their "hybrid" offerings.
MerchantAdvantage has close relationships with over 75 shopping destination sites and would be happy to assist you in reaching a contact person, if needed.
Mission to Working with CSEs:
Let's keep this simple. Here are three main reasons to work with CSEs:
- Reach
A. Millions of consumers start shopping at CSEs to find products
B. Over 62% of those shoppers who bought a product after visiting a comparison shopping site spent almost 25% more than shoppers who did not use a CSE
- Small pay per click fee for potential sales lead
A. More cost effective way to get leads than many forms of advertising and marketing
- Choice,
A. Over 100 CSEs from which to work with. You can find CSEs that work very well for you, you just have to be willing to spend some time to test them out to see which ones work best for you.
Here are three main issues when working with CSEs:
- Leads not necessarily sales
A. Managing your click to purchase ratio to maintain good ROI
- Managing budgets, IT feed issues, upkeep and effectiveness of each feed
A. Just feeding product catalog data and not managing marketing campaigns leads to failure
- So many CSEs from which to choose, where do I begin?
A. How do I know which CSEs will perform best for me and do I have time to find the right ones = test, test, and test again. There are many options, large and small.
Recommendations to Working with CSEs:
- Considering the proliferation of CSEs, online shoppers, and the growth of both e- commerce and mobile commerce, we believe it is worth your time to see how CSE marketing campaigns fit into your online marketing strategy.
- Find out which CSEs best market your products and see if there are specialty, niche CSE sites, such as GolfPricer.com, BobVila.com, ToolCrib.com, HGTV.com, or even Cooking.com, that may perform better, or, as well as large sites.
- Test, test and test again. If a CSE is not performing the way you expected, it is not recommended to just pull your product feed from them. Rather, use your analytics tool to see what is selling and what is not. Ensure that you are sending a feed that is "perfect" with all the appropriate taxonomy information required for each CSE.
- Samples of CSEs:
A. Lots of Merchants and Unique visits: BizRate.com, CNet.com, NexTag.com, PriceGrabber.com, Pronto.com, Shopping.com, Shopzilla.com, and Yahoo! Shopping
B. Mid-sized: Become.com, BuyersEdge.com, Gifts.com, JellyFish.com (a hybrid CSE and marketplace), and Smarter.com
C. Niche Players: BobVila.com, FindGift.com, GolfPricer.com, HGTV.com, ShopandPrice.com, and ToolCrib.com.
D. New Players: ShopBig.com, Like.com, PlanetOnline.com, PriceForSure.com, SortPrice.com, and mPoria and mShopper (both mobile commerce CSEs)
For a good list of CSEs, please see MerchantAdvantage.com
Marketplaces
Definition:
Marketplaces are still online shopping destination sites, but on these sites the consumer transaction takes place on the marketplace site, not the merchant site, and the merchant is sent the order from the marketplace site to fulfill shipping.
Marketplaces can be excellent to work with because they take over all fiduciary processes associated with a transaction and only charge you when you make a sale. That is the good part.
The fees associated with marketplaces can be heavy to set up an account, especially with Amazon, and the ongoing commissions related to sales can also be steep. Commissions normally range between 10-20% of the sales price of the product. In addition, the online merchant loses some branding as the transaction is not redirected back to your storefront.
On the technical side, setting up, managing, and optimizing your product catalog feeds to marketplaces can be unwieldy, as the taxonomy requirements of the marketplace are numerous and unique for each type of product catalog. The upside is that once you are set up with a marketplace it's generally profitable. MerchantAdvantage is the only tool based data feed management solution in the marketplace that can help you with all of these details for marketplaces, at a very reasonable price point.
MerchantAdvantage has close relationships with Amazon.com, JellyFish.com (a hybrid of a CSE and marketplace), Shop.com, and Underbid.com, so please call us if you are having any problems working with them. We can help.
Mission to Working with Marketplaces:
Here are three main reasons to work with Marketplaces:
- Traffic = They have the customers:
A. The main marketplaces as Amazon.com, Shop.com, and JellyFish.com have lots of consumer awareness, traffic and potential buyers, i.e. their brand name and marketing efforts are much bigger than what you could do on your own.
- Pay Per Sale
A. You only pay initial set up fees, which are sometimes waived for MerchantAdvantage clients, and pay a commission only when a sale is made.
- Fiduciary Responsibility
A. Marketplaces typically take over all fiduciary responsibilities and costs associated
Here are three main issues when working with Marketplaces:
- Managing Margins and Cost of Initial Set Up
A. Maketplaces usually charge an initial fee to set up an account and charge on a commission basis. These one-time set up charges can go as high as $4,500, or more, and commissions can be high. It is critical that you have a strategy to know what margins you are giving up per product sold. For some lower margin products you may lose money. Some merchants don’t mind losing money, i.e. a loss leader mentality, on certain products because they make up that loss on higher margin products.
Special Note: Marketplaces can require that you send your entire product catalog, in which case you must monitor your sales carefully as you will lose money on some sales while making great money on other sales.
- Technical Requirements to Setting Up Your Initial Product Feed
A. Because the marketplaces try to be as comprehensive as possible in their search features for customers, and because the point of sale is actually at their site, they require a lot of information. The good news is that you probably have all of this information required in your shopping cart technology. The bad news is that, unless you have a tool to help you, you will have to map all of their requirements manually and then update it as your shopping cart changes.
- Aid in Brand Equity is limited and no click through to your site (but for JellyFish.com):
A. Amazon Seller Central and Marketplace sell your products and do not show your company name. When you buy a TV, baby product, book, CD, garden tool or whatever, you only see the product and the manufacture name, maybe some reviews, and great navigational features on Amazon. They are the storefront and online mall all in one. They make the sale and are the brand name that people come to and you are the supplier (which the customer never sees). One small caviat: when you ship a product to a customer in that shipment there is always the opportunity to say where it came from…you! Amazon is introducing new features for 2008 that might allow for merchant branding but their traditional site does not.
B. UnderBid acts in a similar fashion to Amazon, BUT they do help with some branding for online merchants. The transaction takes place on Underbid and there is no redirect back to the online merchants, but the merchant’s logo shows up next to the product being sold as the merchant of note selling the product.
C. Shop.com takes Underbid one step further and not only lists the online merchant logo next to the product being sold, but also has a wonderful directory of all online merchants supported. Further, they allow the merchant of record to be you…not them.
D. JellyFish goes even further and provides an area for the online merchant to include a logo AND description of your company and product offered next to the item being marketed. With JellyFish, the consumer is actually sent to your site for the final purchase, and you pay the commission back to Jellyfish.
Recommendations to Working with Marketplaces:
- Understand that taxonomy issues related to setting up a feed to a marketplace are complicated. It takes focus and probably a week to set up your feed properly because the marketplaces’ feed requirements are stringent. Very few companies who offer feed management solutions will help you set up and manage your marketplace feeds because of these issues. MerchantAdvantage is an exception and helps you do it cost effectively and efficiently. Make sure that whomever you use to help you set up your marketplace feeds that you ask the "all in cost" to do it, if they even do it at all.
- Be very aware that sometimes the marketplace requires the online merchant to send their whole/entire/complete product catalog, pending what type of contract you sign. So, please ensure that you understand the margins related to each product your are selling and that while you may lose money on some products you will make good money on others.
- Never just feed once to a marketplace and let your feed sit. You should always manage your feeds to marketplaces and call your customer rep bi-weekly to ask for any advice on how you might be able to list your products, descriptions and special offers.
- Use a tool based product to help you "master" complex taxonomy issues related to marketplaces so you save time and headaches and can focus on marketing not technical feed specifications.
For a more comprehensive list of marketplaces, please see MerchantAdvantage.com
Affiliate Providers
Definition:
As they pertain to small to mid-sized online merchants selling products, Affiliate Providers aggregate thousands of online merchant product feeds and then provide these products to thousands of third parties who want to sell them. The Affiliate then "brokers" product feeds to these third parties and sends product feeds out (i.e. publishes) to online marketing channels, shopping destination sites and other third parties who desire to market online merchants’ products. Affiliates actually do a lot more than just this (and often make excellent consultants to help build sales, branding, and execute new online marketing strategies) but for the purpose of this newsletter we will just focus on helping online merchants get their products out to the marketplace.
MerchantAdvantage has relationships with all of the Affiliate sites and, while you can feed your product catalog directly to them, you can easily add this marketing channel feed to your "to do" list in our Channel Management product, if you want to supplement your other marketing feeds to ensure the broadest reach into marketing channels that you may not be able to manage on your own.
Mission to Working with Affiliate Providers:
Let's keep this simple. Here are three main reasons to work with Affiliate Providers:
- Reach
A. Many online merchants don’t have the time to manage data feeds to the various marketing channels on their own – affiliates do this for you.
B. Affiliate Providers work with small niche information based sites to every marketing channel and allow them to pick and choose from a portfolio of merchants which products to publish.
- Managed Marketing Campaigns
A. Affiliate providers manage, track, and share in payments for all purchases and are excellent in tracking fraudulent "clicks" and assisting in fiduciary transactions.
B. By joining an Affiliate group, online merchants have a web-based interface to access information, analyze results and manage their product data feeds for success.
- Revenues
A. You lose a small percentage of every sale to the Affiliate Provider and you also have to pay a commission to the marketing channel that publishes your product on their site to sell through their channel. But when managed correctly this can be a very effective marketing channel for reach, brand and revenues and you only pay commissions for products sold, not marketed. Not a bad deal!
Here are three main issues when working with Affiliate Providers:
- Lower Revenues Per Sale
A. You lose a percentage of every sale to the Affiliate Provider and you also have to pay a commission to the marketing channel that pulls your product to sell through their channel. So, make sure you manage your margins and use an analytic tool to manage all of your sales and return on investment ("ROI"), via marketing channels and Affiliate Providers.
- Review and Trust of Third Party Vendors Marketing Your Brand and Products
A. When you work through an Affiliate Provider they list your products for other third parties to market. These third parties are then reviewed by you, the online merchant, and you have to approve each potential third party, who will publish your products on their site. This can be tedious and time consuming.
B. In the end, once each third party is approved by the online merchant, there might be time saved as the online merchant does not have to manage each third party, but you now are beholden to that third party marketing you the way that you want, representing your products in a proper way, and being sensitive to how they are using your products for their own marketing efforts.
- Affiliates Are Your Friends and Competition
A. If you have no time, interest, or desire to manage marketing campaigns of your products with other third parties, as shopping destination sites, blogs, and with other interested parties – then Affiliate sites can be very helpful, even with the commission.
B. But, many times, it is better to have a direct relationship with a third party marketing your products to protect your brand, presentation of your company and products, and margins.
Recommendations to Working with Affiliate Providers:
- Make sure that you fully research and choose the right third parties to market your products. Affiliate providers might send you a list of over 50 companies interested in marketing your products and it is important that you like them and trust them.
- Be sure and create the appropriate and compelling banners and such to attract the right affiliate publishers.
- Provide promotional offers unique to affiliate publishers which they can offer to their viewers and could be consumers.
- Review all legal requirements from your minimum costs to the no-compete with the publishers, and be sure you're comfortable with them for the long term.
The three main Affiliate Providers are Commission Junction, LinkShare and Performics.
PART II of this Newsletter on Marketing Methods and Alternative Options for 2008 will be released after Thanksgiving to offer advice and tips with: Print Media, Blogs and Press Release; E-Mail Marketing; Search Engine Marketing; and other methods as Coupons and Sweepstakes.
MerchantAdvantage Wrap Up:
There are many ways to market online and wirelessly. No method is perfect and online merchants should manage each marketing campaign carefully, understanding how each campaign can, and should, tie into the other. This approach ensures that you are sending a consistent message to the marketplace and that any leads that come to your storefront from these efforts are managed properly, albeit that a special offer via a marketing channel is reflected back on your site when that potential customer comes to your site.
There are also limitations to what an online merchant can afford, and most online merchants don't have the money or internal resources to manage too many marketing initiatives effectively. So choose two or three, manage them efficiently and when you see that you have mastered them, then introduce another method and make sure it ties into your existing marketing efforts. |
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Think Outside the Box
by Brett Bernstein, Tech Support
 Miami, FL (October 29, 2007)— There are many ways to market your products on the web. It's only limited to your imagination and budget. And sometimes it's not a financial budget, but a time budget, i.e. time management. Successful marketing does not necessarily have to cost money, as long as you're creative.
I am reminded of a convention I attended in San Jose where, as I waited in baggage claim for my luggage, an ingenious marketing campaign caught my eye. I saw a partner site of ours who seemed to have spent a lot of money on airport banners and billboards; they were all over the place. Each corner I turned was another one of their posters. It really made it seem like they were a presence to be reckoned with. When I got to the convention, I spoke to a contact at the partner site, who was also aware (and happy) about the airport marketing presence. We spoke about how much that must have cost and how they got the connections to take over the airport. To my surprise, he smiled and laughed and said… one of the employees at his company had a buddy at the airport.
That buddy let him hang as many posters as they could get up in the wee hours of the night/morning before the conference. All for free. Amazing right? The moral of the story is, get creative, think out-of-the-box, and diversify your marketing efforts. If you sell iPods, make a music blog or post on a well known social site (free), with link-backs to your product page. Then for your accessories for the iPod, use affiliates. The point is to apply ideas based on your target market and products.
Diversifying efforts means applying multiple campaigns to different places based on the use and need of the product you are selling, i.e., different campaigns in different places. Don't be afraid to try new methods. |
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Merchant of the Month:
Kellyco Metal Detectors
 Three months ago Kellyco Metal Detectors (kellycodetectors.com) thought life was good. Having been in the business for over 50 years, Kellyco was the leading metal detector retailer in the world. Owner Stuart Auerbach began the company in 1953 after being trained by the United States Military to use metal detectors to find land mines. Fifty-four years later, and thanks to the Internet and eBay, Kellyco delivers metal detectors to anyone who aspires to be a treasure hunter in any corner of the world.
But that was three months ago. Today the 30,000 sq. ft. warehouse that is home to Kellyco is busier than ever. A new phone system was recently installed and new customer service representatives and sales staff have been hired to handle a 30% increase in sales. And the shipping department upholds their "Same Day Shipping" policy, but has jokingly asked the E-Commerce Department to let up just a little. This is almost exclusively due to Kellyco's new visibility on search engines and shopping comparison websites, accessible via Merchant Advantage's Channel Management program.
Today any search for metal detectors yields a link to Kellyco's main site, or at the very least, a multitude of Kellyco's products. Every site, from Shopzilla.com to PriceGrabber.com, links to Kellyco. Kellyco is even organically ranked 1st on Yahoo! for any search of the words "metal detector." Thanks to Merchant Advantage's Channel Management, Kellyco went from being accessible only on eBay to being key players on Become.com, Froogle.com, Pricefish.com, Pronto.com, Shopping.com, Smarter.com and Amazon.com.
Three months ago Kellyco Metal Detectors thought life was good. Today Kellyco thinks life is great and it just keeps getting better and better. With Merchant Advantage, Kellyco has detected a winning combination.
Dan , Kellyco Metal Detectors
Get Your Channel Management Fee Waived Plus Receive a Complimentary Companion Airline Ticket!
We're thrilled and inspired by all the Channel Management success stories you share with us. Now we want to turn the spotlight on you! Send us your best Channel Management success story and you could be selected as our Merchant of the Month.
If chosen, your company will be exclusively showcased in an edition of our monthly newsletter, eTail dTail.
Best of all, your monthly MerchantAdvantage fee will be waived in the month you are selected and you will receive a complimentary Companion Airline Ticket. Submit your Channel Management success story today to stories@merchantadvantage.com. We look forward to hearing from you!
(Note: MerchantAdvantage reserves the right to use any or all of your story, whether or not your article is selected as the winning entry.) |
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About MerchantAdvantage
MerchantAdvantage (www.MerchantaAdvantage.com) is an ecommerce software solutions company committed to championing and helping the small to midsized online ecommerce Merchant address complicated mobile and online e-commerce issues and take a systematic, controlled and proactive approach to online product marketing. MerchantAdvantage provides long-term, cost effective software tools that enable an online business to grow by reaching the widest audience possible via online, broadband, and wireless devices. MerchantAdvantage's applications are designed to thoroughly connect the online retailer to their marketplace partners in a seamless motion of communication allowing Merchants to take control of their ecommerce channels, marketing strategies, and IT solutions. These software tools specifically help ecommerce retailers bridge the gap created by non-standardized data feeds to various online market places, shopping comparison sites, and other online shopping destination sites.
MerchantAdvantage is changing the macrocosm of ecommerce by staying ahead of the curve in providing business solutions to the growing online retail marketplace: We're here because America's commerce future is online.
MerchantAdvantage, the premier software for on-line retailers looking for an efficient and cost-effective method to online product marketing introduces Channel Management with Chanalytics(sm) Professional and Lite. Channel Management products help online retailers save time and money while maximizing their return on investment and marketing budgets by allowing them to easily connect to shopping comparison sites an assess their performance. MerchantAdvantage is for online retailers wishing to better manage online marketing efforts and increase sales volume.
MerchantAdvantage – Take Control of Your Marketing Channels! |
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Is your current site search doing a good job of helping your site visitors find the products they're looking for? If you're not sure, or if you think your site search could be improved, SLI Systems, a MerchantAdvantage Partner, has just what you need. SLI Systems provides a hosted site search solution that drives more traffic to your site and delivers more relevant results once they get there - helping you to gain new customers and increase sales. For more information, or to contact SLI Systems for a free, 30-day trial, visit www.sli-systems.com, or email sales@sli-systems.com.
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Do you have any issues, concerns or interests you would like to share?
Email us at:
tip@etaildtail.com
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• MerchantAdvantage Supports SKU Level Bidding at Shopping Comparison Sites
Small to mid-sized Businesses Can Now Manage Their SKU Level Bidding at All Supporting Shopping Comparison Sites Including NexTag.com, Pronto.com, Shopping.com, Shopzilla.com, and Smarter.com
Miami, FL (November 14, 2007) - MerchantAdvantage has supported SKU level bidding for NexTag(TM) and Shopzilla(TM) since 2005, through close business partner relationships and its Channel Management with Chanalytics Professional and web-based Lite products. MerchantAdvantage now is honored to support Pronto.com(TM), an Operating Business of IAC/InterActiveCorp (NASDAQ: IACI), and the Shopping.com® beta program for select merchants; and Smarter.com(TM), a MeziMedia company owned by Value Click (NASDAQ: VCLK).
As reported in Internet Retailer Magazine, November 2007, cover story SKU level bidding and analytics are essential to successful data feed management. "Intelligent SKU bid management strategies can increase ROI sometimes five fold," said Chip Arndt, co-founder of MerchantAdvantage. "Our clients manage dozens of unique feeds according to category and individual SKU performance and increase ROI on the sales side of transactions. Now our merchants can work upstream to better manage their SKU level bidding when listing their product categories and individual SKUs, where supported, directly with shopping destination sites."
Chief Revenue Officer at Pronto.com, Greg Stevens stated: "SKU-level bidding on Pronto.com, through Merchant Advantage's tools, gives our clients the ability to manage the profit-margin of their campaigns at the product level."
MerchantAdvantage remains the only tool-based, cost-effective, data feed management solution in the marketplace that integrates the above features into its web-based product offerings and also allows clients to: feed to over 100 shopping destination sites and marketplaces, including Amazon.com and Shop.com and mobile commerce sites as mPoria and MShopper; support multiple storefronts for the same flat fee; and set up, analyze, and manage all of their marketing data feeds and SKU level bidding in one place. MerchantAdvantage provides free for its clients exclusive webinars; monthly newsletters and technical advice; has 24/7 trouble ticket support; and does not charge revenue fees, transaction fees, SKU listing fees, or set up costs.
• Online Holiday Sales To Reach $39 Billion
by webpronews.com
U.S. online holiday retail sales will reach over $39 billion in 2007, an increase of 20 percent over last year's holiday season, according to a JupiterResearch report "U.S. Online Retail Holiday Forecast, 2007."
A record 126 million users, a 6 percent increase over last year, will make online purchases this holiday season. Retailers will increase their efforts to grab customers attention using a number of tactics with an emphasis on search marketing.
"Over half of online retailers say they will increase efforts with search engines, despite rising costs and some reports of declining ROI. Shoppers can also expect to take advantage of more free shipping offers this year," said Patti Freeman Evans, JupiterResearch Senior Analyst and lead author of the report.
"This enticement will also translate to online retailers with brick-and-mortar stores who will likely to beef up their use of percent-off discounts."
Heavy use of percent-off discounts is expected from computer and consumer electronic sellers. The report points out that only using percent off discounts may not be enough to drive consumer traffic, specifically among those that do not usually shop online during the rest of the year.
"Online retailers have an opportunity to gain market this year because of the resilience of online shoppers, in spite of a relatively soft off-line holiday season," said David Schatsky, President of JupiterResearch. "Aggressive use of cross channel messaging and promotions will be key to capturing undecided customers."
• Online Jewelry Sales Up 19% in October
by idexonline.com
Jewelry and watches sales by U.S. e-commerce sites rose 19 percent in October compared to the year before, remaining one of the hottest online retail categories. This growth outpaced total online retail sales, which grew 14 percent to $16.476 billion.
According to comScore, non-travel U.S. e-commerce spending figures for October 2007 show that retail e-commerce increased 19 percent versus year ago to nearly $10 billion.
The October growth rate marked a slight decline from the growth rates observed earlier in the year, comScore noted. In particular, retail e-commerce sales year-to-date through September grew at approximately 21 percent, meaning that the 19-percent growth in October represented a slightly softer-than-average month.
Online spending on jewelry and watches rose 21 percent in the third quarter.
The video games, consoles & accessories category posted the strongest gains, jumping 264 percent, driven by strong sales of Nintendo Wii and Sony PlayStation consoles and accessories. Furniture, appliances & equipment also experienced a strong month, growing 105 percent, followed by computer software (up 76 percent) and event tickets (up 43 percent).
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"Technology should exist to aid us in our endeavors; We are here because you are online.sm"
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Michael Lambert, CEO |
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For information on how MerchantAdvantage may help your business grow, please contact us:
Chip Arndt
Executive Vice President
Business Development and Strategy
305.895.9466 x113
partnerships@merchantadvantage.com
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