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E-Commerce Tutorial     Lesson 2               Page 2                           by Kevin Hakman

— What Are You Selling?


    There are many different ways to sell your product on the Web, but most techniques tend to fall into one of the following categories:

Gifts and Impulse Products
    Sometimes you don't know what you want until you see it. Merchants who offer gift items are very familiar with this. If you're offering impulse buys, you may want to design a site that's easy and entertaining to explore; let them go Windows shopping. RedEnvelope makes its site as fun to explore as it is to shop, creating impulses and ideas that drive sales.

Commodity Products
    Everyone knows what a CD or a book looks like. They are pretty low-risk purchases since you don't have to worry about whether they're the right color or compatible with your system. What matters is that the seller has them in stock at a good price. Merchants who offer commodity-type products are differentiated by their products' price, selection, and availability. CDNow and Amazon are working hard to be the killers in this arena. But because competing on price alone would make their gross profits approach zero, these companies are focusing on adding value through personalized customer service and convenience. For example, music retailers have learned that many of their customers want to find albums based upon a half-remembered lyric. "You know ... the song that goes 'La la la la'? I want that one." So in response, they extended their search capabilities to include song lyrics. Now that's convenience! The better you can cater to your customers, the more business they're likely to do with you.

Considered Purchase Products
    Some products require a lot of deliberation before a purchase is made. Expensive items that come in various models, each with different options and different pricing, require customers to consider a number of factors before they buy. We're talking about consumer electronics, cars, cellular phone service programs, and something you should be thinking about in the near future: e-commerce software packages. There are now a number of middleman services popping up to help consumers make their buying decisions. Sites such as mySimon offer side-by-side comparisons of different products.

Configurable Products
    Sometimes a product is all about the options it comes with. A case in point is computer workstations and servers. The basic components are the same, but you can choose how roomy or fast each of those parts will be. Computer manufacturers like Dell and Apple enable their customers to design their own products, blending one-on-one marketing with customizing mass-market products: Their motto is, "Tell us what you want and we'll build it for you."

    But these techniques are now showing up in other fields. Take a look at Smith + Noble, where you can design your own window treatments by selecting and combining different attributes and features.

Categorized and Indexed Catalogs
    OK, I'll admit it. As much as I harp on the problems with the category/subcategory/sub-subcategory thing, sometimes that method of organization is convenient, especially when shopping for supplies. Office Depot's site does a good job of organizing things so you can get in and out quickly. Grainger, the industrial supply catalog, has thousands and thousands of items. For a company like that, categorization is a must.

    You need to figure out what's right for your company and your products; not necessarily what's easiest to build. To be competitive, you need to understand how your customers want to work with you, what levels of convenience they desire, and what features they will value in your online store.

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