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Tuesday, November 13, 2007

Are Products Only Sold on Price in the Online Shopping World?
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In the online world you cannot have good music, nice decorations and so on... In reality in the online shopping world you must sell the products just based on price.
-April Z.
Note: Question edited for readability


I would disagree a bit with April. Although there are a lot of websites that compete strictly on price, there are a number that do not, and as a result are a better off. I think Amazon (http://amazon.com/) is a good example. Through strong and persistent marketing and as a result, public awareness, many people purchasing books online go to Amazon.

Many people buy from Amazon, because of its reputation, because others they know have ordered from them. Amazon may not be the least expensive, but the peace of mind that is had from ordering from a known entity leads to a better experience than ordering from “supercheapbooks.com” and wondering if and when you will receive your books and whether or not you will have to hassle with an off-shore customer-service representative that does not speak English, that is if you can get a hold of anyone at all. So to state the obvious, a good reputation is worth paying extra for many customers.

There are some sites, Walmart being one, where for a fee you can upload a picture or image to be printed onto a gift card (http://photos.walmart.com/storepage/storePageId=View+All+Products), which can then be mailed to your home, business or the gift recipients address. This is a case where the denomination of the gift card + the printing fee is more than the lowest cost provider of a non-customized gift card, however it is a unique customization service that is still relatively rare and desired by some, allowing for additional profits. Unique and differentiated service is worth paying extra for many customers.

One of the advantages of an eCommerce site associated with a brick and mortar retailer is that in some instances you can buy online, and if it does not fit, look right, wasn't what you expected, you have the option to return it to the brick and mortar retailer instead of packaging it up and going to the post office to return the item. This is another instance where customers might not focus on price, but on convenience. Convenience is worth a couple extra bucks for many customers.

So to address April’s comment above, in the online shopping world, as in the “real” world, goods and services are NOT sold strictly on price. Reasons that customers may pay a bit more for your products or services include your good reputation, unique and differentiated products and services, and convenience.

Just realize, there always will be customers that aim for the lowest price. However there will also be customers that go for attributes that are over and above the price as well.

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