MAKE YOUR SITE SELL WITH REAL BARGAINS
By Patrick Tan

Everyone loves bargains. Shoppers will flock to your site if you can
offer quality branded goods at deep discounts. Not only that, these
shoppers would be more than eager to share their best buys with
friends, colleagues and relatives. They may even volunteer to buy on
behalf of those who do not have access to the Internet.

Studies have shown that online shoppers are more price-sensitive.
A look at the financial statements of listed online retailers revealed an
unhealthy trend - cost of sales is much higher than revenue. In other
words, most online retailers are resorting to cut throat pricing to
increase sales.

While analysts pointed their fingers at new competitive pressures
presented by companies that help buyers compare prices online, I
believe consumers are simply not motivated enough to make more
purchases online if stores do not offer their products at below regular
retail prices. In the impersonal environment of an electronic store,
consumers' inherent desires to seek out good bargains become a
dominant factor in deciding what and where to buy online.

How could you sell quality branded goods at 50% off without losing
money? Quite simply by securing alternative sources of products.
Many manufacturers and wholesalers are flooded with overstocked
and surplus goods in their warehouses. They must liquidate millions
of dollars worth of top quality merchandise at "distressed" prices
every month to make room for new products.

Merchandise can become "distressed" for several reasons:
+ Overstocked goods are sold as closeouts.
+ New models make previous models obsolete.
+ A product line is discontinued.
+ Changes made to the product's color or label.
+ A large contract order is cancelled.
+ A manufacturer is forced to close and must liquidate its goods.
+ A manufacturer is forced to liquidate its goods to generate
operating capital quickly.
+ A manufacturer has limited warehousing space and must move
its inventory to make room for new merchandise.
+ Refurbished products that are as good as new.
+ Product over-runs.

Whatever the reasons, "distressed" goods are still quality products
and they carry the full manufacturer's warranties just like the regular
goods.

Most of these "distressed" products are bought by wholesale clubs
and online discount stores at prices way below manufacturing costs.
Although these products are resold at discounted prices, the profit
margins would still be fairly comfortable to turn in good profits with a
high sales turnover. Online discount stores that adopt this business
model includes NASDAQ-listed FragranceNet, DesignerOutlet.com,
OutletMall.com, 1bookstreet.com and GotItDirect.com.

You do not have to operate in the same scale as these online
discount stores. Neither do you have the warehousing facilities and
resources to compete with these established discount stores. Acting
as an affiliate of these discount stores will not work either, as
shoppers would have gone to the online stores directly on subsequent
visits.

The objective of offering bargains to your target audience is to entice
them to visit your site as often as possible. Its acceptance will open
up many other opportunities to sell your key products and services. A
viable approach for small businesses is outlined below.

Adopt a highly selective product strategy.
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Keep your business simple by staying focus on one product or a
narrow range of products that are complementary to what you are
offering at your site. Treat the business as a form of providing
value-added service to attract and retain visitors to your site.

By focusing on a single supplier, you will have more time to attend
to enquiry, process orders, and arrange for delivery of goods to
consumers. Your supplier will also recognize your commitment to
his company and products by giving you a better deal and more
co-operations than he would give to someone who represents many
suppliers.

Get your supplier to ship the products directly to consumers.
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Operate your business without holding on to any inventory. You can
get your supplier to ship directly to your customers after you have
secured and received payments (ideally) for the orders. There are
many suppliers out there who are willing to drop-ship your orders
anywhere around the world. You can find them at the following sites:

Wholesale Central - http://www.wholesalecentral.com
Closeout Central - http://www.closeoutcentral.com
Surplus-Closeout Finder - http://www.infomart.net/surplus/

Setting up a cost-effective shopping and billing system.
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Well, in order to sell products online, you must operate a shopping
cart. It is an electronic platform, which allow users to browse through
products; place selected products into a shopping cart; and make
payments online through a secured server.

As a small business owner, you should outsource this aspect of the
operations to a third-party billing company to keep operating costs
to a minimum. My preferred choice for this job is Verza. Besides
offering one of the most competitive rates in the third-party billing
industry, it also provides a wide range of services that will make your
job easier.

+ You can use to sell single items or multiple products.
+ Accept checks and major credit cards online.
+ Free setup. System will be operational within 24 hours after
submitting your application.
+ Anti-fraud screening provided free of charge.
+ Free tools provided to help you build your own online store.
+ Reseller program supported. Verza will track and process
payment of commissions to your affiliates directly.
+ Payments made twice a month directly to your bank account.

Get more information at http://aloha-city.com/bizlink/verza.html

Your small discount outlet is now ready. There is no need to incur any
fixed charges in inventory, shopping cart, secured server and merchant
account. Let Verza and your supplier take care of the operations while
you focus your efforts on marketing, promotion and affiliate recruitment.

If done properly, you can expect shoppers to flock to your site regularly
in search of the best bargains, provided your target audience is
interested in the specific products that you are offering on sales.

You can afford to price them lower than other established discount
stores as your cost of operations is relatively lower. It has the potential
to become a major money-spinner besides fulfilling its role to open up
other lucrative business opportunities. Try it! You have nothing much
to lose, but plenty to gain with this business venture.

About the Author

Patrick Tan, an entrepreneur and former journalist, offers a complete
range of e-commerce solutions, consulting services and free resources
to help you build a successful career online. Visit http://aloha-city.com
for more information. He publishes a free newsletter to share his
experience and business know-how - mailto:basics@aloha-city.com

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