3 Must Haves For Online Stores
After successfully working through the setup of a couple e-stores, I would like to share our top criteria for finding the best manufacturers to work with. There are an overwhelming number of manufacturers that will work with companies that are starting an e-store. During the setup of our first store, I stumbled my way through finding the information I needed to know from the manufacturers. Below is a list of the top three criteria that you should look for when adding a new manufacturer to your e-store.
1) MAP (Minimum Advertising Policy)
- Finding a manufacturer that offers a MAP is going to be key for a new etailer. Some manufacturers will require that you do not list the sale price of their products below a MAP. The manufacturer will list out what their MAP is for each product. Most manufacturers will require an etailer to sign a MAP agreement, that will simply state that you will not advertise their products below the MAP price.
- This is a great help for new etailers that are just starting to sell new products. It provides a fairly level playing field to everyone who is offering these products online.
- If a MAP is not provided by the Manufacturer, the larger companies can (and will) list the product at their lowest price. These larger companies order products in the highest volume, creating a very low cost of good, and ultimately offering a lower price to the consumer. New etailers in the market will never be able to compete with a larger company who orders product in high volume. I found that some companies were able to sell their products to customers at a lower price than we were purchasing from the manufacturer.
- Having a MAP is only as good as the manufacturer enforcing it. We encountered a manufacturer who offered a MAP, but was trying to gain control over how to enforce their MAP. A small price war broke out between a few e-stores, who were under cutting the discount amount by lowering their prices on a daily basis. Taking the time to change pricing on a daily basis can be a huge time consumer. Not to mention, customers were confused by the ever changing price.
- It is important to ask the manufacturer if they have one or two MAPs. One would be for products offered with free shipping and another would be for items that have a shipping charge. This could make a big difference in how you set up your products from this manufacturer.
2) Images
- Ask the manufacturer if they have High Resolution images of their products. Great images will definitely help you sell your products. The more product images you have on your site, the better. Provide an image of each color, size or with available options of the product.
3) Internet-Friendly
- Every time I mention this to people they, and I, laugh a little. Saying “Internet Friendly” is really my way of saying, “do you they want to work with you?” I have found that a few manufacturers are still in the school of thought that e-stores are not real stores and can ‘burn’ them at a moment’s notice. They may have had a bad experience, or do not wish to provide drop shipping to etailers. For the most part, if you do not have a good feeling about your initial conversations with a manufacturer, they will probably be difficult to deal with in the future.
- Try to work with manufacturers who realize your value as an etailer and want you to succeed.
If you can find a manufacturer that meets the above listed criteria, you will most likely have a very successful relationship. Having a great relationship with the manufacturer will help you provide better customer service, sell more products and ultimately maintain a profitable e-store.
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I respectfully disagree with the statement about MAP. MAP is the bane of my retailing existence. Big companies like Amazon and Best Buy can ignore it because they know there will be no repercussions, while smaller etailers like myself are forced to sell a product for more. It is a totally unfair system. If it was enforced on the big box stores, it would be a great common denominator, though.
We have found that if a MAP is not enforced by a manufacturer, that our profit margins are so small, it is almost impossible to survive. It is very difficult to compete with the Wal-Marts of the world on price, when they are purchasing products at the lowest possible price point. Manufacturer’s who provide MAP and enforce it correctly are offering a more level playing field to everyone. MAP is just the advertising price, and not the sale price. At the end of the day, you can sell the product for what you would like.
In regards to large companies not having to obey the MAP. We have witnessed a Manufacturer take on a very large retail (Target), and it took awhile, but the manufacturer came out on top. The large retailer is now obeying the MAP. We do a lot of policing ourselves and will email the manufacturer when we notice other companies not obeying the MAP. I would suggest that everyone policy their competition.
If MAP is not enforced..then you don't really have a MAP then do you?
Great post. As someone who works within an online retailer we come across the same issues. MAP is great and often the best way forwards… dont be afraid to out your competitors to the manufacturers who are selling cheaper than you.
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