Visiting a Supplier

I had a very unique opportunity a few months ago.  My sister was getting married out of state and we were traveling for the event.  As brother-of-the-bride, I really didn’t have much to do until the real events started, but we were there a day early as my wife was involved also.

So with nothing to do for virtually an entire day, I whipped out the map and realized that one of my drop ship suppliers was headquartered only about 40 minutes drive away.  ROAD TRIP!

So why did I do this? Actually, it’s very common for a retail buyer to visit a supplier.  But, if is fairly UNCOMMON for a drop shop seller to visit a vendor.  This is because we typically don’t have travel budgets, and since most of us are part-timers, we’ve got other things to do.  But, when the opportunity arises, I highly recommend it.  While the details of my visit would be long and boring, there are reasons and lessons to be learned by a supplier visit.

1.  I saw the products. Do you have any idea how many items I’ve sold from this manufacturer and never saw a piece in person?  I’ve now held them in my hand.  I know what they look like, i know the quality, and I can now answer questions about the products without having to contact the company.

2.  I got a nice tour of the facility and saw the orders being processed.  Believe it or not, having a good understanding of how your suppliers work can greatly improve the customer service you can offer to your customers.

3.  I met with my main contact, and the big wigs. These folks deal with their products every day, they know how to sell them, and know what works and what doesn’t.  Hearing their sales strategies, and constructive advice was invaluable.

Now, I’m not suggesting you run out and visit all your vendors.  It simply doesn’t make sense, unless they happen to be really close by, or you’re really well funded.  But if the opportunity arises, as it did for me, go for it.  The experience can be invaluable.

Chargebacks Are Not Fun

As if I had to state this, right?  For any newbies out there, a chargeback is when a customer disputes a charge with their credit card company and you, as a merchant, have to respond in writing your side of the story.  Disputes can arise for any number of reasons.  Things like proof of delivery, quality complaints, the product not being as expected all can result in customer dissatisfaction.  Ideally, the customer contacts you and gives you the opportunity to fix the issue, but sometimes they go straight to the credit card company and you’ve got a problem.

In my case, the customer did contact us.  We did everything we could to resolve the situation (in fact, we went above and beyond our policies to try to make things right) but the customer still wasn’t happy, so he got the credit card companies involved.

I truly feel bad about the whole situation, however I have put up a fight because I know that we are not wrong.  At this point, both the customer and I have written two letters explaining our sides, and I guess it’s up to the credit card companies to decide who wins.

I’ve felt sick to my stomach this whole time.  No matter what, I’ve lost a customer and maybe lost some money to boot.  This whole situation has really got me thinking about return policies.  Now just for reference, this was an order for personalized goods.  And the customer knew that they couldn’t be returned because they were customized to his specifications.

In his book, “The 4-Hour Workweek “, Timothy Ferriss writes that a store should offer a 100% return policy (plus return shipping!)  no matter what, and you will prosper in the end.

But, when you sell some goods that are personalized (and therefore not resell-able), how can this be done?  I’m just not sure.

I’d love to hear from some readers.  What are your thoughts on this?  What is your return policy?

New Services From Solid Cactus

You wouldn’t know it from reading me, but there are multiple platforms in which to open your online store.  I’ve never been afraid to mention that I use Solid Cactus for much of my design, call center services, and more.

Well, until now, Solid Cactus has focused on Yahoo store design, but have recently expanded.  Now you can take advantage of their extensive experience in store design to build or improve your eBay Pro Store, Amazon Webstore, or Yahoo store.

I personally have used so many services from Solid Cactus, I can’t count.  So I can tell you from experience, if you need any help with building or improving your store, marketing, customer service, and more, I know you’ll be pleased by checking out Solid Cactus.  Give them a call and see what they can do for you at 1-866-943-7513.

Drop Shipping and The Paper Catalog

I get requests from people every single day to mail them a catalog. And yes, I mean every day. So, if you had to guess, what do you think I do with them? No, nothing grand, I just file them on my computer for a time when I might have a catalog ready. Whenever that may be.

People automatically assume that just because you have an online store, you surely have a catalog. The reality of the day is that a catalog is extremely expensive to produce. Graphic design, original photography and content, and printing is just the beginning. Add on postage and obtaining a decent mailing list and you’ll be amazed at what producing a paper catalog can cost. Plus with an extremely low return rate, you have to mail out tons and tons of catalogs to make it feasible.

While I’m no expert, I’ve heard it said that your store really needs revenues of $1 million before considering producing your own catalog.

However, admittedly, I am missing an opportunity. How can I be taking advantage of these requests?

1. At the very least I should be responding to these emails, thanking them for their interest, and telling them that we only have a website at the moment, but will keep their request on file. But I don’t.

2. I should be adding them to my email marketing list. They have, afterall, requested information from my company. I have, however, failed to do this.

3. I could be sending each of them a coupon or special offer. “Sorry for not being able to fill your request for a paper catalog. Please accept this $5 coupon good on any purchase along with our apologies.” I could mail or email this. But alas, I haven’t done either.

So obviously I have some work to do. But the lesson to be learned here is not to overlook the easy opportunities provide great service and maybe gain some customers in the process.

Does anyone else have different ideas of how to handle this?

Things To Look For When Hiring A Call Center

So you are going to make the move and upgrade your store’s customer service by hiring a call center?  Before you pull the trigger, here are some things to consider.

1. Do you really need one? This is a major commitment.  My guess is that there will be at least a 6 month contract.   There will be training, setting up a toll free number, and more.  Be sure that the volume of your store can support such an agreement.  For me, I made the decision when I was getting more calls and emails than I could respond to, and I felt I was losing more than I wanted, and hiring my call center was worth it to capitalize on the orders I felt I was losing.

2.  Training/Call Monitoring/Coaching – Any decent call center, large or small, should have programs in place to initially and constantly update their training of their associates.  They should be trained in telephone customer service in general, problem solving, and training on the individual stores themselves.  Additionally, they should have call center managers who monitor calls to be sure quality standards are met.  When they are not, they should have a coaching program to help the rep in question improve their performance.  Don’t be afraid to ask these questions to find out exactly how they train their reps.

3. Knowledge of Software System – This is important, but not as much as you might think.  There are tons of different kinds of store systems out there, and the back end software is different on all of them.  On one hand, it is important that the reps know how to use the software in question.  On the other hand the individual reps themselves may never need to even see your back end software.  Many call centers simply pull up your website, take the order from the customer on the phone, and key it into your site just as they were the customer.

4. Reporting – The call center should provide you with monthly reporting to reflect the reporting on your account.  The reports should be able to show how many calls came in and went out, the time and length of the calls, and the outcome.  This reporting will help show you how beneficial the call center is being for you.  If the report show a large number of calls ending in orders, the call center is probably doing you a great service.  If a majority of them are ending in just questions or tracking inquiries, you might want to look at your site to see how you can improve it to cut down on these calls.

5. Dedicated Person with the Ability to Take Assignments – Of utmost importance, in my opinion, is to have a point person for your account.  One main contact that you can direct any questions, issues, or concerns to.  If you find that the customer service reps are giving out some incorrect information, or any other mistakes are being made, this is the person that you will go to to make sure that the issue gets resolved.  This should also be a person who you can give some directions to (”I need customer #1234 called, their item is on back order.  Please find out if they can wait”).  Note that this person may or may not be the actual one to make the calls, but they should be the one to coordinate the effort and report back to you.

6.  Administration – In many cases, you can upgrade your call center agreement to include administrative responsibilities.  This is where you can really begin to save your time and effort by having a person that does a lot of your back end work for you.  In my case, it’s Lori.  Lori checks all my orders, posts all my tracking numbers, follows up with suppliers if orders don’t ship on time.  She fixes billing issues, calls customers when a mistake is made, and she handles the problem customers that ask to speak to a manager.  If I have any problems or needs, whatsoever, Lori is who I turn to.  She checks and take care of my email and forwards to me what is important.  I have given Lori permission to make most decisions herself, but calls me when something comes up that needs my attention.  When I go on vacation, Lori handles everything.

I absolutely don’t know what I’d do without my call center.  In a business that I work part-time (and obviously have a full-time career to tend to), it is reassuring to know that I have people there to mind the store.

Because I know you are dying to know, I proudly use Call Center Services from Solid Cactus.

Hiring A Call Center

In my previous post about customer service, I mentioned a call center as an effective means of customer service.  Most people think of a great big company when you mention a call center.  But believe it or not, there are call centers out there that don’t sell anything of their own.  They simply provide customer service for other companies.  It’s actually pretty common.  In fact, more companies use a third party call center than you’d think.  If they do their job, the customer shouldn’t know the difference between the company, and the call center.

So, what are the pros and cons of using a call center for your drop ship business?

PROS:

1. Availability – The hardest part about selling products is the need to be available when your customers are ready to buy.  This is why the internet is so great; your store is always open.   But what about those folks that want to call in.  They still don’t trust their credit card on the internet, or whatever.  A call center is there to answer the phone whether you are around or not.  They can take orders, answer product questions, give out tracking information, and more.  Typically, there will be a team of customer service reps that take calls for a number or stores.   This keeps the rates reasonable, by allowing reps to work for a number of stores at the same time.  You can, in some cases, have dedicated people, but my guess is that most drops shippers don’t really need that, unless you get really big.

2. Professionalism – Ever call to make a tee time at a golf course and get some old guy barking at you over the phone about the dress code?  Yeah, he doesn’t care of you show up or not. On the other hand, the representatives at a call center are typically trained in both customer service, and on the individual stores they are covering.  Plus they are trained in handling those problem, or upset customers.

3. No Need To Actually Hire People – Tell you what, it is expensive to hire people; and the hourly wage is just the beginning.  Using a call center allows you to have people who are paid and managed by someone else.  A beautiful thing.

CONS

1. Price – Obviously, this kind of work doesn’t come for free. While I’m sure that there are as many plans out there as there are call centers, you will need to carefully consider the fee structure to make sure it’s something you can live with.  In my case, I pay per minute that a rep is physically on the phone.  Considering most calls only last 2-3 minutes, and my average order size is around $80, I feel that I make out pretty well.  However, there will always be that customer that keeps a rep talking for 20 minutes and then not make a purchase.

2. Product Knowledge – You know your product best, and no one will ever be able to replicate that.  Consider your product line before hiring a call center.  If what you sell is complex or complicated, be sure that the call center reps can handle the possible questions.  I once had a guy that contacted me for advise on hiring a call center who sold airplane parts.  I don’t know what he ever did, but I hope he was very careful of his decision.  One thing that can be done to help in this situation is to be sure that you have very through and detailed product information on your site, which might cut down on the need of the reps to answer too many questions.

3. Loss of Some Control - Mistakes will be made.  You are going to have to be flexible.  By hiring a call center you are giving other people some control over your store and orders.  They will be forced to make some decisions on the fly, and they will make some mistakes that will cost you orders.  You simply need to decide in advance what decisions can be made without you, and what amount of honest mistakes are acceptable.  Remember there is a big pay off.  This loss of some control and some mistakes is easily offset by the amount of time you gain, and the improvement of service that you provide.

Next up, what to look for when hiring a call center.

By the way,  I proudly use Call Center Services from Solid Cactus.

Customer Service Is Never Part-Time

I often stress the need to provide the best customer service you can as a drop ship retailer.  As a drop shipper you are already behind the eight ball; you pay a little more for your products, you have extra fees, and you probably don’t have a big pile of money supporting your venture.  It’s hard to beat the big guys when it comes to these issues.  However, customer service is one place you can shine.  Most consumers recognize and search out good service, and many will pay slightly more to get it.

So this begs the question:  How do you give great customer service when you are starting out, and working part-time?  Believe it or not, there are many things you can do.

1. Site Design.  Great customer service starts with site design.  Most consumers will click around your site to find the answers to their questions before taking the time to contact you.  Take the time to give good and complete product descriptions to your items.  Make sure you have a detailed FAQ page and check it often.  If you are getting a lot of the same questions, maybe you need to add to it.  Be sure to clearly state shipping charges and return policy.  Finally, make sure all of this information is easy to find.  The more information you provide right on the site, the more likley your customer will answer their question all by themselves.

2.  Email.  The first level of customer service we all started with is a customer service email address.  Create a generic address for all customer service inquiries (service@mystore.com).  Be sure to clearly state when a customer can expect an answer and STICK TO IT.  This is also a great place to use an auto-response (Thank you for your email.  Our customer service team will review and respond within two business days).  People get fed up with customer service really quickly when claims and deadlines are not met.  If you say you will respond within one business day, then you better make every possible effort to do so.

3.  Phone.  Be it a toll free number or not, a phone number is a big and scary step for the drop ship retailer.  New retailers worry about being stuck on the phone all the time, or even worse, not being there when the phone rings.  They worry about being tied to the office when they don’t have the time to be, they are only working part-time, afterall.  These worries are not necessary, however.  Just make it clear on your site that the line is not manned, but they are free to leave a voicemail.  Then revert to the standard response time.  One word of caution, get a separate and dedicated line for the business, and make sure everyone in your house knows which line it is.  There is nothing worse than a customer calling and having your young kid answer!

4.  Call Center.  Eventually your call and sales volume will grow to a point that you really want to have someone answering the phone.  My advise is to find and hire a third-party call center.  Yes you can have professional customer service reps answering your customer’s questions and placing orders without hiring a single person.  I use Call Center Services from Solid Cactus. More about call centers coming soon.

5.  Tracking.  One of the easiest and most important  things you can do is provide tracking information.  The most popular call that customer service reps get is the classic “where’s my stuff” call.  Have your system send out emails that tell the customer their order has shipped and provide the tracking number.  Not only is this great service, but it lets the customer stop bothering you and start checking the UPS website to see where their box is.

Like any other part of the drop ship retail business, the key to customer service is information.  Give them information before they ask it, and let them know how to get help if they need it.  These simple steps will add to your business’ credibility.

Dad’s Advice

So I’m back after quit awhile.  Something happened to me that most new entrepreneurs will experience sooner or later.  It’s not fun to re-live, but let me give you the highlights.

As we’ve talked about many times before, drop shipping is so great because you can start part-time and see how things go before taking the big plunge into totally working for yourself.  Of course, I’ve always meant that you give your employer the time and attention required, then do your drop ship business in your free time (nights, weekends, etc.).  Which, of course, is what I’ve always done.

So, my employer “found out” about my part time endeavors.  I do say “found out” because honestly, I didn’t tell them.  I felt it was wrong to use my job to promote my part-time stores.  So literally not one co-worker or customer of mine even new I had my drop ship stores or blogs.  I felt, even to this day, that this was the epitome of integrity.  Had I been talking about my stores to anyone and everyone, THAT would have been a conflict of interest, something that I worked so hard to avoid.

So I got pulled into big meetings with important people and proceeded to spill my guts.  I told them the time I spend, what work is required, whether or not I was using company resources.  I was honest with everything.  Their main concern was that my endeavors looked like large operations that took up a great deal of my time.  (incidentally: what a complement.  Little old me, working evenings and weekends had accomplished what every small entrepreneur hopes to; looking big, even though I am not).

So legal got involved (this is a fortune 500 after all) and it was determined that I had not violated any company policies or conduct codes.  I was, however, asked to stop writing Drop Ship Digest while under their employ as it posed a “certain concern”.  I complied, even took the blog down for quite awhile until I left that company.  I stayed with the company awhile longer, but then left after finding something better.  It’s been eight months since I left that company by my own will, and I’m finally ready to start writing on this blog again.

For those of you that have read me in the past, you know that I have much more integrity than to disclose what company that was, or any real details, so please don’t ask.  I’m just happy to be moving forward.

So how does dad’s advice fit into all of this?  When I was at my lowest point of depression and stress, my father said something to me that I will never forget.  And it’s a good lesson for all of us.  He told me that everyone who has ever tried to do something different has been knocked down at some point or another by people who are afraid or don’t understand.

The moral of this story is, of course, that starting a new business, be it drop ship or something else, is certainly not the norm for most people.  And all of us will come across those people who tell us not to; or tell us we’re crazy; or tell us we’re stupid to try.  They’ll tell us we’ll never make it, and we’re wasting our time.  Or we might come across the folks who threaten, judge, and prey on your venerabilities.

It has always been my driving motivation that I didn’t want to be an old man who always wanted to start his own business; but never tried.

If a new business is one of your goals, I feel drop shipping is a nice thing to try.  But whatever it is, you’ll never know unless you try.  I’m still here, my businesses are open, and I feel stronger for it.

Here’s to a successful future, and remember: don’t let the bastards get you down.

Drop Ship Digest Is Coming Back….

After a long absence, Drop Ship Digest is coming back. Stay tuned for a story that every new entrepreneur needs to be aware of. It really happened to me, and could to you.

Economic Issues

I’m curious as to how the economy is affecting small dropship retailers. My two stores are fairly young, so they are growing, although not tremendously. I’m sure in a stronger economy, I’d be doing better, but I’ll take what I can get right now.

So does a weak economy help or hurt us small retailers? I guess there are two sides. On one hand, Americans in general have less money to spend on stuff. So depending on what you sell, your customers have less income to buy your goods. So certainly we’re not in great shape in that regard. The price of everything is going up, so manufacturers will have to start raising prices. This causes your costs of goods to rise, and in turn, you may have to raise prices. No body likes this, and your customer will be unhappy. Two strikes. Finally, shipping costs are on the rise which may cause shopping carts to be abandoned once they see how much shipping will cost. Three strikes, ouch.

On the other hand, all retailers are facing these same factors. At least we don’t have large facilities to man, or pay rent on. We don’t have big inventory issues or have to worry about cutting jobs as the brick and mortars do. Secondly, fuel is the main reason that shipping costs are going up. So customers do have to choose between spending money on shipping, or putting gas in the van to drive to the mall. For me personally, I’d still rather order from my computer than run around town. Finally, the economic stimulus checks are coming, so maybe things will jump up soon.

I want to hear from you. What are your thoughts? How is the economy helping or hurting your business?