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10 Secrets of Selling Online
by Paul Graham
Index
| 1. Work Works If there is a single secret to selling online, it is to work hard. Hard work is the secret to succeeding in almost anything, but it is especially important on the Web. |
6. Emphasis Service As I mentioned before, most of the people who visit your store will still find the idea of buying online a little strange. You have to reassure them. The most powerful confidence builder is a top-quality site: high production values go to work directly on the visitor's subconscious. But it's also important to reassure visitors explicitly. |
| 2. Choose The Right Niche What sells online? That is probably the question we get asked most. At the risk of being repetitive, what sells online is work. In our experience, the difference in success between one store and another depends a lot more on how hard they work than on what they are selling. |
7. Promote Your Site Having a great Web site is not enough. You also have to bring people to it. Most sites get most of their hits from search engines, so step one is to make sure that you are indexed in all the major search engines. If you are using Viaweb, our software will do this for you automatically (except for Yahoo, which you should do by hand). Otherwise, make sure to submit your site to all the major search engines. |
| 3. High Production Values In a print catalog, "production values" refers to the quality of the
paper and printing processes used, the number and quality of images, and the care taken
with graphic design. High production values are critically important in catalogs, which
have to convince consumers to buy based on a few sheets of paper. |
8. Lower Your Prices The best way to spend money promoting your Web site is to lower your prices. You can't lose. When you spend money on a banner ad, you have to pay for everyone who sees it, whether they buy anything or not. But when you "spend" money by charging less, you only have to pay for the people who actually place orders. So you never pay for this form of promotion unless it works. |
| 4. Make Your Site Easy It is no accident that the people who visit your site are called "Web surfers". They have the same short attention span as TV "channel surfers". The average visitor to a Web site looks at only three or four pages before going somewhere else. Visitors will leave at the slightest obstacle. |
9. Change Your Site Want to know how your online store did last week? Here is a quick way to estimate your sales: How much time have you spent working on, and promoting, the site over the last couple weeks? |
| 5. Be Real Anyone
planning to sell online should start by shopping online. Next time you need to buy
something, look for it on the Web. |
10. Think Globally The remarkable thing about the Web is not just that you can sell direct to consumers so inexpensively, but that you can sell to consumers worldwide. Some users get as many as half their orders from overseas. But it is strange to put it that way, because some users are overseas companies. So just as you can shop from any country, you can also set up shop from any country. The whole idea of overseas is starting to dissolve. |
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If there is a single secret to selling online, it is to work hard. Hard work is
the secret to succeeding in almost anything, but it is especially important on the Web.
It's true what they say: the Web levels the playing field. A high school can make a better Web site than a large industrial company. On a level playing field, how
big you are matters less than how hard you work.
There are millions of consumers out there, but lots of other Web sites are
competing for their attention. So you can't just build an online store and walk away from
it. You have to work hard to draw visitors to your site, work hard to create a site that
those visitors want to buy from, and work hard to give those buyers such good service that
they and their friends will buy again in the future.
So the bad news is that starting a business on the Internet is just like starting any
other business: work, work, work. The good news is that it is a lot cheaper.
The Web gives you something that has never existed before in history: an inexpensive sales
channel direct to consumers. Before the Web, if you wanted to sell direct to consumers,
you either had to build retail stores or do catalog mailings. In either case the entry fee
is hundreds of thousands, if not millions, of dollars.
On the Web, you can sell direct to consumers worldwide for a hundred dollars a month. You
have to work hard to exploit this opportunity. But if you are willing to work hard, you
don't need a lot of money to get started.
What sells online? That is probably the question we get asked most. At the risk of
being repetitive, what sells online is work. In our experience, the difference in success
between one store and another depends a lot more on how hard they work than on what they
are selling.
I know of two stores, Store A and Store B, that are selling exactly the same products.
Store A sells five times as much as Store B. The reason is, Store A works a lot
harder. They work on their site almost every day, and they also do more to promote it.
But although work is the decisive factor, what you sell matters too. As a general rule,
whatever sells in print catalogs will also sell on the Internet. If the customer has to
see something before buying it, then you probably can't sell it in a print catalog, or
online. Otherwise, you should be able to sell almost anything.
It's true that more men use the Internet now than women, so if you sell something that men
buy, you are likely to have a slight edge. Someone who works with computers is almost
certain to have Web access, so anything computer-related is likely to do comparatively
well. And Internet users are richer and better educated than the population as a whole, so
luxury items may do well.
But these trends are not set in stone. When televisions first became available, the first
buyers were probably richer and more technologically inclined than the population as a
whole. But TV rapidly became mainstream, and the same thing is happening to the Web.
More important than the type of products you sell is the size of the niche you choose.
In the physical world, niches are based on geography. I often buy food at the corner store
near my house, despite the small selection and high prices. If this store were more than
100 yards away, I would never buy anything there. But in the physical world, proximity is
king.
Not on the Internet. Geography is almost irrelevant on the Internet. Niches on the
Internet are based on what you sell, not where you are. And whatever you sell, you have to
be the place to buy it, because your customers can just as easily visit any other
online store.
So you have to choose a niche small enough that you can dominate it. For example, if you
are a tiny company, it would probably be a mistake to try selling top-40 CDs online. You
would have a hard time competing with CDNOW. But you
would probably have a chance at becoming the site for European folk music.
One certain way to dominate a niche is to be the manufacturer. For example, Harbor Sweets is going to be the
site for buying Harbor Sweets, because they make them. Manufacturers may be the biggest
winners on the Internet, especially small manufacturers who have till now been at the
mercy of the channel.
In a print catalog, "production values" refers to the quality of the paper
and printing processes used, the number and quality of images, and the care taken with
graphic design. High production values are critically important in catalogs, which have to
convince consumers to buy based on a few sheets of paper.
Production values are even more important on the Web. Consumers will not buy from an
amateurish Web site.
Most of the people who visit your site will still find the idea of ordering online
unusual. I have been buying online for two years, and I still find it a little unusual. So
your site needs to inspire visitors with confidence. It should say that yours is the kind
of company that does things right, and that if I order something from you, it will be a
good experience.
Of course there is no direct connection between the quality of your site and the quality
of your company. A company could have a brilliant graphic designer and lousy products. But
usually there is a connection, and that is what visitors to your site will assume. If your
company is unable to put up a good Web site, then it seems natural to assume that your
company cannot deliver good products or services.
The most extreme case, of course, is when your company does not have a Web site at all.
Occasionally I go to look for information about some product, but find that the company
either doesn't have a Web site, or has a site with nothing in it.
Not impressive.
Almost as bad as the empty site is the site that looks amateurish:
for example Dot Pets or
Welcome To COMPUTER Help
in screen text, they often display

as gifs. Text rendered as a gif can be antialiased, meaning you don't see jagged edges.
You can use any font, not just whatever the browser has, and you can also get 3D effects
like beveled edges and drop shadows, which (used sparingly) make a site look richer.
When I say that better sites use more images, I do not mean that they use more k of
images. Big images take a long time to download, and that is the kiss of death in an
online store. In a top-quality site, images are the seasoning, not the foundation of the
site. Use small, punchy images that will carry a lot of the surrounding area.
In particular, avoid the common mistake of putting a huge
image on your front page. By all means put your logo on the front page, and in fact on
every page, but make it download fast. Your logo is not what your customers came to see.
They came to see your products. But don't throw full-size product images at your
visitors until they ask for them. Sophisticated sites begin with a page of smaller thumbnail images, which visitors can click
on when they want to see more.
If you don't use thumbnail images, your section pages will be too slow. For example, this page was made with iCat, which cannot generate thumbnail images automatically. Instead, the designer has included full size images of each product. So the page weighs in at 330k, which takes 1 minute and 50 seconds to download with a typical (28.8kb) modem. You can't expect Web surfers to wait almost two minutes for a page.
If you don't use thumbnail images, your section pages will be too slow.
Make your product images as high quality as possible. Consumers won't buy from an image
that looks like a badly lit Polaroid. So have a professional photographer take your
photos. Images shot with a top-quality digital
camera look brightest, but you can also scan transparencies
or even scan images right out of your print
catalog.
If possible, try to make the background color for the product images either the same color
as your pages, or transparent. Product shots look better when the object seems to sit
right on the page.
Finally, don't make spelling mistakes in your site. A few of those will undo all the other
work you've done to make your site look professional.
It is no accident that the people who visit your site are called "Web
surfers". They have the same short attention span as TV "channel surfers".
The average visitor to a Web site looks at only three or four pages before going somewhere
else. Visitors will leave at the slightest obstacle.
So if you want people to visit and order from your site, don't put any obstacles in their
way. Whatever you do, don't force visitors to register. You have to create yourself an
account, with a user id and password, before you can even order from
Wal-Mart
. Do they expect online shoppers to remember a userid and password for every online store they visit?Anyone planning to sell online should start by shopping online. Next time you need to
buy something, look for it on the Web.
When you put yourself in the consumer's place, you'll find it is not hackers you worry
about, but the merchant. Almost anyone can set up a Web site. So visitors need to be
reassured that they are ordering from a real company, and not just a teenager running the
site out of his bedroom.
Anything you can do to show that you are real will help increase orders. Include your
name, phone number, and street address. Toll-free numbers are especially good. If
possible, include an image of your catalog or building, customer testimonials, or even a brief
company history.
The best way to show that you mean business may be to include a full selection of
products. One of the things that distinguishes winners like Amazon and CDNOW is
their huge inventories, which show that they are serious about selling online.
A surprising number of companies have online stores that send the opposite message. Some
like the Gap don't even have ordering working yet. It makes you wonder, do these guys
actually want your business?
A lame Web site is better than no Web site, but not much better. Especially since the
latest generation of Web tools make it so easy to build sites with online ordering. The Frederick's online store has hundreds of
items, and it was built by one person in a couple of days.
As I mentioned before, most of the people who visit your store will still find the idea
of buying online a little strange. You have to reassure them. The most powerful confidence
builder is a top-quality site: high production values go to work directly on the visitor's
subconscious. But it's also important to reassure visitors explicitly.
For example, if you are determined to provide great customer service, tell your visitors
so, right on your site.
Guarantee that they will be
satisfied with what they buy from you, or you will refund their money with no questions
asked.
Your site should offer secure online ordering, and you should advertise this to visitors.
Some sites put the Netscape key icon
right on the front page.
But If you try ordering online yourself, you'll find the biggest concern that you have is
not security. I bet what you'll find yourself thinking is, who are these guys? Did they
actually get my order? Are they going to send me the products? When?
When someone places an order from a Viaweb store, we always generate a confirmation page
thanking them for their order, and telling them their order number. That is a good first
start, but you as the merchant should also send them an email thanking them for their
order and telling them when it will arrive.
And make sure that you ship orders quickly. Web users want fast results. They don't want
to hear that they should expect to wait 4-6 weeks for delivery. This is not 1910. Tell
them they will get their order in 3 days.
And make sure they do. The consumers ordering on the Web this year are like the scouts of
an oncoming army. They will determine your reputation for service for years to come. If
you do a great job, they will tell all their friends about you.
Ordering online is still an unusual thing to do, so people who do it are proud of how
adventurous they are. Have you ever listened to someone talk about ordering online?
"It was no big deal," they say, swelling visibly. "I just went to their Web
site, found what I wanted, and gave them my credit card number. Three days later the stuff
arrived. No problem."
People love to be able to tell such stories to their friends. It's the most valuable kind
of free advertising for you. So make sure that your customers have good stories to tell.
If you do a bad job, your customers will also tell all their friends, and you will be in
big trouble. Word spreads very quickly on the Internet.
Especially this year, treat your Web customers as if each one were as important as ten
customers. Because if you treat them well, each one will turn into ten customers.
Do you want to hear what your customers have to say about your Web site or your products?
You should. Tell them that you want to hear from them, and put a prominent email link
and/or phone number in your site. Try including a link that will let visitors send email
directly to the president of your company. Few will bother to send mail, but everyone who
sees it will be impressed by your attention to customer service.
When a customer does send you mail, respond promptly! Customers who have taken the trouble
to send you email are like gold. Talk about qualified prospects. So treat them like gold.
If you can, make it a corporate policy to respond to email within an hour or two at most.
You have to reply eventually, so why not do it right away? Customers will be delighted to
see that you care about them.
Having a great Web site is not enough. You also have to bring people to it. Most sites
get most of their hits from search engines, so step one is to make sure that you are
indexed in all the major search engines. If you are using Viaweb, our software will do
this for you automatically (except for Yahoo, which you should do by hand). Otherwise,
make sure to submit your site to all the major search engines.
You don't need to pay a service to submit your site to hundreds of search engines and
indices, because there are only 7 that matter: Yahoo, AltaVista, Excite, WebCrawler,
InfoSeek, Lycos, and HotBot. All other search engines and indices might account for 1% of
your hits, combined.
Don't expect your site to show up in search engines immediately. It will show up in
AltaVista in a couple days, but most other search engines are slow to add new listings.
Some only seem to rebuild their databases every couple months.
The second most common question people ask us is: How do I get my site to appear first in
the search engines?
There is no easy trick that will work in all cases, because (a) all the search engines are
different, and (b), if there were a trick, everyone would use it, and it would be just as
hard to come up first.
As a general rule, someone searching for "chocolate" is more likely to get a
page in your site if the word chocolate appears often on that page, especially if it
appears in the title. But it will not work simply to have your page begin with the word
"chocolate" repeated 100 times. Most search engines filter out sites that try
that. The best approach is to use key words frequently in your site, but not in a way that
appears unnatural.
For example, Vitanet is a site selling
dietary supplements. The section selling DHEA contains a lot of information
about DHEA. The purpose is not only to sell the product, but to draw hits from search
engines. The more text in your site, the bigger a target you present to search engines.
One thing not to do, if you want traffic from search engines, is use software that
generates your pages dynamically. ICat works this way, for example. Search engines
don't index dynamically generated pages. Any part of your site that is dynamically
generated does not exist, as far as search engines are concerned.
The highest-paying traffic does not seem to come from search engines, however, but through
links from related sites. And the best way to get other sites to link to you is to give
them a percentage of the sales generated by that link. Industry leaders like Amazon.Com
have used this technique with great results. (Viaweb has built-in tools to help you create
and manage revenue-sharing links.)
Which sites should you get links from? Put yourself in your customer's position. If you
are selling Star Trek merchandise, go to AltaVista and search for "star trek".
The sites you get sent to are the same ones your customers will get sent to, so those are
where you want to start asking for links.
Another way to get traffic is to buy banner ads that lead to your site. For example, you
can buy banner ads on search engines that are tied to particular keywords. When you search
for "books" in many search engines, you will see a banner ad for Amazon.Com.
Be careful when you buy banner ads. Banner ads are expensive, and even if they bring lots
of visitors to your site, there is no guarantee that these visitors will place orders. Our data suggests that few online
purchases are impulse purchases. Most buyers show by the keywords they use that they meant
to buy before they even reached the site where they placed the order.
So if you buy a banner ad that just brings thousands of random people to your site, few of
them will place orders. I know of one online store that bought a banner ad on Playboy's
Web site. I can't disclose the name, but let's say they were selling modems. Most of their
buyers were men, and they knew that thousands of men visited Playboy's site, so where
better to put an ad? And in fact, they did get thousands of visits from this banner. But
not one order. Why? Because those people were not thinking about buying modems. The mere
fact that they were at the Playboy Web site showed that.
In retrospect the advertiser might have done better to put an ad on a site giving advice
about which modems to buy. An ad like that might bring far fewer visitors than a Playboy
ad, but they would all be people who actually meant to buy modems.
If all you know about your site is how many hits you get, then of course you tend to think
that hits are what you should maximize. But hits are not what you need in an online store.
Sales are what you need. So you should find the sources of hits that turn into the most
sales, and focus on them.
How do you do that? Tracking tools. Good tracking tools can tell you where all your
visitors come from, and how much visitors from each source spend. Viaweb's tracking tools can even
tell you which search keywords your visitors used in search engines, and how much money
people searching for each phrase spent.
(Viaweb's tracking tools are currently the best in the business. They've earned rave reviews from press and analysts.)
For example, if you are selling Star Wars products, you will get a lot of hits from search
engines. You may find that you get ten times as many hits from people searching for
"darth vader" as for "darth vader figurine". But I would bet that the
people searching for "darth vader figurine" spend more money at your site. So
what keyword do you buy from search engines? If you want sales, buy "figurine",
not "darth vader".
Finally, if you have a catalog business or retail stores, don't forget to promote your
site to your existing customers. If you have a catalog, include your URL in it. Your Web
site is the perfect place to sell limited quantities of closeout items that would not be
worth including in your print catalog. I know one company that includes messages
throughout their print catalog telling customers that closeouts are available on their Web
site at special prices. They say there is a noticeable jump in orders each time their
catalog goes out.
The best way to spend money promoting your Web site is to lower your prices. You
can't lose. When you spend money on a banner ad, you have to pay for everyone who sees it,
whether they buy anything or not. But when you "spend" money by charging less,
you only have to pay for the people who actually place orders. So you never pay for this
form of promotion unless it works.
Security concerns are not what prevent people from ordering online. The real problem is
that online shopping is just not a regular part of people's lives yet. Most people have a
collection of physical stores and mail order catalogs that they buy from regularly. But
online shopping is so new that most Web users haven't yet found their regular Web stores.
This is good news for you. It means that there is room for you in their list of regular
online stores. But you need to nudge them into ordering from you, if you want to become
part of their regular routine. And there are few more effective nudges than the prospect
of getting the very cheapest price for something.
The emotional satisfaction of getting something at the cheapest price is almost like a
drug. People will go to any length to get it. If you want to see online commerce happen,
take some commodity item like a Sony Walkman and offer it for sale on the Web for $10 less
than people can get it anywhere else.
It will be worth it, believe me, if you can establish yourself as one of everyone's
regular stores. Amazon Books has done that, and now they have every prospect of being the
place to buy books online. If Borders and Barnes & Noble are not panicking, they
should be. They waited too long. Someone else has occupied the space they thought was
reserved for them, and it's going to be very expensive, and perhaps even impossible, to
dislodge them.
If you use lower prices to make your site a habit with some group of consumers, you can
likewise lock up a valuable piece of real estate. (Hint: start today.)
Lowering prices is not just a good trick to jump-start sales. It also makes economic sense
in the long run. It's much cheaper to sell on the Web. If you split the savings with the
consumer, you both win.
Many Viaweb users are catalog companies, and they tell us it costs between 40 cents and a
dollar apiece to print and mail catalogs. The percentage of people who order from your
catalog is called the conversion rate. You're lucky if you get a conversion rate of 5%. A
5% conversion rate means that 1 person out of 20 orders. So that 1 person has to pay for
printing and mailing 20 catalogs! If the catalogs cost 50 cents each, that's $10 right off
the top of the order.
Under conditions like these, it is a testament to the drive and ingenuity of the catalog
companies that they can make a profit at all. And those who do make a profit are totally
at the mercy of postal rates and paper costs. If you can convert a substantial fraction of
your consumers to the Web, you can not only increase your profits, but also decrease your
vulnerability to factors like paper costs, which are outside your control. From this point
of view, lower prices are a strategic investment.
Want to know how your online store did last week? Here is a quick way to estimate your
sales: How much time have you spent working on, and promoting, the site over the last
couple weeks?
Overall, the more time a company spends on its online store, the better it tends to do. I
doubt anyone can say now what the perfect online store should look like. The whole
business of Internet commerce is barely three years old. You are unlikely to get things
exactly right on the first try. Like most sites, yours will evolve.
So you should be constantly improving your site. And even if you think your site is
perfect, you should still change it regularly. A Web site that has not changed for months
is boring. It feels abandoned.
Have you ever visited a store in a remote area where the turnover is obviously very low?
Where the items on the shelves are faded, or have dust on them? Do you want to buy from a
store like that?
Big department stores seem to know that a certain amount of bustle is necessary to show
that they are alive. They are constantly changing their displays. Change is even more
important on the Web. Especially since so many of your competitors don't know it, and
leave their sites unchanged for months at a time.
Regular change in a Web site is a form of high production values. Having high production
values means, in short, looking expensive. And a site that changes regularly looks
expensive: for most online stores it is expensive, because the site is maintained
by Web consultants who charge by the hour.
Fortunately, with the latest generation of store building tools, it is easy to change your
site regularly. Many of our users edit their sites several times a week, and some do every
day.
One easy way to make your site change regularly is to list featured items on the front
page, and to rotate them every few days. In Viaweb, at least, you can do this in under a
minute.
Another slightly more laborious approach is to have some kind of news component to your
site. For example,
Softpro Books
has a new arrivals section, which is updated every weekday. This is a big attraction in a site selling technical books, because customers always want the very latest. By taking this extra effort, Softpro has made their online store into more than a store. Customers return to the site regularly as a source of news, and that is one of the main reasons Softpro is so successful.The remarkable thing about the Web is not just that you can sell direct to consumers so
inexpensively, but that you can sell to consumers worldwide. Some Viaweb users get as many
as half their orders from overseas. But it is strange to put it that way, because some of
our users are overseas companies. With Viaweb, you make your store over the Web. So just
as you can shop from any country, you can also set up shop from any country. The whole
idea of overseas is starting to dissolve.
Sometimes that takes new users by surprise. One Viaweb merchant is a small manufacturer
who had never been able to afford to sell direct to consumers. Instead they sold their
products to catalog companies, who resold them to consumers. The low cost of selling
online encouraged them to try and sell to consumers themselves.
They found they had access to a wider audience than they expected. The day after they
opened their site, they got their first order, and it was from Malta. The island of Malta,
in the Mediterranean. How did one ship a package to Malta? They figured that out. The last
I heard, the customer in Malta had inquired about being a local distributor.
You may, like them, go from being taken by surprise by the international aspect of the
Internet, to taking advantage of it. If you have great products at the best prices,
consumers in Finland and Malaysia and Peru will find you. Make it easy for them. You don't
need to translate your site into many different languages, but you should show that you
welcome orders from all over the world, and explain clearly what your shipping rates are
to each country.
With international customers, it is especially important that your site look legit. Even
in the US, consumers who buy on the Web need to be reassured. Imagine what it is like for
a Japanese consumer. Would you order from a Japanese site? Just possibly, if the site
looked really professional. Japanese consumers are going to be equally cautious about
ordering from your site. But if your site is flawlessly professional looking, and your
prices are good, they will take the plunge. Some Viaweb merchants get significant numbers
of orders from Japan.
Ultimately, international orders are going to be a big source of revenue for American
companies. Americans who go to Japan are often disappointed to find that Japanese products
cost more in Japan than they do in the US. Why is that? Because rents are high in Japan,
and the distribution network is inefficient. Retail prices are lower in the US than in
most other countries in the world, for similar reasons. Americans would be amazed at the
price of a pair of Levis in Italy.
Merchants look at these inequalities and see opportunity. Trade is all about price
differences. For centuries European merchants made fortunes by buying spices in the far
east, where they were cheap, and selling them in Europe, where they were expensive. The
Web opens up a similar opportunity, for a lot less than the cost of outfitting a ship.
Now that the Web offers consumers in other countries a way to do an end run around their
local middlemen, US companies are going to be the main beneficiaries. I know one Web
merchant who is already selling men's shirts by the dozen to customers in Europe, where
men's shirts are much more expensive.
Of course the opportunity depends on the product. It may never apply to products that are
hard to ship overseas. But retail price differences are so pervasive around the world that
there is probably some way to take advantage of them, no matter what business you're in.
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