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The Perils of Online Business Models

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As online sales skyrocket, American retailers are finding out there is more to online shopping than just putting up virtual deals. The new Wild West may be a patch of land that doesn’t even exist physically, but for Christmas shoppers and online retailers the Christmas madness has affected their online buying experience. What was once the easiest way for couch potatoes to check people off their Christmas lists is becoming full of obstacles. Big retailers, like Best Buy, were caught unprepared for the large demand and canceled orders made as early as November of this year. It is becoming fairly obvious that online sales strategies need to take into account inventory fulfillment and customer service before they promise something they can’t deliver.

Cyber Madness

Cyber Monday was a huge success when it came to taking orders, but it doesn’t mean that all those orders will be fulfilled on time or at all. Christmas shoppers are hoping not just for deals, but also to get their deals by Christmas. This adds urgency to shipment and logistical nightmares for retailers who may not have enough of those hot deals in stock to fulfill them in time for Christmas. Also, with so many shoppers crowding a particular website on Cyber Monday, it can cause a website to crash which is exactly what happened to Bonobos, an apparel retailer. Even if it is not Cyber Monday, retailers must be able to handle a large number of visitors to their websites during special days like Black Friday or when a hot deal attracts too much attention.

Demand Increasing

Online sales are only increasing in demand, not decreasing. If a retailer is experiencing crashes or a site slowdown, it will only get worse next season. Retailers who are guilty of canceling orders risk losing their customers for good. Shoppers who may have ordered this year may avoid these stores if they think that will happen again. No one likes a late Christmas present, but a non-existent one is worse. Online sales have increased 15 percent from last year. A total of $32 billion has already been spent online this holiday season. There is big money in getting online sales, but retailers are learning that it takes more than just making the offer irresistible and available online.

Business Basics

In many respects, focusing on good business basics online will help retailers capture online markets and keep them for the long run. An online retailer should not promise something they can’t deliver. Customers expect more from their online purchases and retailers who are new to the game must compete successfully or be thrown out of the game completely. They should keep track of their inventory and fulfillment schedules even more so than when they are a brick-and-mortar store. They should have online customer service available for people who are waiting for their orders to be delivered or have a complaint about an order that they received. For a business to approximate the success of Amazon.com, they should create a solid business model that relies on good business practices even when their offerings are made online. This will mean an investment in good online programming with an eye towards customer satisfaction and flawless delivery.

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