Consignment Sales Online
The time, effort and money invested in an attempt to sell online might be better spent on improving sales at your local store.
This is the most annoying aspect of online sales, which is why it's first on the list.
You're honest and careful in describing the item you wish to sell. When someone says "Yes, I"ll buy it!" you're elated. You've made a sale, so off to UPS you go. When the item reaches its destination, many reasons lay in wait for claiming dissatisfaction and a demand for money back. Here's a few:
- Doesn't fit.
- The color wasn't quite right.
- "You misrepresented it!"
- Damaged in transit.
- Took too long.
- Every other excuse under the sun.
And pehaps the most prevalent motive: theft. The last two generations in our society have learned that VISA rarely sides with the merchant (you) in a credit-card dispute. No matter how convincing your argument might be to a friend or family member, you'll lose. You'll refund the money, pay shipping back and forth, pay card-processing fees both ways and if that's not enough, get socked with a $50 "CHARGE-BACK FEE". Even if you win, the customer will be off to every scam-reporting website complaining that you cheated them and will only agree to remove their comments if you cave in to their demands. (Sometimes those comments can't be removed because website webmasters are indifferent and nonresponsive to extra demands on their time with such nonsense, and a few require bribe money for their extra effort.)
Ok, so you're thinking the remedy is to offer a money-back period and keep customers happy. Agreed, except for the sharp rise in the number of people (in this country) who have learned how to use their credit cards online to steal from merchants. In this regard 'money-back guarantees' are an added invitation to purchase and receive items, dispute the charge and keep the merchandise! Who's going to come after them? The police will send squad cars to put the cuffs on a shop lifter but they surely don't want to be bothered if the very same person gets online and rakes you for $100. Even if we could say that 90% of consumers are honest, we can't know that the other 10% won't kill an online business, particularly one with few sales of low-priced merchandise.
The Cost of Creating and Maintaining a Web Presence
If you don't already know how you're going to create your piece of real estate on the Internet, the second pack of wolves waiting for you to step out into no-man's land are the providers of web services, from site development to web hosting. A couple of our consignment-software competitors hope to pick up a few extra bucks from those not in the know but charging $700 or so to create a measly 5-page website - no doubt from a template they purchase for $40. Plug in your information for a fat profit - when if you knew, you could have purchased the template yourself or better yet, just use any of the online selling services that have already been built - like eBay and Amazon. Fees there are very small compared to the 'old method' of designing, developing and maintaining your own website.
How will you collect payments from buyers? If you've never applied for a 'merchant account' (which credit-card companies require for the processing of payments to your bank account), be prepared to submit a stack of papers upon application, especially if you're self employed: tax returns, profit/loss and balance sheet, bank statements and a pint of blood. Be prepared to get locked into a long-term commitment that you'll be stuck in even if you decide to close up shop in the interim. Even if you succeed in getting a merchant account, the monthly fees and minimums could take too much of your hard-earned sales revenue - another reason for paying a small processing fee at online selling sites for sales processing.
These are the major drawbacks to going online with your consignment business. Be prepared. For every successful Internet sales effort there's probably 99 who are doing something else today.