Inventory hassles
If the dot-com failures of the past two years have taught the world anything, it is that novelty value is no longer enough to make an online presence fly. More practical business reality has become the order of the day. If you're selling products online, you need to remember the basic rule of e-commerce--which IBM has so concisely summed up in one of its latest ad campaigns--bad ideas don't get better online.
This fact has been the simple reason behind the colossal (and expensive, thanks to over-enthusiastic venture capitalists) failures of ventures such as pets.com, which found that not even the most appropriate domain name in the world could convince customers to buy profit-sustaining volumes of dog food.
Your company's products are probably a lot more valuable than dog food, so treat them accordingly. Before rushing onto the Web to start selling, carefully consider the range of products you want to offer online:
- Are there items that are hard to come by?
- Can your suppliers guarantee replenishment times so you can keep the right amount of inventory moving through the site?
- Should you offer a subset of your product range, or go the whole hog?
Although it's easy to go into an online retailing strategy assuming that you will eventually sell everything online, business caution should necessarily limit the scope of your exercise.
Inventory issues will become particularly pointed in the lead up to the Christmas shopping season, whose traditionally heavy volumes have proved too much for many e-tailers in the past.
That's why it's probably better to start with a small assortment of products, make sure you have the logistical procedures in place to ensure a continuous supply of product, and then add new lines over time.
