Another way to differentiate yourself from the plethora of eCommerce sites around is to have really good customer service and delivery. I once setup a small online shop selling one particular hot form of consumer electronics at the time, and what gave me the edge over drop-shipped competitors was overnight delivery to anywhere in the country. We always had stock on hand. People are willing to pay extra for good service and certainty, especially when they need something quick.
The way the business worked was that I was working full time in an unrelated s/w development job. My wife would pack the orders in the morning and the courier would pick up from our home location every afternoon. I looked after the invoicing etc. at night; but with an automated process it really didn't take up much extra time. I did try drop-shipping as well but it didn't work out as well for us, although of course drop-shipping would probably enable you to have a larger sales capacity.
You're exactly right - outstanding service is a GREAT way to differentiate yourself. And it's often some of the best marketing you can do, too.
I'm constantly amazed at how many companies will make you send something back to get a refund / replacement, even if it only costs a few bucks.
If our customers receive a defective item that costs less than $20, we simply ship them a new item immediately, without asking them to return the old one. It only costs us a few bucks, saves the customer up to 2 weeks of wait time, save us having to process the return and usually earns us a life-long customer and vocal advocate. It's a no-brainer, and I don't understand why more companies don't do it.
If the defect is recurring, or on a really expensive item - yes. It will go back to the manufacturer. But many defective items aren't indicative of a mass problem, but rather a one-off slip up.
If it costs $10 to ship a product from the customer to the wholesale, and then another $10 so ship it back to the manufacturer for a refund, it just doesn't make sense to do for inexpensive items each time a defective one is discovered.
Very true - and it becomes a self-fulfulling mission to maintain that high level of service. Its hugely rewarding to get positive emails and testimonials from customers every day.
The way the business worked was that I was working full time in an unrelated s/w development job. My wife would pack the orders in the morning and the courier would pick up from our home location every afternoon. I looked after the invoicing etc. at night; but with an automated process it really didn't take up much extra time. I did try drop-shipping as well but it didn't work out as well for us, although of course drop-shipping would probably enable you to have a larger sales capacity.