Is Affiliate Marketing Best or Group Buying Daily Deals or Online Auctions for Retail

By Greg Rogers
Retailers used to set up a shop, sit inside and await the arrival of customers and their cash.

They sold their stock by putting it on display to people who came to them. It was a centuries old passive marketing technique supported by classified advertising in the local paper.

It is obvious to everyone reading this that the Internet has changed how retailing is conducted forever.

The percentage of products sold in shops has declined but retailers like David Jones, Myer and Harvey Norman continue to operate “bricks and mortar” shops because people still “shop”.

Buying online is not the same as “shopping” where the smell, feel and look of a product can be seen first hand. That explains why many shop owners complain that consumers inspect in shops then go home or back to work and buy the product that they inspected in the shops, online. ( with the bonus that it will be delivered to their door often at no extra cost )

Internet marketing has enabled almost anyone to become a retailer. The barriers that prevented real competition to Myer and the major stores no longer exist.

There is no need to pay rent in expensive streets or to pay high wages to shop assistants if retailers sell online. Quite often, there is no need to even have a warehouse as some Asian suppliers “drop ship” to order and have the products moved from the factory to the buyer within days.

Anyone wanting to sell online has some serious thinking to do. Here are just five of many options.

1. Get a website built and sell online with virtual store software like Virtuemart which is a free shopping display, sale and processing program.

2. Open an account on eBay and compete with every other seller who tries to be the cheapest to sell in huge quantities to make up for shallow profit margins.

3. Use an online auction business like Graysonline.com to handle the sale of stock.

4. Use a group buying daily deal site to sell the products cheaply with discount vouchers and coupons.

5. Start up an affiliate marketing campaign online using high traffic websites to advertise the stock in return for a commission on every product sold from a click.

Each of these five options will work. They have positive aspects that make them attractive to new age retailers.

Here are some of the benefits of using these methods for selling online for small and startup businesses.

Getting an online shop built.

There is some free software like WordPress and Joomla which make very good websites. Don’t let the “free” part fool you into thinking that “free” means junk. Joomla especially has 1000′s of people around the world making modules, components and plugins to enhance the function and appearance of Joomla websites. Both Joomla and wordpress are good for online sales with add on shop components like HikaShop and Virtuemart making them a fully functional shop.

Business people can place stock on the pages, set up a paypal.com account, get traffic to visit the website and become online sellers.

Sourcing stock is easy as Alibaba.com can supply anything that China can produce.. ( everything ).

The drawbacks to making a new online shop include the fact that Google will take a while to trust the shop as a place to send people who use its search engine. Google users expect the results to be high quality so Google algorithms will take note of a new online shop and see how it goes. Hint: Sign up to Google Webmaster Tools to make it easy to interact with Google.

It will take a while to make sales. You will be frustrated that lots of time, brainpower and effort will not make sales immediately.

Watch out for so called SEO experts who offer to get a new store on page one of Google.

Using eBay to sell

By far the easiest way to become an online seller is to open an eBay account. eBay is huge because it is probably perfect. Sellers advertise, eBay brings in the buyers ( no shop needed ) and eBay makes the sale.

Using eBay to sell online is painless. You will not own your store but if the product is what people want and the price is right, sales will be made.

Using online auctions like Graysonline.com

Graysonline.com is a huge business based in Sydney that operates nationally selling everything. I mean everything. Army trucks, cars, make up brushes, TV sets, office equipment, home wares, guitars signed by Elvis have all featured on Graysonline. It is possible to furnish a home, office, camp ground or airline terminal using GraysOnline.

For someone wanting to be an online retailer, Graysonline offers a viable option. Auctions are not always about second hand, distressed or reconditioned stock. Anyone who can source a product at a low price can engage them to sell it online. GraysOnline have a no reserve business model but they offer access to hundreds of thousands of email subscribers and website viewers who all see what it there. Competition creates the auction fever that drives this sort of marketing.

A retailer without a shop or a websites can sell their stock through Graysonline.com

Using a daily deal or group buying site.

Retailers can supplement their in-store or own online operations by running deals.

There are people who buy cheaply in Asia and sell their stock only at deal sites like Deals.com.au and Cudo.com.au That is all they do. They source in China and sell deals.

Deal sites insist on low prices as they have to offer a “deal” not full retail price. The negative aspect of a “deal” is said by some commentators to involve a degradation of brand value. Do you ever see high value household names on deal sites? Some stay away because discounting implies negativity.

Deal sites also charge high commissions. That is how they fund their operations like building buyer databases, paying for advertising and covering losses when merchants fade away or go broke.

Deal sites not only sell products but their business model works well for services like beauty treatment and travel where there is not a “thing” involved and no shipping is needed.

Deal sites are similar to affiliate marketing in that a third party is selling a retailer’s stock. We asked Adam Schwab the CEO of Deals.com.au and Cudo.com.au about deal marketing.

He said, “Both deal and affiliate marketing have their respective strengths. The beauty of deal marketing is the ability to move stock quickly and also get an element of virility – that is, a great offer will spread through various on-line channels, email and social media to get a fantastic sales results. Affiliate marketing is cheaper, but also a far slower burn, with sales tending to come through incrementally over a longer period.”

Affiliate marketing for retail sales.

Affiliate marketing is where a seller sets up a network of websites that carry advertising banners or even entire catalogues of their products. The idea is that visitors to websites that have content related to the products that retailers want to sell, are great spots to advertise in.

In exchange for helping with making sales for the seller, the affiliate receives a commission.

Affiliate marketing is big business. In Australia, CommissionFactory.com.au provides a service to retailers by acting as a meeting place where other website owners pick and choose which retailers they want to work with. Similarly, retailers can choose to accept or reject third party sites who seek to represent their brand.

We asked Zane McIntyre the Co-Founder of Commission factory for his thoughts on affiliate marketing.

He said, “Affiliate marketing is not about deals. It is about extending the reach of a retail business and boosting brand awareness.”

“Affiliates are brand advocates. They do not sell temporary “deals” they offer long term sustainable solutions to high quality retailers who want to expand their reach.”

Summary

Retailing has changed. Instead of going broke without a shop in the main street or at a Westfield Mall, a business has more chance to succeed without a shop because of the flexibility of working online and not having rent to pay. A retail startup could not bother with a shop and instead, use all five of the online retail options discussed here and, if the price is right, make money.

To succeed in online sales, time and a small budget will have to be allocated for advertising.