Selling Equipment Online: What To ExpectWRITTEN BY MARY SEDOR
Article Date: 06-01-2007
Copyright (C) 2007 Associated Equipment Distributors. All Rights Reserved.
Concentrate on clarity, content, convenience, commerce and commitment.
On a typical day, 2 percent of Internet users sell something online. Although, according to a 2005 PEW Internet & American Life Project report, approximately one in six American adults – 25 million people – are selling items online, only about 35 percent of U.S. businesses use the Internet to sell products and dealers are even slower to follow the trend.
Dealers that aren’t selling equipment online are missing out on a powerful way to improve service and satisfaction with current customers and locate new customers. Customers prefer to shop with companies that offer them the greatest range of products and ways to buy them, says Ken Burke, author of Intelligent Selling: The Art & Science of Selling Online.
“There is a huge market for selling equipment online,” says Rich Rosell, AED’s Manager of Internet Services. “Selling equipment online opens up a dealer’s market to new customers. They don’t just have to sell to the guy down the street; a customer can be across the country or even in another country.”
Red Mountain Machinery in Chandler, Ariz., has been selling equipment on the company website for seven years.
“The online sales market has changed really quickly in the last five years,” says Chris Lohman, used equipment manager for Red Mountain Machinery. “Eighty percent of the people I talk to buy online from us.”
Lohman says his company also advertises equipment on Machinery Trader and having a digital camera and service records on their website makes it easy to sell online.
“The information is available to everyone on our site,” says Lohman. “I’m reaching people online who I obviously never could have before. For example, last February we sold a machine to a customer in England, one to South Africa and one to Mexico. All three leads came from the Internet.”
CMW Equipment in St. Louis, Mo., also provides a listing of available used equipment on their website. Dan Doherty, used equipment manager for CMW, says they use their equipment listings online as an avenue for trade-ins and to help customers sell their equipment. CMW takes a percentage of the final sale.
But Ron Weir, used equipment manager for Brandeis Machinery & Supply Co. in Louisville, Ky., touched on the reason why many construction equipment dealers don’t sell online.
“Using a computer to buy equipment would seem too risky for many,” says Weir. “If you can’t see it, taste it or touch it, it’s a transaction without any guarantees or at least a reasonable comfort zone for the buyer.”
Develop A Strategy
In order to be successful in e-commerce, develop a strategy tied to your business objectives.
“E-commerce must be regarded as a long-term operation rather than a short-term profit-making opportunity,” says
Sarah McCue in Farce to Force: Building Profitable E-Commerce Strategies. McCue says developing a strategy will allow you to decide whether or not Internet sales are truly a good fit for your company and enable you to identify parts of your operation that need refinement, adjustment or development.
“The belief that a firm can transform itself into an e-business by simply establishing a site, maybe adding hardware, and installing software is wrong and dangerous,” she says. “To be successful in e-commerce, companies must incorporate e-business concepts and attitudes into their overall business strategies.”
McCue recommends you benchmark where you are now in terms of inquiries, sales – by customer and region, sales promotion, staffing levels, shipping, record keeping, etc. prior to establishing your site. Then analyze the results after a specified period of time to see if your site is working to your advantage.
Possible measurements are increased gross margin, increased profit margin, increased number of customers, average days to respond to customer, and most popular/least popular pages visited.
With an e-commerce site you can:
Before You Begin
- Create enhanced credibility for the dealership by projecting a more solid, up-to-date professional image. Not being on the Internet will have your customers wonder about your business.
- Promote your products and services in new ways and reach more markets at no additional expense.
- Answer customers’ and prospects’ questions on products and services.
- Provide online quotes in a simpler and more streamlined method to potential buyers.
- Receive quicker customer feedback.
If you’re just getting started, here are some Do’s and Don’ts to consider:
Don’t expect having a website will automatically lead to instant sales.
Do believe the Internet is an website to make your products known worldwide.
Don’t believe having a website will replace your other promotional activities.
Do spend ample time planning and organizing your website.
Don’t let your website become stagnant; update it frequently.
Portrait of a Successful Site
According to Edward Coleman, author of Mastering the Art of Selling Cars Online, the average U.S. car dealer’s website has a conversion rate of 2.3 percent. For every 100 unique people that visit a dealer’s website during the course of a month, approximately 2.3 percent will submit a sales lead. However, there are car dealers with conversion rates of 12 percent to 22 percent.
“Having a website that converts can mean everything to a dealer that only needs an extra 20 or 30 deals per month to be in the driver’s seat over the local competition,” says Coleman.
So what’s the difference between a website that converts 2.3 percent and one that converts 20 percent? The more successful websites communicate well with their intended customers.
“As dealers know, their websites serve not only as an advertisement designed to create a reach, but also as an interactive virtual world designed to initiate a relationship,” says Coleman.
When designing how your equipment will be presented online, it’s important to think about how the information will be organized and presented. McCue calls them the 5 C’s: Clarity, Content, Convenience, Commerce and Commitment.
“If the site is well-structured,” says Burke, “the route from the customer’s entrance into the site to the act of completing a sale should be clear, easy to follow and easy to complete.”
- Keep your site simple and uncluttered. Make sure navigation is easy and logical to use.
- Provide in-depth descriptions of the products for sale.
- Allow buyers to search the site and compare products. Offer toll free 24-hour assistance.
- Make it easy to find information. Users should have to make no more than three clicks to find relevant data.
- Provide a confirmation email.
Because you’re selling online, customers obviously can’t “kick the tires” or examine the product. While that is a limitation, good websites stimulate customers in other ways.
“The web is dynamic,” says Burke. “No brick-and-mortar business can afford to restructure floor plans, personalize product displays and reprioritize shelf placements for each individual shopper, and yet that’s precisely what can be done on the web.”
A PriceWaterhouseCoopers study found close-up product images are the most likely feature to increase online sales, says Burke. Online sales are also increased by product availability, product comparison guides, search functions, 800 customer service numbers, consumer reviews and evaluations, and catalog quick-order features.
Build Customer Loyalty
“The more ways you allow customers to contact you when they feel like buying, communicate with you when there is a problem and participate when you are offering a loyalty incentive of some kind, the more successful those efforts will be,” says Burke.
Loyal customers trust the companies they buy from and buy more products more often. When you’re ready to sell equipment online, don’t underestimate the fact that trust and loyalty translate directly into more sales. Inspire loyalty by truly understanding your customers’ needs and wants.
“Just as in traditional retail, the cost of acquiring one new customer can often be more than the profit on the sale itself,” says Burke. “Therefore, profitability relies upon the first sales experience being enough to bring the customer back to buy again.”
Save your customers time in a way the competition can’t. That may mean maintaining records of their past orders and history, quick re-order lists, or shopping lists based on past purchases.
Offer your customers convenience in a way your competitors can’t. Retain shipping addresses or account information to make purchasing faster. Create online calendars and reminders. Once your customers have invested time and effort to build up resources with you, moving to another site is more difficult.
Meet needs your customers didn’t know they had. If you can think of innovative ways to bundle your products, provide services or suggest new uses for products, your customers will start coming to you for ideas.
Become a valuable resource to your customers. They may not know they want your products until you show them they do. They likely appreciate hints and information you provide and keep coming back for more.
Avoid Hide & Seek
There’s no point in having a website no one can find. As many as 85 percent of Internet users find sites through Internet search engines. Typical search engines look for matches to words and phrases in a large index. The best way to improve the effectiveness of searches for your site is to experiment with different key words or sets of words, says McCue.
Doherty recommends if you sell equipment on your website make sure the first paragraph on the homepage is very descriptive. Search engines scan that first paragraph to pick up your website, so be sure to list the specific types of equipment you’re selling.
When selling equipment online:
- Avoid selling used equipment sight unseen.
- Watch for scams. If it seems too good to be true, it probably is.
- Watch for channel misalignment. n This occurs when customers expect one thing and get another.
- Eliminate poor website design and resist all temptations to elevate form over function.
- Provide helpful tools. If your website has tools your customers expect to find, like to use or need, keep them.
- Provide superior customer service. n Many multi-channel businesses provide inadequate customer service.
- Emails should be answered in 24 hours max.
- Integrate your web capabilities into the organizational structure of your business.
- Eliminate inconsistent policies among channels. If your policies aren’t consistent, your customers could find themselves penalized for using one channel vs. another, which will result in a loss of satisfaction and loyalty.
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