Sailing into the wind -- real-time marketing navigation on the Web

by Richard Seltzer, seltzer@samizdat.com, www.samizdat.com

Copyright © 2002 Richard Seltzer All rights reserved. To correspond with the author, send email to seltzer@samizdat.com Comments welcome.


This article was heard on the radio program "The Computer Report," which is broadcast live on WOTW 900 AM, Nashua, NH 12-2 PM Sundays.

My Internet: a Personal View of Internet Business Opportunities by Richard Seltzer, on CD, includes four books, 162 articles, and 49 newsletter issues that will inspire you and provide the practical information you need to build your own personal Web site or Internet-based business, helping you to become a player in this new business environment.

Part 1 -- Price changes

My main business these days is publishing books on CD ROM. My little company consists of just me. I work at home alone. Some days I feel adrift and becalmed in a vast ocean. Other days I get the pleasurable feeling of control, tacking this way and that, trying new sales channels, making new partnerships, making changes to my products and in how I let the world know about them with a few keystrokes, maneuvering my little boat this way and that, even sailing into the wind.

The good days typically start with an idea stimulated by a question often from a stranger, in an email discussion group or submitted through AllExperts. For instance, someone asks about the Amazon Advantage program as a sales outlet for a small publisher. I reply that Amazon Marketplace is a better approach, and in answering it dawns on me that although, in theory that looks like a good sales channel, I haven't been getting any orders that way, and I'm not doing all that great with Advantage either. So I try to sort out what's going on, making changes almost as fast as I can think of them as possibilities.

Quick definitions:

Amazon Advantage is a consignment program designed for small publishers who don't deal through distributors. If your books are accepted, they place a small order (one or two copies each). You ship these copies to their warehouse in Kentucky. Once they've received the books, they enter your information in Amazon's online catalog, which librarians and booksellers as well as customers use as a research tool, an alternative to Books in Print. And in the catalog, your book shows up as "usually ships within 24 hours", which is a lot more encouraging that 2-3 weeks, which is what they show for books that appear in Books in Print, but that they don't have in stock. When orders come in, Amazon collects payment and ships the goods. On the down side, Amazon takes 55% of the selling price; and you get paid about two months after the end customer buys.

Marketplace is a way that anyone can sell a book -- new or used -- directly to Amazon customers. At Amazon, click on Help, then Selling, then Marketplace, for details. You enter the ISBN (the standard book number) of the book you want to sell. If the book was published in the last 20-30 years, it's probably in their database. Then you indicate if it's new or used, and its condition; and the price you want to sell it for -- which must be less than Amazon's price  for a new one. That's all. When people view the Amazon page for that book, under the info about the Amazon price for a new one, they'll see a link for "used". Click on that, and they'll see a list of all the reduced price Marketplace offerings for that book. If someone buys yours, they go through the same shopping cart process as usual for buying at Amazon. Amazon processes the credit card transaction (you don't need to get a merchant credit card account to play here), and sends you the info about where to ship the book.

Unlike the common practice with online auctions, Amazon does not charge for listing items in its Marketplace. They collect a fee only when your item sells, deducting a commission of 99 cents plus 15% of the sales price from the money they collected from the customer. They automatically transfer your earnings to your checking account every 14 days.  If your item doesn't sell within 60 days, the listing is closed and you pay nothing. In that case, Amazon notifies you by email and provides  instructions about how to relist your item.

When one of your items sells at Marketplace, Amazon gives you a shipping credit to help cover your shipping costs.  For a book, their standard domestic shipping allowance is $2.26. That works fine for books on CD ROM, where with a slim jewel case, first class postage comes to only $.83, and padded bubble shipping envelopes, in bulk, cost between 25 and 50 cents. So you make a little extra profit on the shipping.

So, in theory, Amazon Marketplace looks like a far better deal than Amazon Advantage. Even if you are listed by way of Amazon Advantage with your regular retail price; if you sell the same book in Marketplace even at as much as a 50%
discount, you do better with a Marketplace sale than an Advantage sale.

But you need to be in the Amazon catalog to capitalize on Marketplace, and you want your book to be labeled "ships in 24 hours". So you want to sign up for Amazon Advantage first.

Then it dawned on me -- the price. Yes, I have my regular price which I list in my own online store, and which applies to anyone who buys directly from me. But there is no reason why that should be the price that I quote to Amazon or other book sellers. I could establish a significantly higher price at Amazon Advantage -- say $39 instead of $29; then list the same item through Marketplace for my regular price of $29, and it would look like a major bargain. And when that item sold through Amazon Advantage, even with the 55% discount to Amazon, I'd still do okay.

So as soon as I typed in and sent off my advice to the stranger who had started me thinking, I connected first to bowkerlink.com, where I changed all my prices in Books in Print -- $29 items going up to $39, and $19 items to $25. Then I went to Amazon Advantage, double-checked their procedures, and sent them a message detailing all my price changes. As soon as those changes take effect (which might be in a week or two), I'll go back and raise my Marketplace prices. Yes, they'll be higher than before, but the differential between the standard price and the Marketplace price will be greater, making the Marketplace a better bargain.

Will that make a difference in the long run? Maybe, maybe not. But it doesn't cost me anything to try. And thanks to the Web, I can make all those changes for two dozen products inside of an hour.

Then I consider eBay, which with its Buy It Now program serves as another sales channel for me. There I've found by experimenting that within a range of $14 to $29 price seems to make no difference in the rate of sales. [see ebay4.html] There I don't want to tinker with the price any more. But I do want to change the auction descriptions, so people perceive the price as a better deal. As soon as the Amazon price changes take effect, I'll note at eBay that this same book CD that I'm offering here for $29, sells at Amazon for $39.

At half.com which is owned by eBay and is another marketplace for books, I won't need to do anything. As soon as the price change in Books in Print take effect, those are the prices that will appear as standard retail at half.com; and the prices I have already set for my offerings there will automatically look that much better.

As for my own store at Yahoo stores, my prices stay the same, but as soon as the Amazon and Books in Print price changes go through, I will add some new verbiage. "Consider this an online manufacturer's outlet. Here prices are always heavily discounted. When you buy directly from us, we don't have to pay the middleman, and we pass the savings on to you. The very same CD that sells at Amazon and other retail stores for $39, sells here for $29; and what sells there for $25, sells here for $19."

So I shift my sail and shift it again, taking advantage of opportunities as soon as they appear -- making potentially important changes single-handed in less time than it would take me to explain what I was doing to someone else, and far less than it would take to convince other people that it was the right thing to do. Sometimes it's fun working at home alone, sailing into the wind.

Coming soon:
part 2 -- Responding to traffic numbers and other stats
part 3 -- Partnering and couponing
part 4 -- Taking advantage of Yahoo groups


Other articles about Internet business trends
Other articles about Internet marketing
Other articles about online shopping/selling

My Internet: a Personal View of Internet Business Opportunities by Richard Seltzer, on CD, includes four books, 162 articles, and 49 newsletter issues that will inspire you and provide the practical information you need to build your own personal Web site or Internet-based business, helping you to become a player in this new business environment.

Web Business Boot Camp: Hands-on Internet lessons for manager, entrepreneurs, and professionals by Richard Seltzer (Wiley, 2002). No-nonsense guide targets activities that anyone can perform to achieve online business success. Reviews.

A library for the price of a book.

Can we help you build an Internet business? Richard Seltzer is an independent Internet writer/speaker/consultant. Click here for details. or send email to seltzer@samizdat.com

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