The world of ecommerce is about twenty-five years old. And the pandemic of 2020 demonstrated that it can continue to grow at an astounding rate. According to Digital Commerce 360, online commerce grew 44% year over year in 2020.
What is an Online Store?
Let's start by defining our terms. I *do not* recommend that you open a big, monster, full-featured store to compete with Best Buy, CDW, or Dell. I'm not recommending that you get in the commodity mass-sales business. But I do encourage you to build a store that increases and improves your business.
But there are plenty of things you should be
Offering your clients. I hope you see that we've been moving in this direction for a long time.
When I had an MSP, I always tried to be my client's source for ink, toner, cables, keyboards, UPSs, speakers, and so forth. These are consumables and smaller items. You can see that these are just a step away from printers, monitors, scanners, and other common equipment.
Stop and think.
Do you think that printers are clearly in your product line, but toner is not? Many MSPs have never focused on the smaller items and consumables, but they are a natural extension of what you already sell. And let's be honest: There's a massive markup with these smaller items.
Look at what you pay for CAT6 cables versus what clients would pay at Office Depot, Staples, and Best Buy. Even at "discount" web sites, you can sell cables priced by the foot and be cheaper. But . . . I don't recommend you sell on price.
Three Types of Products
I recommend that you divide products/services into three broad types:
1) Easy and self-explanatory. This includes all the little things listed above as well as big-screen TVs for the conference room, cameras, lighting kits, all-in-one workstations, VOIP phones, and cell phones.
2) Your recommended catalog. This includes your "recommended configuration" for a desktop, laptop, and even entry level server. Yes, I know that prices bounce up and down, but you know you can define a machine that you can sell at a good price for three months. Re-evaluate and repost your recommended configurations each quarter.
3) Consultation required. This is the really juicy good stuff. This category divides nicely into two sub-categories. The first sub-category consists of larger items that businesses might want, and might even buy without consultant. BUT, once they start exploring something like a high-end firewall, they will be invested enough that you can engage them in a conversation. In fact, you might be able to ding their credit card for something like $3,000 and then engage them in a discussion.
The second sub-category is your primary offering:
Managed Services, Cloud Services, and major projects. You probably don't want to post this pricing on your web site. But that's perfectly fine. Once a prospect has read through your site, spent time educating themselves on your company, and reviewing your services, the button to schedule a consultation will be a natural next step.
You're Not as Unique as You Want to Believe (Sorry)
I addressed this in Managed Services in a Month and other places. Time and time again, I hear the argument that "every" client is unique. And our offering is unique. And so, we can never have a standardized offering.
But, of course, we've all figured it out. Yes, there's always some unique element. But you have certainly figured out a Cloud Five Pack offering and three-tiered price list by now. If not, re-read Managed Services in a Month and Cloud Services in a Month.
My point is simply that there is a role to be played by a standardized offering, and you will always need to add your consulting to every engagement.
What About Price Competition?
STOP worrying about price!
I wish I could scream this from the mountain tops.
Pick an item. Anything. Absolutely anything. Cars, houses, cameras, computers, cell phones, and even ball point pens. Anything you want to buy has a very large price range. And people who could afford the very expensive option often choose the lesser priced option. Similarly, people who can barely afford the lowest price option somehow figure out how to buy a more expensive choice.
Price is all about value - not dollars or pounds or Euros.
I have met many IT professionals that have a flat 50% markup on everything they sell. I applaud this. We always had a flat 25% markup. If you have a policy such as this, you find yourself selling products far above the "suggested" retail price. What you won't find is that clients run down to Best Buy. Instead, they either buy what you sell, or engage you in finding another alternative.
Remember: If you choose to compete on price, two things are always true:
1) You probably won't make money
2) YOU made this choice
The best thing you have going for yourself as a consultant is . . . consultation.
When you sell equipment, it should be business-class equipment with a three-year warranty. It should actually last three years. And your clients should know that you are committed to selling them the right solution. That often costs more. But in the long run, you can dramatically improve your clients' experience with the right equipment.
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In the next blog post, I'm going to lay out what it takes to build the kind of store I'm talking about.
Post comments and questions here. I'm happy to respond.
:-)
