Conversion Optimization

I am not an expert and havent done split A/B testing and have had limited success but have tried a few things which seem to work for me :

1) Added a trust mark : This can be something a SSL Seal or a guarantee.

2) Highlighted the call to action button - Orange seems to work well as a color. Also de-highlighted other buttons like Add to Wishlist so that the main call to action stands out.

3) Remove extra information from the Conversion page - Minimize possible actions. Earlier I had Facebook buttons, pinterest, twitter etc - now I have just three - Buy (Main Conversion button), Add to Wishlist (De-highlighted but just in case you want to come back later), Facebook like. The sizes and colors are in that priority

4) Speed - Did some tweaking suggested by Google for making the page faster(lot to do still). The assumption is that faster pages convert better.

5) Conversion steps : Reduced conversion steps from 8 to 5. Made Guest checkout the default option(We are a niche site so dont expect a lot of repeat find something and buy)

Do let me know if you know of some low cost ideas to improve Conversion

  

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Online Market Places

We are a small handicrafts manufacturing company and we primarily sell online. A good part of our sales come through our own website - www.kraftinn.com but we soon realised that as a brand, looking at your website alone is sometime not the best strategy. This is basically because of the following :

1) Costs : Setting up an online store is not very difficult nowadays. However getting good traffic is indeed a continuous and difficult task. This is where marketing comes in and whichever channel you choose be it Google ads or Facebook, cost of marketing is significant. Apart from that there are other transaction costs like Payment Gateway costs that are significantly high at small scale.

2) Brand : Each brand is unique and people connect to it in different ways and even though customers may love your brand, many are more accustomed to online purchases through the very large established online players like Amazon - this is due to a lot of different reasons from trust to customer service to purchase guarantees to robust feedback mechanisms.

Because of the above, we made a conscious decision to make our products available in well known marketplaces like Amazon.in and Ebay.in.

Some of the great advantages of the market place model are :

- If you got a great product, you just need to list it. There is no additional expenditure for marketing and commissions are paid only when a product is sold. This frees up marketing expenses that can be put back in the business for expansion.

- Good marketplaces reward you for good performance. This means if you ship on time and customers are happy with the product, you get good reviews, your products get better rank and this converts into better sales.

- Marketplaces have great followup mechanisms and analytics tools that can give you excellent insight into what your customers are looking for.

- The commissions that are charged are usually in line with the industry one operates in.

The only model that works for us in the marketplace model right now are ones that just connect the buyer with us for a reasonable commission - the ones that take care of the logistics or ask us to ship to them or ask for very high commissions don't work because the Indian Ecommerce market is a value market - where the customer has to be happy, the vendors have to be sustainable and inefficiencies have to be minimised. Thats all for today. Thanks for reading. 

Ecommerce Packages

Packaging is an important part of our job. 
Anjan, our Packaging expert is among other things, 25 years old, father of three, has the toothiest smile in the world, a painter, collects water hyacinth leaves during the weekend, lives by the highway, chews betel nut all the time and has been integral to the KraftInn journey

Best Practices for Selling on Ebay

When we first started selling online, we didnt start with a online website of our own. This was because it takes a lot if effort to actually build a website from scratch - the hosting, the technology, the SEO, the advertisements, the works. Also, we had very little idea about the challenges of selling online - the supply chain, the logistics, the inventory management, the customer service aspect of it. Ebay as a platform made perfect sense for us to launch our products online - apart from the fact that it was the biggest marketplace in India, the tight feedback system and inherent rewarding of good performance was a big draw. We have had a fairly reasonable experience with Ebay and we learnt quite a few small but important things along the way. Here are some of the important ones in case you are looking to sell on Ebay (especially India)

1) Feedback is Key : Good feedback is extremely important. Take that extra leap to get good feedback. Sometimes you may be at fault and sometimes you may run into an unreasonable customer - whatever the reason, try to get good feedback even if it means you lose money on one or two transactions

2) Ship fast : Ship as early as possible which is usually 1-2 days - the quicker you send it, the better it is. If you cant ship early due to inventory issues, think of de-listing such items

3) Good Photos : This is obvious - put up good, reliable photos. Dont zoom too much or make things seem larger than it is - the customer may buy the item but give you a bad feedback which is worse than not buying at all.

4) Good Description : One liners or very small descriptions are not very helpful. Customers want as much information as possible - about the item, size, material etc, especially since they cant really touch the product.

5) Over Communicate - Ebay sends notifications when an order is placed or shipped. However, if you send an email or call a customer, it is at worst an irritant and at best a customer who is assured and may come back for repeat customers.

6) Dont try to deal outside Ebay - There is an implicit trust that is set in the platform while setting up buyers with sellers. If you or the buyer breaks the trust and does the transaction outside, there is a good chance that one of you may not be happy and there would not be a neutral authority to sort it out.

7) If you make a mistake, admit it and correct it - e.g if the item is broken, talk to the customer and resend or refund the money.

8) Free Shipping - People hate to pay for shipping. Its a psychological thing - somebody needs to pay for the shipping and it has to be part of the cost but dont make it explicit and differentiate customers based on location.

Thats all for today. Do visit our Ebay store : http://stores.ebay.in/kraftinn

Comparison of Courier Companies in India

As a company with an ecommerce front end, we work with various partners and one important partner is the courier company. We have worked with various courier companies and just wanted to share some findings. Obviously, which courier company is the best is a subject of debate and may vary based on location, price flexibility, quality of service requirements and so on.

A quick snapshot based on our experience :

We send a lot of things to remote parts of the country and India Post has by far the best reach. The price is also reasonable. However, unlike other courier companies, they dont really do doorstep delivery - this may be because Postmen in India have cycles and the traditional idea was probably to delivery letters not packages. Whatever be the reason, this is kind of non-negotiable in Ecommerce. You cannot expect customers to come to the Post office to collect their packages, unless they are in really far flung areas.

We have had a good relationship with First Flight. They are extremely competitive in two areas - Accessible and ready to get your business. Every Ecommerce business is a customer who will give them consistent revenue - They seem to understand that. The price is pretty good too. However, the deliveries are not as consistent as we expected them to be- Even 5% non-deliveries or late deliveries can kill your ecommerce business and this is one area that needs to be improved.

Bluedart in our experience has been extremely consistent-yes, consistent is the word. When you do a ecommerce business, it is important for you to guarantee delivery at a particular date - it may be 3 days it may 7 days, but you should be able to set expectations to the customer and Blue dart is fairly consistent. If it has to go to location x, it will take Y days and most of the time, it works like that. Price is slightly on the higher side but then sometimes you are ready to pay a premium for a service well done.

We also worked a bit with Fedex. Though service quality is excellent, they still have a lot of differential pricing which is difficult to understand - Too much variable pricing or location based variables results it practical difficulties for ecommerce companies. You want to predict with good accuracy your logistics cost - it should not be a surprise.

Conclusion : Regardless of the type of business, I guess it makes sense to choose more than one and negotiate for price and flexibility over a period of time. Also, it will be great if the courier companies start thinking of Ecommerce companies as customers :) - Its a great revenue stream and we are ready to give consistent revenue to the ones who give us good value for our money. Help us when we are small and we will be loyal as we grow bigger, I guess. Afterall, Courier companies will probably be the biggest winners in Ecommerce

Packaging of Lamps

Packaging is an important part of our job.
Anjan, our Packaging expert is among other things, 25 years old, father of three, has the toothiest smile in the world, a painter, collects water hyacinth leaves during the weekend, lives by the highway, chews betel nut all the time and has been integral to the KraftInn journey

Top Ecommerce Websites in India

A quick reckoner for top Ecommerce Websites in India (not in any particular order)

General

Flipkart.com
Yebhi.com
Myntra.com
Jabong.com
HomeShop18.com
Indiatimes.com
Rediff.com
FutureBazaar.com
FashionAndYou.com
Fetise.com

MarketPlaces

Ebay.in
Snapdeal.com
Amazon.in
ShopClues.com
CraftsVilla.com

Aggregators

Naaptol.com
Junglee.com

Apparel/Fashion

Zovi.com
Freecultr.com
DonebyNone.com
Yepme.com
Zivame.com
Cilory.com
BagsKart.com
StiffCollar.com
BasicsLife.in
Bewakoof.com
Bluegape.com

Jewellery

juvalia.in
Caratlane.com
Bluestone.com
JewelsKart.com

Accessories

Lenskart.com
WatchKart.com

Health

HealthKart.com
Goodlife.com
NaturalMantra.com

Grocery

Bigbasket.com
Zopnow.com

Sports Goods

Playgroundonline.com
Sports365.in


HomeDecor

Zansaar.com
Fabfurnish.com
Urbanladder.com
KraftInn.com
HeavenandHome.com
BedBathandMore.com

Niche

Engrave.in

Baby Products

FirstCry.com
Babyone.com
Hushbabies.com

Ecommerce/Payments

Zepo.in
Martjack.com
Ebs.in
CCAvenue.com
BuildaBazaar.com
PayU.in

Inventory vs MarketPlace

'Inventory or Marketplace ?', this is one of the pertinent questions of our times in the context of ecommerce. While the inventory model means that the ecommerce site has to carry inventory of all products it sells, the marketplace model requires the ecommerce site to act as a exchange platform between buyers and sellers and it charges a commission. The upside of a inventory model is faster delivery times and a consistent customer experience while this also means higher inventory and supply chain costs. The marketplace model shift most of the inventory risks and costs to the sellers but it becomes a continuous challenge to manage seller and buyer expectation in a consistent and fair manner.

Though both models look like chalk and cheese, it is important to remember that that the basics are the same from a business model perspective :

1) Efficient Inventory Management - For a great customer experience, having just the right amount of inventory is very important. Nothing is as annoying as telling a customer after two weeks that his or her order cannot be serviced. For websites that carry inventory, this means 'sell what you have' while for marketplaces, it is manage sellers to create a structure where sellers who manage their inventory well are incentivised (this can be done using feedback systems)

2) Efficient Delivery - Getting orders delivered in reasonable time is important for ecommerce. While for inventory based models, this is about managing inventory efficiently, for marketplaces, this is about not overdoing checkpoints and reducing unnecessary logistics costs.

3) Customer Management - Though customer service is paramount, it is worthwhile to remember that there are segments of customers that are still not ready for Ecommerce. 

At KraftInn, we have had some experience in both models - We use the inventory model for our website -www.kraftinn.com while we participate in the marketplace model in marketplaces like Ebay as a seller.

As a seller, we feel it is important to get the right balance between seller satisfaction and customer satisfaction and there are certain things that marketplaces should not do. Here is a small list :

  There are three key stakeholders in a marketplace model and it is important to get the right balance between the three.

 No matter whether its the inventory model or the marketplace model, the ecommerce space is hyper competitive and the ones which get the right mix are the ones that will work. We are a very small player and this is just the beginning of an exciting journey :) 

Will the internet kill all large traditional businesses ?

The other day, I dropped by Coffee Day(indian coffee chain - startbucks equivalent). Adjacent to it was the well loved Crossword store and I clearly remember that there was a connecting glass door somewhere which let people who had come for coffee to stroll by and look up books and dvds and vice versa. I could see some books lying about but the place looked empty and the glass door seem to have vanished. So, I casually asked the Coffee day guy and he told me something to the effect that the place was shutting down. It was kind of a gentle shock for me and though I could hardly remember buying a book from Crossword, hanging about in bookshops has been one of the idle pleasures of urban life.Then it struck me, that though I dont read a lot these days, there was a time I spent a couple of thousand rupees on books every month and most of it was at Crosswords. In the last six months, that spend had got diverted to online stores like flipkart and in many cases I could just read for free - flipboard etc. I have no idea whether the store actually closed down due to business reasons or whether it was just a phase of temporary shutdown due to renovation etc but like in the US, book businesses everywhere seem to be facing major challenges and most if not all is due to the internet.

The internet is quite puzzling. Consider this :

1) Email is free - only a decade or so ago, people used to send telegrams and pay per word. Its weird that a service that is many many times faster and reliable is actually cheaper - well not just cheaper, free.

2) There was a time only 15 years ago, when we used to attend book festivals to buy editions of Enclyclopedia for thousands of rupees. Now you just get a million times of that content for free. Also, searching this mammoth knowledge base again is free.

3) Music is basically free. If you are a music lover with generic tastes like most of us, gaana.com gives you almost everything you need - For free.

In short, the internet has turned most industries on its head :

1) Book industry - Why would you buy a book if you can download it ? Traditional booksellers are just looking one way and that is down.

2) Music industry - It was only ten years ago that you could just walk along Planet M at Brigade Road, Bangalore and sample out music before buying. Now, its difficult to imagine people buying CDs

3) Post Office - The Indian Post office just stopped the telegraph service.

Which ones will be next ? The movie industry, the retail industry , enterprise software products.

All this obviously means that if someone is losing out, someone must be winning. So who should be the winners, obviously the internet companies - but if you look a bit closer at the internet companies, if you leave out the leaders, most are struggling to make money...Giving things free actually costs money, giving discounts actually cost money. The internet can be a democratic force giving the small guy a chance to compete but it has probably made the race so competitive that its a race towards the bottom and may kill a lot of industries in its run and maybe hurt itself on its way. The good part is you dont need a license to join the race.

Ecommerce Trends

There are various trends that are in vogue currently and as a very small company, it becomes very important to us in being extremely picky when it comes to prioritizing what we want to do. Here are some trends we are looking at very closely :

1) Videos : It is widely accepted that videos play an important role when it comes to search engine optimization. They are crawled and indexed easily though we have not been able to determine how it affects the number of queries. Creating a compelling video is hard work - no video is better than a patchy video. Videos also take significant bandwidth which means two things - 1) higher storage costs and 2) requires a good connection for the end user - it is possible that you may have a wonderful video and 90% of your customer base can't get your page to load properly because they have a slow connection. Our experience with video has been very mixed. There is no significant increase or decrease in product conversions due to videos. So we are taking it a bit slow when it comes to video - about 10% of our products have videos.

2) Mobile : Do we need a iPad add ? Do we need a iPhone or Android app? The answer at this moment for us is no. This is basically because there seems to be a lot of reluctance in india to use credit cards online so extending that, we believe that using them on a mobile app will be a bit more complicated - also payment gateway integration may not be seamless. The app strategy may be good in case of COD, but since we dont do COD, it looks like a lot of investment without returns at this point. Also with HTML5 and other things on the horizon, we believe the app thing may be a pasing fancy and a singular web based UI across device will start taking precedence in the future.

3) Google : Though we dont have a lot of insight into how Google works, it seems with the recent updates, Original content is becoming more and more important and the number of links especially bought links are kind of becoming less valuable. So, we have kind of stopped doing too much SEO jugglery and just put up good content when we have a new product. Traffic wise, our strategy hasnt worked very well, but at the moment we dont know of ingenous ways to build links and traffic from emails etc havent been very productive for us.

4) Social : Pinterest is not working for us in India - we get some repins etc from primarily US users, but dont seem people care much about pinterest much. Twitter brings in lot of instant traffic but cant seem to connect any conversions to twitter. We havent done much with linkedIn.Facebook is where we spend most of our social time. Our audience engagement has been pretty good and people usually respond well to smart and funny posts, pictures - e.g animals have good engagement. Our average is one post a day and anything more than two usually causes engagement rates to go down drastically. Social is great for brand building but from conversion perspective, it seems a bit overrated at this point. We may be wrong, but that has been our experience though getting accurate conversion data from facebook is very difficult.

5) Advertisement - We have an absolutely tiny budget for ads. The ROI is pretty poor but what you gotta do you gotta do. We do a little bit of google ads - only search and video, no banners. The conversion cost are very high and then some of them drop off during the payment. Video is primarily for branding - not sure if it is working - difficult to track. In Facebook, we primarily page post ads and spend about Rs 6-7 per like - Its not too bad but again it is more of a branding thing.

Hmm. Well thats all for today. If you have any ideas, do leave us some comments. Thanks for reading

Idli Profitability

In the times of ecommerce layoffs, people have started talking about something called as 'Idli Profitability'. Apparently, it is a take on 'Ramen Profitability' coined by Paul Graham and supposed to be a state where a company is supposed to generate enough money so that it can take care of its basic expenses like employee salaries and sustain the founders. For a layman unaware of the crazy ride that ecommerce in india has become, it may be somewhat puzzling why this is even a question - every business should be do that - able to manage its expenses that is. However, Ecommerce in India is like big investment pot and too tempting for large investors to ignore even if most ecommerce websites even after 3-4 years have not even become 'idli profitable'.

Profitability is a big challenge and here's why :

1) Traffic is seldom created by brand value but often bought by advertisements. This broadly means generating traffic mostly by ads in Google(search, banner) and Facebook(mostly banner). An average  click using an advertisement is roughly 10 Rupees(take a few rupees here and there). 50 clicks generate a sale. Do the math. Typically you end up spending 500 Rs for a sale (say average - 1500 Rupees). So 25% of your revenue will go as ad spend (considering you are able to generate 20% sales without ads). If you are mature ecommerce company, this percentage maybe lower but you may have probably burnt more money on TVads or in getting where you are.

2) If you manage your own inventory, you have to pay logistics - this will be 10%-20%. If you do third party courier companies or manage your own logistics - I guess it doesn't matter much because in one case it is higher operational cost and in the other, it is more capital expenditure but in the end it  a sigificant chunk. If you are a managed marketplace, you probably dont have to worry about
logistics but typically the commission is 15-20%.

Then there are discounts and returns on COD  etc. Even if you ignore them, here is what you end up with:

For every 100 Rs of business,

Inventory model : Money left :=100-40 (conservative estimate of 25 rupees of ads and 15 rupees of logistics) Typically it is difficult to sell an item at double the factory price so lets assume Cost of Goods as 60 Rs (in case of books it is reasonable to sell a 60 Rs book(from publisher) at 100 Rs after 10 percent discount to a customer but in other like electronics it may be a tricky affair). So essentially you are left with Rs 0 to pay for your salaries (100-40-60).


MarketPlace model : Lets assume the comission charges as 15%. This means you end up with 15 Rupees for every 100 Rupees sale. So Money left := 15-25(ads cost). So ou are left with -10 Rs for your salaries.

It is not hard to see why profitablity or even idli profitability is difficult if not impossible in such a scenario. There are obviously going to be exceptions who will reduce these costs either because of brand name or land grab but for majority of ecommerce players, its gonna be a long chase towards profitability.

As a company with an Ecommerce front end, we face the same challenges and we are just about 10 percentage points away from idli profitability - sad but true. However, we have taken some hard decisions and said no to significant percentage of sales by adopting a NO COD and No discounts policy. We dont have a wherewithal to do a lang grab neither do we have a big marketing spend. We are trying to get around these by optimizing our manufacturing process, hoping ad costs go down in the long run and we are able to build a brand slowly. If I had to take a wild guess about who would win the ecommerce race, I would bet my money (theoretically - not that i have any :) ) on courier companies

Discounts and ECommerce

A lady called us yesterday and asked for discounts. We asked her if she was interested in any particular product and she said that she hadn't made up her mind but was wondering if there were any discounts. This is a common happening for us - every other day we get inquiries for discounts. We had toyed with the idea about discounts quite a few times and had done some experimentation around it. Unlike most other ecommerce retailers, we also manufacture or handcraft our own products in house. Following were some of the things that came into our mind.

1) Discount in the Overall Price : Suppose a product has been priced at 100 Rs and we give a discount of 20%, the price becomes 80 Rs. Why not give it at 80 Rs itself ?

2) Standard Price : There are some items that have an MRP : example a book or a phone. When a discount is given, it is valuable for the customer. But for niche items like lamps, there is no way for the customer to know the actual price, So it is possible for some vendors to just hike up the price by 50% and then give a discount of 20%

3) Marketing Ploy : Indians love discounts and it is usually a great marketing ploy. However, consider the high customer acquisition costs, we think it is more important to get the trust of a customer for repeat purchases or referrals than trick him or her for a quick sale.

Based on the above, we have decided on a no discount policy for single purchases. Its been a tough one and once in a while, we may re-look at things like seasonal or inventory based discounts, but we would rather give a very low price than a hiked price with a discount. Lets see how it goes

Moving our E commerce cart to Amazon Web Services

We are a small company with our basic foundations in handicrafts and small scale manufacturing. We launched our eCommerce store a year ago and it has been a learning experience. Though we started our online sales with Ebay and other market places, we realized that having our own store would give us good value in terms of control, branding, pricing, customer acquisition and last but not the least some independence. The online market is quite fluid and its kind of good to spread your eggs in different baskets. Putting up an ecommerce store in India has its own hassles, primary among them is the payment gateway setup with individual banks giving their approval before they appear in our list of payment options.

For our DNS and Hosting, we chose Godaddy initially which is a pretty good place to start with in terms of ease and cost. They have different types of hosting options available :

1) Dedicated Hosting : You have your own server and you can put what you want. This is pretty expensive so obviously we could not afford it.

2) VPS : This is primarily shared hosting with a dedicated RAM and CPU reserved.

3) Shared Hosting : This is the cheapest and you share a server with multiple other websites.

Based on our limited resources, we thought it would be wise to use Shared Hosting and see where it goes and upgrade as necessary. It is pretty cheap and for the first few months, it was just amazing value for the money we spent. However, shared hosting has its share of limitations, some of them pretty difficult to get by - for one, you dont know how many websites share your server and what kind of loads they have. Secondly since the CPU and memory is shared, you may get a big chunk of it or none. Then one bad website can bring many others down. All in all, it is a good option to start or experiment with but it does not cut it for good professional websites.

At this point in time, we looked at if we could go towards a larger infrastructure, VPS or maybe dedicated. Our traffic is still pretty low compared to high traffic sites, so putting in a lot o money for traffic we would not  get rightaway seemed a bit excessive. Also, we didnt want to change our infrastructure every six months just to scale based on our traffic.

That's where Amazon Web Services came in. We had heard too many good things about Amazon and since we are very small company with technology enablement being only a part of our overall spend, we were kind of wary about the costs. Amazon has a significantly different model than the others - it provides different types of units for compute, storage, load balancing and other tasks as opposed to a monolithic server infrastructure by other hosts. This was both bad and good - bad because each unit had to estimated for cost separately and math can be a bit difficult to predict ; good because you can just start with the very least and scale as you go up. The key was that Amazon provided the opportunity to scale as we grow with very little change in architecture or infrastructure - which seemed quite difficult earlier.

Doing things in AWS can be a bit daunting if you are used to the tools that Godaddy provides where you can just ftp files and run scripts through a UI and you are pretty much done. However this is what we did :

1) Database : Ours is a mySQL database. Migrating the database was pretty easy. Amazon has a service called RDS. We basically did these steps :

a) start a new RDS mySQL instance with user names, passwords of choice.
b) Godaddy has tool for managing mySQL - myPhpAdmin. Click the export button and you get a dump of the table metadata and data.
c) The next step is to use a tool from your desktop (may something like myPHPAdmin) I think we used mySQLworkbench to connect to the RDS instance and dump our data in the new RDS instance.

Databases as we understand can be vertically scaled to a point - increase the storage in the instance. Horizontally, it is much trickier. Replication may be the way. However, at this point, we dont see our database to be too large - we are a niche store with a small catalog of products. So that's that.

2) PHP Server : Our is a PHP application (which ecommerce cart isn't - alright there are some but you get the drift). For our server, we did the following :

a) We initiated a Amazon EC2 instance. This is like a small empty box somewhere out there in the wild. We had to install two things for our cart to run - 1) apache web server - httpd basically 2) php.
b) Next was to transfer the application files. A good tool to do this is Filezilla
c) Using Filezilla, we transferred the application files to /var/www/html folder.
d) Make appropriate changes to database names, passwords and other configuration items as necessary
e) One handy tool to connect to your EC2 instance is Putty. Using this you can connect and run commands. For our website to start, we had to start our apache instance.
f) The last part is having a load balancer. We created a load balancer using the Amazon ELB service and pointed it our Amazon EC2 instance. This part is really cool as now our application can be easily horizontally scaled. This means we can create a new image of our EC2 instance and create new instances and attach them to our load balancer. One tricky part in this is syncing things like your images folder that needs to be somewhat persistent - you can probably do a NFS mount to share the folder from your master instance or run a job to sync it across servers - a good interesting thing to solve in case of lots of servers but I will leave it at that.


3) DNS : We didnt find any reason to change our DNS. Amazon Route 53 looks to be awesome but we stuck with Godaddy here. Setting up the DNS pointing them to Amazon is a breeze too. All we did was point the DNS records to our load balancer. Our new site was on Amazon.

Everything looks good right now. In short, we just think Amazon may be chose the wrong name - they should have called themselves Amazing.