Thinking about expanding your business to the Online Auction world.  Not quite sure if it is the right step for your business.  Or more importantly, will it even work.  There are things to consider that will help make the decision easier and make good business sense.

 The Internet is not going away.  In fact, Internet shopping is growing as fuel prices climb, people’s life becomes busier and work schedules simply do not coincide with retailer’s hours.  The Internet is open for business 24/7.  Buyers can shop from the convenience of their home, dressed however they want, in the middle of the night, if they so choose.  More and more retailers are realizing the benefits and necessity of expanding their business to the worldwide marketplace.  And Online Auctions is a logical step. 

Building an e-Commerce website is more often than not expensive.  Marketing that website can be even more costly.  The Online Auctions marketplace affords the best return on investment in terms of advertising exposure and return on cost of goods sold.  The Online Auction marketplace advertises for you driving traffic to that particular Auction venue.  The advertising is usually at the very least Nationwide and normally incorporates more than one form of advertising media.  Few retailers advertising budgets are large enough to launch the type of ad campaigns provided by the Online Auction venue. Nor do the smaller merchants ad campaigns go Nationwide or Global. 

 Every business, which has inventory to sell, always finds they are in the position of having end of season product that didn’t sell.  Out dated inventory and excessive inventory present the same challenges.  What do you do with it to gain at least some return?  Packing it up until next season isn’t always a viable option as next season, it will probably be out of style. Online Auctions often provides the best solution. Retailers frequently find the selling price in the Online Auction venue is most usually more than the clearance bin would have fetched for the item.  Customers know to “wait the retailer out” until the product is reduced in price. When the product is simply removed from the retail sales and offered online, retail sales often increase, as customers are afraid that special something they want will be gone instead of marked down. 

Although, there are always challenges to any expansion venture, retailers do have certain advantages.  Packaging materials are more readily available as incoming product is always packed.  So packaging materials can be reused.  Retailers already have fixed overhead costs such as labor, utilities and rent to name a few so the retailer does not suffer the same business expenses “shell shock” as do the start up home-based businesses.  Adding packaging of product sold on the Internet or listing auctions will turn unproductive staff time into productive time.  And more often than not, the staff genuinely enjoys the task. 

Most businesses already own the basic equipment necessary to run Auctions.  A computer, digital camera and Internet connection, preferably DSL, cable or fiber optic is absolutely necessary to even begin running auctions.  Auction management software, FTP image hosting and online payment service will help the Auction business run more smoothly and cost effectively.    

Many times retail business owners are concerned the Auction sell- through rate will be inadequate.  Think about is this way.  If your particular sell-through rate Online is 30 percent, do you sell 30 percent of everything offered for sale in your particular retail store on any given day or week. The answer is rarely yes.  If we sold 30 or 40 or even 20 percent of every product line we offered in our stores, the lines at our cash registers would be extremely long.  The truth is, our sell through rate in our bricks and mortar stores is generally much lower.  Not to mention shrinkage due to theft and package defacement. 

 Expanding your retail business to online auctions will increase your customer base and increase your bottom line while decreasing losses due to shrinkage and unsold product. Going online, is just a good business decision.