QUESTION on How to Sell via an Online Mall
My mother signed up with an internet mall. She owns four mall area codes. They are now offering her a chance to be among the top 100 websites when certain keywords are entered onto the Google search engine because they have made a contract with Google. However, she must pay them a large sum of money to gain anything from this, so, basically she will be buying advertisement, right? The man on the phone gave us these averaged numbers numbers: 350,000 people will look at her site, 7% will buy something, $25 will be the average purchase, and some other percentages I have misplaced now. My questions are, are these figures realistic, how do people usually get put onto search engines, and do people usually buy from internet malls or from the internet store itself? If there are any other complications you can see that I cannot, please tell me.
– Gabriel, MD
ANSWER by Nach Maravilla
You mentioned that one of the sales pitches of this online mall is that they will give your mother “a chance to be among the top 100 websites when certain keywords are entered onto the Google search engine because they have made a contract with Google.”
There are two different types of search engine results: the natural search and the paid search listings. With Google, placement at the top or any part of their natural search results listings cannot be bought. They take pride in ensuring that only the most relevant and most qualified sites are at the top of the listings for whatever keyword, and placement is determined by a complicated algorithm known only to Google. Do not listen to anyone who tells you that they GUARANTEE top listing for you in this area because they made a “contract with Google.”
You can, however, buy placement in their paid search engine listings and you were right to think that the company’s offer to you is basically advertising. When you do a search at Google, the listings under the label “SPONSORED LINKS” are paid advertising. This is called Google Adwords and you can read more about it at http://www.google.com/adswords . Read the Quick Tour to learn more about the Adwords program
With Adwords, you bid on certain keywords and the price you set will determine your placement in the paid search results for your keyword. The higher the price you set, the higher the chance that your ad will be shown at the top. You will pay based on the number of clicks that your ad received. Depending on the competition for certain keywords, it can be as low as $0.05 to as high as $100 per click or even more .
For example, you set a price of $0.50 per click and your ad attracted 350,000 (the number of visitors quoted by the company) essentially you will be paying $175,000. If the keyword is cheaper and you pay only $0.05 per click, then you pay $17,500 still a substantial amount of money.
So how many visitors can an ad placement give you? Google does not give figures as to the popularity of keywords or the number of times a keyword is searched on. But Overture, the pioneer of paid search engines (Yahoo uses their paid search results) has a tool that can give you a rough estimate of how many people search on particular keywords. Simply enter the keyword in the box (How many searches can your business get?) at http://www.content.overture.com/d/USm/ays /.
From their presentation, it appears that you will pay the money and they will manage the entire advertising for you. Check how much of the money they quoted to you will go to advertising directly, and what percentage will be their fees for managing the advertising process.
The benefit of selling in an online shopping mall vis-a-vis creating your own Web presence is the benefit of being in a well-trafficked place. The online mall will make sure that it attracts visitors that can go to your “rented space” in the mall. Many online malls also act as your server, with some even maintain, design, promote, advertise your site and process customer payments. Fees are often based on the services you use or gross sales, or a combination of both. Your role as the store owner would be to provide customer service and order fulfillment.
If you intend to sell on this particular mall, think of the following questions:
What is the traffic level of that particular mall? Are people actually going to that online mall to shop? Ask them for their traffic numbers. Can they actually guarantee that they can bring users to your site? One way to get an indication of how much traffic this online mall gets in a month is to use Alexa at http://www.alexa.com and search for the URL of the online mall (don’t look at Alexa’s traffic numbers as accurate, but consider it as a guage).
How do they promote the online mall? Check what their marketing strategies are to get the online mall more well known to potential buyers. Ask how much advertising they do to attract visitors to their site. Do they promote only the mall, or do they also promote their sellers?
Who are currently in the online mall and what do they offer? If the member sites of the mall are predominantly selling baby items and you are selling high-end bike parts, the malls primary clientele may not be your target market. Plus, how many other member sites in the mall are offering the same product (your competition) as you plan to sell?
How will buyers find you in the online shopping mall? Do they have a search engine? Do they list down the member sites? Is there a fee for getting listed?
What are your exit strategies? If at some point you decide to venture on your own and leave the shopping mall, can you actually operate your site independently of them or will you rebuild your entire site from scratch?
There are also so called online malls whose main business is to sell slots or store spaces at very exorbitant prices. They lure you to join them and sell at their online malls but their real purpose is for you to buy the slots and then later on tell you to resell that slot for a profit. Then, if you operate an online store on that space, they will charge you all kinds of fees, even if you just want make a little change, for example, to change pictures of your merchandise or text descriptions. To know more about this type of malls, you can read my article: http://www.powerhomebiz.com/vol74/milkyway.htm This article is an eye opener.
Hope this info will be of help.
Nach M Maravilla
Recommended Books on How To Selling Online:
- Choosing What to Sell Online: A 4-Point Formula for Profitable Product Selection
- A Quick Start Guide to Online Selling: How to Sell Your Product on e-bay, Amazon, i-tunes and Other Online Market Places (New Tools for Busine)
- Top Selling Products To Sell Online: High-Value Business Ideas For The Newbie Online Marketer with Sales Tips On Top Products To Buy And Sell Online So You Can Make Money Fast
- Selling Online 2.0: Migrating from eBay to Amazon, craigslist, and Your Own E-Commerce Website
Article originally published July 2003. Updated on January 22, 2012