The Year of Problems
2011 has been a very interesting year so far. The number of fraudulent orders is up, we get phone calls daily asking us to match the price of other online stores, returns have doubled and complaints about quality or item size have gone up. We are facing a new issue with our suppliers sending the wrong items, running out of stock (without notice) or delaying shipments, causing stress for us and our customers. It has made for some very frustrating days here.
I talked about fraud in a previous blog post so I don’t really need to go over that again. I can tell you that we now spend a lot more time on each order verifying our customer’s information. This has helped with prevention but we have still seen a few more chargebacks. Luckily a couple of them were just misunderstandings (father of bride didn’t realize daughter was using his credit card, etc.)
We get phone calls daily from customers trying to get the best price they can find. I really don’t blame them; I understand we are all trying to pinch pennies where we can. Unfortunately we are turning away more and more of these price match requests. We don’t even offer a lowest price guarantee or price match guarantee and yet we are still getting phone calls and emails asking us if we can give a lower price. So many other vendors are offering items at pennies above wholesale with site designs that lack contact information and have poor navigation. I have had to turn these requests down because I can’t compete with pennies above wholesale.
I am shocked at how many returns we have had this year. I’ve been trying to figure out why this is and so far I don’t see a specific pattern. The returns are so varied and the reason for the returns range from, items smaller than expected, quality isn’t as expected or the customer just changed their mind and wants a different item. All of these reasons are acceptable, but instead of 1-2 returns a month we are seeing 1-2 a week. To top it off some of our suppliers charge a restocking fee that ranges from 10% - 20%. This really eats into our bottom line each month. Our customers certainly don’t understand why they have to pay a restocking fee, and something new this year, they want us to pay for the return shipping. I know larger companies do offer this service but we can’t afford to refund original shipping charges AND pay to have the items sent back.
This year has been the worst as far as dealing with our suppliers. We drop ship most of our items so issues with suppliers can sometimes be inevitable. Luckily most of our suppliers are wonderful; sadly one particular supplier this year has caused us many headaches and worse, caused us to lose money and customers. I have talked with them many times about issues we are having but I am not seeing any improvement. As much as I don’t want to lose this supplier (their items are very popular), I may be forced to due to their lack of organization.
I’m sorry if this blog post seems like one big complaint. The truth is lately I feel like all I do is sit at my computer and try to fix emergencies. Every time the phone rings I cringe a little, take a deep breath and smile as I answer hoping whatever it is, I can fix it. Right now I think I am feeling “burn-out” for the first time since we started this business. By the time I end my day I’m exhausted from all the stress. Dealing with an angry customer is always hard, but harder for me is disappointing my customers. When they call and they received the wrong items, I take it personally. If I have to call a bride and tell her that her items will not arrive by her wedding date due to a supplier delay I feel horrible. I don’t want to run a business that disappoints and upsets people, I want to run a business that fills a need and makes customers happy.
I am taking some time off soon in hopes that will help with this burn-out that I have been feeling lately. I think that breaking ties with the supplier that causes so many problems will also help.
If any of you have gone through this I would love to hear how you handled it. Maybe that too would help me to see a light at the end of the tunnel.
I had the same things happening. The stress and frustration was killing me. I was lowering pricing thinking I could get that last order but all I got was more and more frustration.
A very smart person said raise your prices. At first I thought he was crazy but I had to change the way I was doing business. To my surprise it worked. I mean really work well. Yes the number of order went down but the bottom line profits went up. It was clear that the people that had all the problems where the same ones trying to buy thing cheap. Also dumped the bad suppliers and over time found new suppliers that understand what it means to offer good service.
My advice is to start trying different things. You will never make it trying to compete with the low price guys. You need to get back to the days when you looked forward to answering the phone and adding value to your products.
Louis Camassa says:
Hi Kara-can certainly empathize where you are coming from! The post above has some good advice. What I've found that helps when dealing with multiple mission critical problems is to write down each problem, and then develop multiple different solutions for each one.
For example, with your pricing-one solution would be to raise prices like radiantman suggests, another would be to offer different services that offset your higher costs, e.g. free shipping, free returns, yet another would be to try and match your competitors prices by negotiating better deals with your suppliers, etc...
I've learned that identifying, listing out, then committing to finding solutions to problems helps to create some relief, and ultimately, gets the problems resolved!
Keep working at it, you will get through this!
When you run your own small business the buck stops with you. So you end up dealing with all the problems. I get a bit burned out by the end of our busy season, but usually find that, in retrospect, a lot of my hand-wringing was unnecessary. When I have time to step back and evaluate I find that nothing was quite as bad as it seemed in the heat of the moment.
Derek Bacharach says:
Hang in there, Kara. It's hard not to personalize when problems start to snowball. I'm in the middle of a rolling snowball right now (expecting something to go wrong each day now). I've noticed I can handle multiple problems when sales keep coming in (like before Easter) but not when there's hardly a drip in sales (like now). Having someone else to bounce off what you're going through helps, especially a significant other who can edit emails before you reply back to irate customers!
Kara English says:
Thank you everyone for your support and your suggestions.
radiantman: I did raise our prices last year, and I am now looking over our site to see if I need to raise them again, thank you so much for the suggestion. I haven't dumped the bad supplier yet but I am moving their products to the bottom of pages and I am no longer promoting their items. I think this should help a little.
Louis Camassa: thank you for your advice. I am looking into other options (like the free shipping/returns). Just like you suggested I am making a list and I am going to tackle each issue individually. This has helped me to not feel so overwhelmed by the problems. Looking at the list is helping me to re-focus.
xcskiman: thank you for your comments. You're right, after I wrote down each individual problem it doesn't look as bad as before. I think I can get through this, I just needed to step back and breathe - thank you.
Derek Bacharach: The "rolling snowball" is a great why to describe how I am feeling. Luckily I have a wonderful business partner (she also happens to be my Mom). She really helps me get through the bad days and collect my thoughts before blowing my top. I don't know if I could have made it this far without her.
I really do appreciate the support from everyone at Practical Ecommerce. It's easy to feel secluded when running an ecommerce business, knowing there are others out there going through the same thing really does help.