Flea markets aren’t as popular as they used to be (thanks in part to eBay), but they are a great place to find all sorts of items. Online though, as a small to medium sized merchant, it can be tough to be a “virtual flea market”. It can also be dangerous to the power of your brand name…

It’s competitive out there

The online ecommerce arena is full of competition. You can almost always find someone selling your items for less, or offering more selection. It can be quite tempting to offer drop-ship products or carry non-related merchandise to expand your product line and reach a wider base.

Sometimes this makes sense. Many times it can spell disaster.

Dilution is NOT the Solution

Your brand name carries with it an image in your customers’ eyes. When they think of your company, they have an idea of what you offer (hopefully) and where you fit in the grid of “their needs and wants”. This is a good thing, as it helps you compete with the bigger retailers out there.

However, if you start offering chainsaws and lilacs for sale (but you’re a shoe company), that brand name becomes diluted. Your visitors and customers are now confused as to what your primary focus is. They do not have a clear image of your company.

Translation: Dilute your brand too much, and people will not think of you when they have a specific want or need. That is a BAD thing.

Think vertical, not horizontal

A great way to compete and succeed as on online merchant is to be a leader in your niche.  This means choosing a segment of the market (shoes for large footed individuals, rare flower seeds, vintage wooden tennis rackets, etc…) that is somewhat narrow, and offering the best items, service, or range of widgets in that category. This allows your business to compete (and many times beat) the larger, more broad online e-tailers.

The depth of your product line or service offering *within* your niche is what makes you an outstanding merchant. It’s not how many different non-related (i.e. horizontal) items you have that counts. It’s how many items or the level of your expertise in your field that matters.

Amazon and eBay are just better at it

It’s near impossible to go up against the Goliaths of the ecommerce world and try to beat them at their own game. They have deeper pcokets, more resources, and better connections. Don’t try to offer everything under the sun like these companies.

Focus on what you’re good at

For us,this means being the best small to medium sized business web host we can be (sounds so cliche, I know). However, it does give us focus. We do not cater to the hobby hosting market. We run Linux servers, so no Microsoft hosting. We specialize in ecommerce hosting (especially ShopSite ®). This helps us stand out in the crowded, ultra competitive hosting market.

Apply this focus to your online store.

Drop ship selectively

If you can find products that compliment your existing ones (i.e. cross-sell / up-sell that make sense), then adding drop ship items to your online store can be a huge plus. But only do this when it adds to your value/niche offering. Do not pollute your brand and site with nonsensical products that do not jive with your image.

Dell is excellent at this technique. I recently bought a new laptop, and I added a wireless mouse from Logitech. The non-Dell product was a perfect fit for my new purchase. It made my shopping experience better.

That is the goal for your store – Your complimentary products should make sense, and enhance a shopper’s experience. Make that your focus when evaluating new product lines or drop ship offerings.

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