6 Ways to Confront Internet Selling
Options for integrators against the Internet include reducing price, creating 'install prices,' letting clients buy online and charging handling/testing/programming fees, or simply dumping the client.
The Internet is the bane of URC’s selling team, yet it’s fertile soil for marketers and shoppers. Putting strategies in place to handle the eventual pricing resistance from some prospects is a wise and necessary step (for both manufacturers and integrators).
Shoppers spent much more money online in 2011 than in 2010, and that trend will most certainly continue. Numerous sources of data clearly show the sharp rise in purchasing from online sellers; those of us in the trenches all understand this to be a reality.
While online shopping continues to become more convenient, it’s even more convenient for consumers to use as a research tool. As we all know, this research can prove unreliable and outright frustrating for dealers. Your customers are using the internet as a tool to check your credentials, confirm the brands you’re specifying and, worst of all, check your pricing. Your customers seek instant information gratification. We have essentially migrated to a “Point and Know” era of instant information.
Think “Point and Know” is just a problem for you, the custom installer? Think again! According to Automotive News, Honda late last year issued an ultimatum to its dealers: Stop selling cars below invoice price through websites such as TrueCar.com, or lose the per-car marketing spiffs from the factory. As you may know, these spiffs are an important source of funds for dealers.
The problem gets even worse when considering unauthorized resellers and online counterfeits. Last May, eBay announced an initiative with Louis Vuitton, Burberry, Microsoft and even Proctor & Gamble to address the rapidly growing problem of counterfeit products being sold online at tremendous discounts, which as we all know significantly reduces the value of legitimate goods while having an adverse impact on retailers.
Honda, Burberry, Proctor & Gamble: If these companies are having a tough time addressing online “underpricing” and “undervaluing,” it should be no surprise that companies in our own little world of custom integration are struggling with it too. A consumer can find virtually any brand he wants online, and if he hunts enough he can find a discounted price. There’s no easy answer to this problem, though all of us fight this battle every day.
Manufacturers Set Policies
Most brands have very clear policies that prohibit online sales. URC has one for all of its dealers and distributors (we do have a separate agreement for a small handful of online resellers, with very strict policies that govern their right to sell online). Our “one strike” clause is pretty clear and simple: If we catch you selling one of our products online, we will cut you off.
One solution for URC is to make a buy online from an unauthorized source, trace the serial number to the company we originally shipped it to, and cut them off. Lars Granoe, URC’s vice president of sales, calls this the “Whack-a-Mole” game. Remember that arcade game? You get a big stick and smack moles as they pop out of holes, and every time you hit one, another pops up. That’s exactly what fighting unauthorized online sales is like.
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