eCommerce Mistakes Over The Years

This is a reprint of an article I wrote for The Net Effect.

We all make mistakes. Whether it’s because we’re beginners who don’t know any better or we’re experienced storeowners having a “dumb moment” – it happens to everyone.

Of course you always learn from your mistakes but isn’t it so much better to learn from others so you don’t have to suffer the stress and/or profit loss to gain the knowledge? Absolutely. So here are my big eCommerce mistakes – we’ll start simple and go from there.

Some of these really are like duh… if you’ve made any of the same you can laugh along with me if you haven’t you can go right ahead and laugh at me while making a mental note not to do it yourself.

Whoops #1

The first order I ever received was paid through PayPal. It was simple; I got the order notification followed almost immediately by the PayPal payment receipt. It was awesome; I was on top of the world! Previous to store ownership I had sold on eBay and everyone paid me through PayPal, it worked the same way.

The second order was paid via credit card and so was authorized for the order amount… but not automatically charged. Since I had never had a merchant account or payment gateway and in all my store building excitement I set them up but didn’t bother to learn anything about them, I didn’t realize I had to charge the card myself.

I lost $200 on that sale and only realized it when I went to look in the backend to figure out how to do a refund.  I noticed it hadn’t been charged and the authorization had run out two days before.

Lesson learned, be sure you know how your gateway works or you may not be charging for your products.

Whoops #2

About eight months into the life of A2 Armory I got an email from one of my vendors about a new Braveheart Replica Sword they just started carrying. The price was low and the sword was hot! I immediately added it to the store, created an eye-catching ad for the home page, sent out a newsletter, and put a banner ad on a bunch of ezine type sites (they were still worth something then) – all without considering how many other stores were doing the same thing or the stock my vendor had.

I was able to fill two orders, the rest turned into irate customers who didn’t want to wait six weeks for the next shipment. Not fun.

Lesson learned, always check stock before running a big promotion.

Whoops #3

Finding a new vendor is exciting… all the new products and sales possibilities always put a smile on my face. But I don’t let myself get caught up and forget to make sure I know the vendor’s policies.

I once found a vendor with an awesome line of daggers and swords. I read all their sales literature and it seemed straightforward and acceptable. I added a bunch of their products to my site and since it was well-established orders for the new products started coming in right away. So far the new product line was performing exactly as planned.

I placed the first few orders and received an email from the vendor saying, “None of the orders placed meet the minimum order requirement for drop shipping and so would all be cancelled.”

Wait, what?

So I get on the phone, fighting to keep my cool, to find out what is going on. Apparently the sales literature was incorrect and the drop ship minimum is $100. Each of the items I’d added cost me less than $40 – I couldn’t sell their products unless I packaged them together. All the yelling was for naught, they wouldn’t budge. So I ended up cancelling the orders and dealing with disappointed customers.

Lesson learned, don’t assume anything about your vendor or their policies. Double check everything – at worst you spend a little extra time on the phone, at best you save yourself hassle and upset customers.

Whoops #4

A customer calls wondering what the charge from A2 Armory is on their credit card. I tell them who we are and what we sell and the customer says okay, he doesn’t remember ordering anything but he would sort it out. I say to please let me know if he has any more questions or needs more info about the order.

A few days later I receive a chargeback in the mail describing the order as fraudulent. I have no record of my phone call to send to the credit card company and the package has already shipped. The best I can do is refute the chargeback with my AVS information and the shipment tracking number, usually not enough for this type of chargeback.

I call the customer and get no response, same when I email. I ask that he please either refuse delivery or send the package back so I at least get the product back. I follow up my original chargeback case with a letter explaining that the product had already shipped and the customer was not responding to my emails for it to be returned, hoping they would see that something was amiss. No good, judgment in his favor and I never heard from him again.

Lesson learned, handle all customer issues yourself. Don’t rely on your customer to fix it, do the right thing, or even understand what’s going on. Once you relinquish control it’s hard to get it back again.

Whoops #5

There are problem customers who argue about restocking fees and return shipping then there are problem customers who threaten and/or waste huge amounts of your time.

I once had a customer who I’ll call Logan who fit into the second group. His first order from me was for a full armor breastplate and spaulders. He wrote me an email to tell me how excited he was to be getting his first real piece of armor and how he couldn’t wait to wear it, etc. It was nice – I like getting customer feedback.

After he received it I got another email. This one extremely hostile in tone saying the armor had cut him and was unsafe and if I didn’t take it back for a full refund I was going to be hearing from his lawyer. Whoa. I wrote back asking how he had put it on. After all the armor wasn’t sharp and if it was worn over something (as it is supposed to be) it would be very hard to cut yourself with. The response was more threats so I refunded him and paid for the armor to be returned.

A month later I got another order from Logan. It was for a sword and it was followed by an email asking if the blade was sharpened. I responded saying, “No, the blade is not sharpened but could still be considered sharp. Was he sure he wanted it.” The answer was yes, he was thrilled about the sword, he went on to say how beautiful it was and he was going to use it for display. Okay… I sent it.

Another nasty email asking if I knew what the word sharp meant. Once again my product was too dangerous and if I didn’t pay for it to be returned I was going to be in big trouble. I sent a semi-terse email back suggesting that Logan was handling the sword incorrectly and I would pay for the return again but he was no longer allowed to order from A2 Armory.

The next month Logan ordered again. This time he didn’t even get the chance to send an email about how excited he was. I cancelled his order immediately. He still tries to place orders from time to time but they are never filled.

Lesson learned, don’t deal with these problem customers – cut them off at the knees, they will only waste your time and money.

Whoops #6

A couple months after the Armory started to produce a steady income I decided to open a second store. I brainstormed, did a bunch of keyword research, and found a few drop shippers. I ultimately decided to open a store selling a line of dishware. I was meticulous about all the demand research I did and went in full force to build the store.

I had gotten everything in place – all my products, the site design, the merchant account, etc and it was ready to go. I started promoting it through paid ads and went to work getting it to rank in the natural search listings. In total I spent about two months dedicated to this store… all without looking closely enough at the supply side of the equation.

That was a major mistake. Ranking for every term related to my product line and bidding on the top spot in all the paid listings was my drop shipper. Their retail prices were too low for me to compete with, in some cases even lower than I could buy the items for.

They were unsympathetic when I called about it, saying their prices would not change. It was suggested that I concentrate on other ways of marketing like mail order or print ads and not try to compete with them. Yeah, okay, that’s ridiculous and I just wasted two months of work for absolutely nothing.

Lesson learned, do not neglect to research supply. Demand can be huge but if you can’t compete with other suppliers it won’t do you any good.

Learn from my mistakes, these are all big time and money wasters that will frustrate you and impede your forward progress.

The Customer is NOT Always Right

“The customer is always right.”

Yes yes, we storeowners already know that is rarely the case but we pretend they are anyway because it’s what we’ve always been taught. Businesses are supposed to meet all their customers’ demands… no matter how ridiculous.

Well I say no!

I rely on my customers to make my business possible. I care about their gripes and listen to their requests but when a customer mistreats my employees or starts to cost my business money, I draw the line.

Most issues are perfectly legitimate and most customers are fair about them; ie. if a product arrives damaged they don’t automatically assume you shipped it that way and fly off the handle.

There are going to be problems from time to time, that’s just the natural order of the universe. You’re even going to screw up a few times, no one is perfect. You just apologize, fix it, and maybe throw in a little something extra for the customer if it was a big error. Everyone ends up happy, or at least satisfied.

But there are times when you NEED TO FIRE A CUSTOMER.

If you have your policies spelled out on your site (which you should!) it is the customer’s responsibility to read, understand, and accept them before making a purchase. You need to have pages like your return policy, FAQ, terms and conditions, etc clearly defined and available for your customers. You should link to them from your site pages, your cart pages, and include links to them in your customer follow-up emails.

This is imperative for regular issues as well as major problems.

By making your policies clear and readily available you’re doing everything you can to make sure the customer knows and accepts the rules. I do this on every one of my sites without exception.

So when a customer balks about a restocking fee or tries to return something months after the return period has expired I can point them to the pages on the site and explain, very nicely, that they are wrong. Most of the issues end right there.

But every now and again you’ll get one that just won’t see reason. Here’s where you need to be judicious. If they are giving you a huge problem over a couple bucks, let them have it. It doesn’t matter if they’re wrong, they’re wasting your time and by letting them go early you’re probably saving yourself the hassle of a chargeback.

If it’s a large amount or they’re harassing your customer service reps, give em a pink slip. You should not have to waste your time and lose a chunk of money because they couldn’t be bothered to read your return policy. As long as your policies are clearly displayed and the customer got everything they ordered you are not in the wrong.

Make sure you always keep all customer information and correspondence because in situations like this you’ll need it to win the chargeback that’s most likely coming. I have only ever lost one chargeback in a case like this, the credit card companies are usually pretty fair and you give yourself a lot of leverage by presenting all the evidence you can to support your case.

Here is an example from my own experience.

I have no control how my customer’s monitors are set, what shows up as pink on my screen could look more like red on someone else’s; so in a store where I’m selling something very dependent on color, like my tapestry store, I have a note on my return policy page that says: Due to the variations in monitors, colors of the actual tapestries may vary from the pictures shown. If you have any questions, please don’t hesitate to email us at info@european-wall-tapestries.com.

So when a customer wants to return a tapestry that isn’t quite same color they expected and are trying to force us to forgo the restocking fee I don’t bow down. First I offer them a free exchange – no restocking fee on the return if they want something else and if they choose a more expensive item I’ll give them a little discount to make up for the inconvenience.

If they refuse that and continue demanding, I simply let them know that those are our terms, they are clearly posted on the website, and I give them the information they need should they decide to return the tapestry. Then I end the communication. I am never rude or condescending – stick to the facts and be professional in your correspondence.

In cases like that, most of my customers accept the restocking fee and return the product and the others submit chargebacks. Let me just reiterate that this happens very rarely, I’m talking maybe 3 or 4 times a year.

These people will just keep arguing with you, you will not win.

Don’t be afraid to fire a demanding customer. By taking up your time or your employees’ time they are weakening your business and that is the opposite of what customers are supposed to do.