I’ve had three people ask me how to sell (more) premium priced watches online.
This popularity is part of the problem. It appears to be an attractive market to be in from the seller’s perspective with an interesting product and a high transaction value. However some of the underlying issues make the opportunities for success very limited including how comparatively easy it is to set up a business selling watches online.
Winning The Watch Buyer’s Confidence & Trust
I can’t emphasise enough the importance of winning the buyer’s confidence and trust. Premium watches are an expensive purchase for most people and they have a natural fear that things may go wrong with the transaction. You know if you can be trusted (or not) but they don’t.
The easiest way to understand is for you to put yourself in a similar buying position where you are spending a few hundred pounds online. It doesn’t work so well if you’re using imaginary money but you may get part of the way there but you won’t have the risk of loss.
I’d try two types of products
– an unbranded item where you have uncertainty about the quality.
– a branded item, where, if genuine, the quality shouldn’t be an issue but where you have a nagging doubt on whether you can get a better deal for exactly the same item elsewhere.
This will give you a feel for something I call the buy / don’t buy scales. It helps you to weigh up the issues that encourage someone to buy and the concerns that hold back the purchase decision.
Alternatively think about the trust issues you have with the idea of sending out the watches to people who order online before you get paid. In theory, if they like it, they send the money or if they don’t, they send back the watch. Of course, you’ll have spotted the problem. With some people you won’t get the money or the watch.
The thought probably makes your stomach twist and you risk losing the wholesale price of the watch and not the extra value the customer pays.
You don’t know the possible buyers or their motives. They don’t know you.
There needs to be trust and confidence.
Amazon And eBay Set The Customer Expectations
Most people who buy online have bought through the Amazon and eBay websites.
They are used to receiving assurances that suppliers can be trusted by having the ability to check on their transaction histories and see the comments made by previous buyers.
Things sometimes go wrong and they may also have been through these websites well established customer complaints and problem handling processes.
Smaller but still huge websites may offer similar facilities but with fewer reviewers. Many small websites don’t capture customer reviews and testimonials at all. Instead there’s just a gap of uncertainty.
The buyer wants reassurance, the selling website doesn’t give it and this creates a big obstacle to any purchase. On my Buy / Don’t Buy Scales, this is a heavy weight on the don’t buy side and may be overwhelming.
Why Do People Buy Premium Watches?
I think there are two main reasons:
- As a present for someone else.
- As a reward for themselves after getting a promotion, new job etc.
If you’re buying for someone else, you worry about whether your tastes will match theirs.
- What happens if they don’t like it?
- How will the giver and receiver feel if the watch isn’t to the expected quality?
- Can they return it? Under what conditions?
It’s easier to buy for yourself because there isn’t the fear of disappointment, potential embarrassment and the difficulty of handling problems with an extra person involved. However they will still have some of the same concerns.
The watch may look good in the photographs but it may not feel right in the hand. It may be damaged or not work well.
How Can You Make It Easier For Customers To Choose A Particular Watch?
Most people don’t buy expensive watches regularly and therefore the purchase can feel stressful because they don’t really understand what they are buying or even understand the terminology of the trade.
I think it’s useful to explain why it’s worth spending hundred pounds on a watch and the differences that exist between watches in a buyers guide.There are reasons why some people will be happy with a £10 watch from the market whilst others will pay hundreds, thousands, even tens of thousands on a wrist watch.
A number of websites try to guide the inexperienced buyer including:
A confused buyer is unlikely to buy and one problem with these watches is that they all look nice. Inability to make a choice is another big factor on the Don’t Buy side of the Buying Scales.
Websites like Amazon.com or Amazon.co.uk guide people to particular watches largely based on user reviews. Popular watches with high ratings become a justification to buy a particular watch. I’ve done it myself with other types of products, for example I’d say something like, “the one I bought you has over 500 5 star reviews” and I’d feel confident and so would the person I was buying for.
If people are looking for a particular type of watch or style or brand, their excellent search facilities make it easy to find matches.
This is a hard thing for you to match, but if there are professional watch review sites, you can borrow their credibility. It’s worth picking up their ratings and linking to them with a comment along the lines of “This watch has been rated 5/5 by BuyThe BestWatches.com and they said in summary ‘this watch offers an outstanding combination of style, sophistication and value.'” Just be careful about borrowing too much because there are strict copyright laws. It’s best practice to ask the website’s permission and, if they refuse, don’t do it.
You might want to highlight a few watches as “Our Pick”. You’d explain that you only feature watches that you believe people would be proud of but you’d highlighted one particular watch in each price range (£100-149, £150-199, £200-249 etc) that you particularly recommend and explain why.
You could go even further and write fair reviews yourself that highlights the strengths and weaknesses of all your watches. For example, some people will choose a watch because it is very thin and light while other people want a chunky feel. Then helpfully guide people to lighter or heavier alternatives.
I’d encourage you to have an information rich website. More information is better than too little, especially about the sizes and specifications of the watches.
Are Your Photographs Clear And Good Enough?
When a customer goes to a watch shop on the high street, he or she is able to look at the different watches and, when they have the attention of a salesperson, handle a few. They can see it from all 360 degrees.
You need photographs that show the watch from various angles and these need to be able to be highlighted to increase them in size.
Are Your Watches Price Competitive?
The problem with ecommerce is that, unlike shopping on the high street, another store is just a click away. Once you’ve narrowed down your choice to a particular watch, with search engines, it’s relatively simple to do price comparison checks.
If you’re considering paying £400 for a watch, there could easily be a range of £100 in prices offered by different websites. Your customer will believe quite rightly that the money is better in their bank account than yours.
Again, it’s useful to learn from your own buying experience online and especially with websites like Amazon and eBay.
When I’m buying something that many suppliers are selling, I’m basing my decision on the price, the delivery date promise and the indication of supplier reliability.
Remember, if people are buying for a gift, they want to feel confident that it will be delivered on time. Lateness can be embarrassing. If people are buying for themselves, then generally they want it within a few days because we’re all impatient to get what we want.
A potential customer may have seen a lovely watch on your website but they will go to Google, Amazon or eBay and type in the brand name and model reference number to see what’s available elsewhere.
Can you think of a good reason why they should pay £350 from you for an uncertain delivery date when exactly the same watch is available for £320 from Amazon with next day Prime free delivery?
No I can’t either.
Does The Website Feel Right?
The look and feel of a website sets the tone for the buyer’s experience.
In theory, specialist websites are good but they must add value. They must have information that isn’t available on less specialised websites.
Compare your website with Amazon:
- Which has the most watches of each brand you sell?
- Which sells the most premium brands?
- Which website guides the customer best to making a suitable buying decision?
You must have an About Us page, ideally with the names of the business owners, photographs, the full legal name and address of the business and a history of how the business has started and developed. Too many people hide behind the anonymity of the business but, if you want to be trusted and inspire confidence, you can’t do that.
You must provide clear guidance on deliveries. A guaranteed delivery date may be as important as the price to the buyer.
You must also have a customer friendly returns policy in case things go wrong and make clear details of the manufacturer’s guarantee and any additional guarantees you may provide.
It’s important to capture customer feedback. Social proof is an important factor of influence so people want to see that you’ve sold plenty of watches to happy customers.
Can A Small Online Premium Watch Business Succeed?
I think things are stacked against you.
High Street retailers struggle against Amazon and so will you but for different reasons.
The high street retailer is bearing the high costs of a physical shop which has to be properly staffed. This normally means that selling prices are high but the customers have the advantage of being able to see the watches “in the metal” and, if they make a decision, walk away with it immediately.
You don’t have these costs but you have to inspire confidence and trust and you must be price competitive. Inevitably that’s hard.
Selling Through Amazon and eBay
These two websites have big advantages.
Most people already have accounts with them so there are no irritating delays in setting up accounts or worries about sharing confidential data including credit card details with an unfamiliar website.
Not only do they rank well in Google for organic searches, Amazon has a very large Google Adwords account to bring traffic to their website through the searches and remarketing. They have also become defacto search engines themselves. Instead of going to Google, many people go straight to their local Amazon website.
I recommend ecommerce businesses become resellers on both Amazon and eBay to get in front of more potential customers. The competition is ruthless as customers inevitably favour well respected suppliers who offer the lowest prices. Your challenge is to become one of them.
The other way to go is to work on your own website to develop the specialist nature of it and the quality of your product reviews and then become an affiliate of Amazon and eBay and send them traffic which may become sales. You’ll get a small commission but at least you’ll get something.
Unfortunately premium watches are not the type of thing that most people are likely to buy regularly so you’ll have limited opportunities for developing relationships with a customer list. This is another drawback of the premium watch market.
The Big Three Risks Of Business
When I talk to people who are planning to set up a new business or have started a business but it’s struggling, I introduce them to the three big risks of business. These are:
- Demand Risk – is there a large market of people who are eager to buy the products or services you want to sell. Is your product a solution to an urgent problem or does it encourage regular purchases, either through usage or for collections?|
- Competitive Risk – does the market offer the opportunity for the business to develop a competitive advantage that helps it become the preferred supplier for a group of customers or a particular market segment? Or are there entrenched competitors who already have huge competitive advantages that can’t be neutralised?
- Capability Risk – is the business able to deliver on the promises made in its marketing?
Online Premium Watch Resellers Face Huge Competitive Risks
It’s an attractive product to sell and whilst it will probably exaggerate the rises and falls of times of prosperity and recessions, a lot of people will want a nice watch on their wrists, even when people look at their smartphones to find out the time.
The basic capabilities of getting supplies from the watch manufacturers or wholesalers, listing them on a website, arranging packaging and shipping isn’t particularly difficult.
The big problem is the competitive risk that small online watch websites face.
Not only are they battling against Amazon and eBay but they also face competition from large “Category Killer” websites that specialise in watches along with the websites of high street jewellers and watch retailers.
There are two problems:
- Neutralising the competitive advantages of the large websites.
- Creating a competitive advantage for themselves that gives customers a strong reason to buy.
Physical retailers are encouraged to boost the “buying experience” to fight off the threats of online competition.
Online retailers need to find something else.
The lowest price is one option but, even there, a problem exists. Cutting margins to the bone make it hard for a business to survive and the largest competitors may be buying at much lower prices, making them able to offer prices that a small retailer can’t match.
Think carefully about the Buy / Don’t Buy Scales. You need to eliminate the vast majority of “don’t buy” issues to even get in the game. Then can you think about how you can load up the buy side?
If you can’t sell at the lowest prices and you can’t other any kind of extra value from your website to consumers, there is no reason for your business to exist. That sounds brutal but the market is cruel and doesn’t give anyone “undeserving” an easy living.
Working hard on your website isn’t enough – neither building it nor taking all the actions necessary to attract traffic. As far as your customers are concerned, there must be a clear reason for its existence from their perspective.
I wish I could be more positive about a pure online business. I think there may be opportunities for an online/offline watch business where the business holds special events but even that’s difficult because of the security issues involved.
Can You Learn From Others?
I think it’s well worth trying to look at what happens in other types of business by channelling a funnel vision approach. Jewellery is an obvious trade to watch as they have similar security issues but the best ideas have probably already been adopted.
What other trades can you learn from?