Internet marketers make massive mistake

One penny saving in budgetSo, were you a winner or a loser in yesterday’s Budget? Chancellor George Osborne claimed to be delivering growth and jobs to the UK. Meanwhile, Labour Leader Ed Miliband said it was a “Del Boy” Budget. There was inevitably plenty of detail, but all the coverage was about a single penny – the 1p “reduction” in petrol prices; shame the prices at many pumps went up by 1p during the morning just before the Chancellor started speaking. Sadly, you don’t have much choice in buying fuel. You can drive round – using up litres of petrol – to try and save a few pence here and there. But most of the local petrol retailers do “local market” pricing – everyone in your area charges pretty much the same. The word “cartel” comes to mind, doesn’t it?

The real issue is that we like choice; human beings like to think they have made a decision. If there is no choice, we have no decision to make and a great portion of the front of our brain gets no work to do. We feel we are missing out. Controlled pricing reduces choice and we feel as though we are being conned (even if we are not). Remember the “Net Book Agreement”? Books were controlled and every retailer charged the same price for each book. When the Net Book Agreement was scrapped after it was deemed illegal in 1997 the book publishing world cried out in horror, saying it would mean the end of publishing houses, author livelihoods and all sorts of other financial mayhem. Of course, since then the average number of books published has more than trebled, the numbers of book sold has gone through the roof and people can buy books in all sorts of places, from online to your local supermarket. Once a fixed agreement disappeared, people felt they had the ability to decide for themselves and the result is greater sales.

Online, particularly in businesses which were set-up on the web, you find that there is actually little choice. You can choose to buy online – or not. Not much of a choice. It’s rather like petrol – buy it, or not.

An indication that many Internet marketers are missing a trick is revealed in a recent survey which shows that people want to be able to choose where they buy your products. They want choice and flexibility. So they might see your ebook advertised online, but then want to go into a store to see it, touch it and buy it there. In fact, the study reveals that the more channels you use to sell your products, the better because it provides greater choice for your potential buyers.

So, if you are an information seller online, is your material packaged and sold in relevant physical stores? If you have a book sold in the likes of Waterstones, is it also in Kindle format and available on an ebook store, like Lulu? If you sell accountancy services, can people buy your “annual accounts service” in a box at your local stationery suppliers?

The more channels you have, the better. People like choice, which is why they don’t like prices being dictated to them. And that’s why whoever the Chancellor is, we don’t like them – 1p savings or not!

1 thought on “Internet marketers make massive mistake”

  1. Choice is important and our right to choose who & where we buy from and at what price is part of that. Its all part of the EU single market ethos as well. But there are problems with choice.

    If we buy in the UK we pay one price, in another EU country its a different price and in the US another price again.

    Price variations are dependant on; the price set by the manufacturer for each market, currency exchange rates, shipping costs and local taxes.

    Since the Internet is global you can find the same product on sale on-line at wildly differing prices around the world. It is choice but it is an infernally confusing one

    The UK seems to be an expensive place to buy anything partly because of anomalous rules. VAT rates are different in EU countries, sometimes they apply and sometimes they don't.

    The chancellor is trying to close some loopholes for DVD and CD's coming from the Channel islands but by doing so he is removing choice for British consumers & making them pay more during hard times. IMO all I can see this doing is fuelling illegal downloads and piracy.

    Also it is a puzzle to me why we pay VAT on e-books (Amazon Kindle) but not on books printed on paper. This is not saving trees, it's not green !

    Why is downloadable software from some suppliers VAT rated differently (higher) than UK rates and more than a packaged version shipped to you?

    Another thing that can be effected by where you purchase a product from is your rights as a consumer. Where do you stand if the product is not as described, how do you get your money back?

    If you have intentions are to make your product available in multiple forms, distributed via multiple channels and in a global market, then make sure you have all the VAT, shipping, and legal aspects all well researched for everywhere your product will be availbel and your website and any packaging carries all necessary information and legal protections.

    Finally advertising of your UK product to UK on-line users is now covered by the Advertising Standards Agency so wild unsubstantiated claims for your product may get you into hot water. Check you website copy and sales letters for compliance. But it begs the question: what if your website & product is not hosted on a UK server and is only offered to people outside of the UK….? yes it's a minefield.

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