Get One-Pay Consignment SoftwareVenturing into the realm of online sales can be a daunting task for consignment businesses. The time, effort, and money invested in an attempt to sell online might be better spent on improving sales at your local store. Below, we discuss some of the significant disadvantages of selling consignment items online.
Credit Card Theft and Chargebacks
This is one of the most significant concerns with online sales. While you may carefully describe your item and celebrate when you secure a sale, the aftermath can be troubling. After shipping the item, you may receive complaints such as:
- The item doesn’t fit as expected.
- The color wasn't as described.
- Claims of misrepresentation.
- Damage during shipping.
- Delays in shipping.
Unfortunately, many customers leverage these complaints to demand refunds, leading to chargebacks. In most credit card disputes, companies like VISA often side with the customer, which means you could incur additional costs such as shipping fees, processing fees, and hefty chargeback fees.
Offering a money-back guarantee might seem like a viable solution; however, it may inadvertently attract fraudulent activities, allowing dishonest buyers to exploit your trust and keep the merchandise.
The Cost of Creating and Maintaining a Web Presence
If you are unsure how to create your online presence, the costs can quickly escalate. Many web service providers charge exorbitant fees for basic websites. For instance, some competitors charge around $700 to create a simple five-page website, while the actual cost of a template might be less than $50. Additionally, the ongoing costs of hosting and maintaining your site can add up, diminishing your profit margins. Online selling platforms like eBay, Shopify, and Amazon may offer a more cost-effective solution with minimal fees compared to running your own website.
Challenges of Credit Card Processing
Collecting payments from buyers can be another hurdle. If you’ve never applied for a merchant account, prepare for a lengthy application process requiring extensive documentation, including tax returns and bank statements. Moreover, you might find yourself locked into long-term contracts with high monthly fees and processing costs, which could erode your profits.
Final Thoughts on Online Consignment Sales
While the allure of online consignment sales may be tempting, it is essential to weigh the disadvantages carefully. For every successful online selling venture, there are numerous businesses that have faced insurmountable challenges. Understanding these potential pitfalls can better prepare you for the reality of selling consignment items online.