Is the internet good or bad for our industry? It is a question that has often been asked when a locksmith has quoted a price to replace a lock only to find the customer says, “thanks, but I can get it a lot cheaper on the Internet. We asked DARREL WALTERS, one of the founders of the successful internet business “LocksOnline,” for his take into internet selling.
“LocksOnline has been trading over the internet for 13 years and I have been in the industry for over 25 years,” Darrel said. “I set up “LocksOnline” as a natural extension to our locksmith business,” he explained. “Our geographical base is bounded on three sides by water. So, in order to grow our business we had to travel up the M4 Corridor. Logic suggested that perhaps a new route to market would be to build an e-commerce site and sell products to anyone who wanted to buy locks and other security products on line. In those days there were no data feeds from manufacturers or wholesalers. It was about painstakingly scanning images from catalogues and writing our own descriptions. It was a good day if we had 20 products on line.
“In an ideal world we’d rather not have any competition, but within our first year, we had competition, which we expected,” Darrel added. “But it is not an easy ride.
“What we have seen over the last five years are companies setting up on line with data feeds from wholesalers or manufacturers, which results in all the sites selling the same products – with the same images and descriptions. Selling products in this way only gives a company one advantage – price. We are seeing companies discounting locks now by unbelievable margins and it shocks me that they have to sell so much to make any decent profit margins. We know, as do most in the industry, roughly what companies can buy products for, so we are also aware of what margins are being made or not made.
“With large companies and the big DIY sheds selling on line and with big marketing budgets it is getting even harder to find your market.”
So how does LocksOnline intend to go forward?
“Like any forward-facing, proactive company, we have a few aces up our sleeves in marketing and promotions for the company and products. “Selling on the internet is no different to selling out of your shop or from the back of your van,” Darrel said. “It is all about personal service and we try to do the same. To run a successful website is just as hard as running a successful security shop or locksmith van. Everybody wants a slice of your profits to promote you on line, like advertising in the local newspaper, or your local trade directory for bricks and mortar businesses. We have full time web developers and content writers for our site, not really that much different to an account departments or security surveyors for a normal business. Our shop front is our home page and is fundamentally no different to your shop window. It has to be updated and cleaned on a regular basis – selling on the internet is no different. In fact, it is probably more important for us to have fresh content.”
We asked Darrel what advice he would give to anyone thinking on selling online.
“I have to be honest – selling on the internet is not the way to an easy buck. Probably six years ago you could consider e-commerce as a cash cow, but no more. There are so many jostling for position and dropping prices, so unless you have a substantial amount of backing, any SME may struggle to set up effectively.
“Quality, service, value for money and niche are the basic ingredients to set up a website. If you have something that someone wants you will sell it. If you have something that everybody wants that your competition has not cottoned onto, then you could stand to make a lot of money. This, however, could be for only for a very short time before someone will copy you and offer it for less. Continue to innovate, be different and try your best to engage with customers.
“The internet is not going away and every business needs to embrace its power, and marketing potential.,” Darrel emphasised.
“Even if you don’t sell on line you still need to have an online presence. We have all seen over the years the local trade directories get smaller and smaller. It is so easy now to pick up your mobile and get the local number for the local locksmith so, if you don’t have an online presence; you’d best look into getting one.”