An Interesting Business and One I Like If Executed

by Scott - No Comments

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The e-commerce space is an interesting one to say the least. Being the broke startup guy I am, when I know I want a specific product I typically go to google and type in whatever it is I’m looking for. Moments later I’m taken to an aggregator of some sort where I can seamlessly find the site with the cheapest offering (with shipping included!).

This is definitely great for the consumer for a couple reasons. 1) I can find the product I desire easily and efficiently. 2) This process ultimately results in a race to the bottom for brands cutting in to their beloved margins and in some cases leveling the playing field.

The question is, if I’m a brand how do I separate myself from the herd? I can cut into my margins by offering a lower price, but my competitors will most likely follow putting me back at square one. The guys at Stella Service offer an interesting take on this. Their company is what I like to call the Veri-Sign of customer service. By vetting the customer service practices of e-commerce sites from a variety of criteria they offer a seal to worthy brands which indicates to consumers that they provide a certain level of customer service.

If I go to an shopping aggregator, I will go to the sites that have the customer service seal in the scenario that they all have the same price. That being said, there is definitely an opportunity here in many saturated markets. However, two things will need to happen here for this to ultimately be successful. 1) There will need to be a scarcity of seals so that everyone and their mom isn’t rocking the Stella badge, otherwise it is meaningless. With close regulation across verticals this should not be difficult. 2) The greater challenge will be establishing the efficacy of the seal to consumers. In order for the seal to make sense for brands financially, it must hold value for consumers potentially even to the point where they’d be open to paying a bit more for a better buying/customer service experience. Executing on this will be the most important touchpoint for these guys.

I’m excited to see what the future holds for these guys and if they can execute I’m feeling good about the service they provide!

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