Your Virtual Virtual Store

Already have a Web site? You, too, can jump on the e-commerce bandwagon, and you won't even need to worry about buying and stocking products to sell.

Already have a Web site? You, too, can jump on the e-commerce bandwagon, and you won't even need to worry about buying and stocking products to sell. Instead of dealing with manufacturers and the myriad details of operating an online store, you can go to a storefront broker like Affinia (www.affinia.com), eSaler.com (www.esaler.com), or Vstore (www.vstore.com), and they'll do it all for you.

These companies act as middlemen between your site and online merchants that have the products and the retail expertise. You pick and choose what to sell to match the themes of your site and the products you think might interest your visitors. The products are displayed on your own Web pages, creating, in effect, a virtual storefront stocked with merchandise that is actually handled by another online merchant.

Starting an affinity storefront couldn't be much easier. You go to the Web site of a storefront broker and sign up, then build your storefront using your browser to run setup software provided by the broker. When completed, the products displayed at your site are hyperlinked to the site of the retail merchant (usually the broker, too), and you're in business. If you don't display many products, the whole procedure can take only minutes.

In the case of Affinia, the products usually indicate which online store they come from, and when customers decide to buy something, they are linked to the merchant's site for ordering. Vstore takes a different tack and presents the same shopping cart and ordering process no matter which merchant is involved, because everything is done through the Vstore site except for order fulfillment. eSaler takes an even more covert approach by embedding storefronts, called Shoplets, into your site. The online customer may never notice that your storefront is a brokered e-commerce site.

Storefront brokers deal with the complexity of the transactions, including who gets paid for what, and are responsible for bringing together merchants and reseller sites. The brokers are similar to the distributor in standard retail, but in this case no product moves—only electronic data flows back and forth. Products are ordered by a customer at your site, transacted through a user interface provided by the storefront broker, and shipped by the merchant.

Storefront brokers don't charge you for their services. They make their money in other ways, such as taking a commission from the merchant out of the product price—typically 5 percent to 25 percent—or by collecting from the merchant a finder's fee per customer. Likewise, your storefront usually takes a cut on a per-product basis, again in the range of 5 to 25 percent. (New schemes for paying the broker and storefront site appear regularly.) While these brokered sales represent a loss of margin for the original merchant, this is a volume game. By multiplying the number of outlets for the products—sometimes by the thousands—merchants stand to make more money.

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