There are too many online retailers who are reluctant to break out of their comfort zone. They are comfortable selling through a particular sales channel and refuse to try other avenues.
This can be understandable though. Retailers cower at the prospect of selling on multiple channels. How can I handle the extra orders? How much time do I spend carrying out competitor research? What are the fees and shipping regulations involved with these new channels? How can I manage my inventory effectively over multiple channels?
Panic no more! In this article I’ll highlight the benefits of selling on various marketplaces, why you should be running your own web store and explore why there is a resurgence in bricks and mortar. Lastly I’ll mention how inventory management software can tie this all together.
The Benefits of Marketplaces
The most obvious thing to note about marketplaces such as eBay and Amazon is that they already have a massive customer base. Millions of people are browsing and shopping on these sites every day, looking for products similar to yours.
Many retailers are put off by the fact that Amazon and eBay charge fees for selling on their site. However, it’s worth noting that there are no costs involved in regards to site design or development, which would get with your own site.
So which marketplaces are the most popular with retailers? Not much of a surprise, but Amazon is an undeniable choice. This is backed up by the fact that 19% of all US millennials have an Amazon Prime account. Regardless of whether your products are being fulfilled by Amazon or not, this age group are spending a significant amount of time on the site. Why is this important? Currently, there are 80 million millennials, just in the US and they spend over $200 billion every year online.
Marketing Land reported in October 2015 that Amazon now has more consumer searches than Google’s search engine. Further to this, 44% of all online consumers go directly to Amazon’s site.
When it comes to eBay, there has always been this perception that it’s a platform for part time sellers. However, eBay ‘power sellers’ generate a much better profit margin than those who sell on Amazon.
In fact, 10% of all eBay sellers report a profit margin of 50% or more, whereas Amazon sellers can only report a figure of 5.6%.
eBay also boasts the fact that around 11 million searches are made on the site every hour. eBay’s mobile shopping app is sharp and sleek and very user friendly which has resulted in more than $20 billion worth of mobile purchases in 2015.
There are so many other exciting and newly emerging marketplaces for clothing companies as well including Newegg, Etsy, Rakuten, Jet and Sears. Most notably is Wanelo, which is fairly unknown to people outside of the US.
The growth in consumers using their mobiles is very evident with Wanelo. 85% of all purchases on Wanelo are done so through their mobile app. Also, there is currently 350,000 stores listed on the popular platform who are selling over 20 million products.
Are you a Shopify user? If so, you can push all your current listings to Wanelo, whilst still managing them through your Shopify dashboard.
The Benefits of a Webstore
A few years ago the thought of starting your own website and selling products through it was unthinkable for retailers. However platform such as WooCommerce and Shopify have completely changed the game for technophobes.
Hosting, security and credit cards processes are all handled via these platforms. In addition website themes and app add-ons can be installed with a click of a button.
Despite their benefits, marketplaces have their constraints when it comes to growth. This can be down to heightened competition, competing against the marketplaces themselves or regulations that prevent you from adding promotional material in with your packaging.
The possibilities with your own webstore are endless. With the right communications a first time buyer could be converted into a fan, who then markets your company for you. Shopify are very vocal in broadcasting success stories, of people who have used their platform such as Black Milk Clothing, SkinnyMe Tea & Beardbrand.
In a recent survey by Web Retailer, 60% of all Amazon sellers stated that they wished to start their own website this year. Of course, there is a monthly subscription but Shopify and WooCommerce (with hosting) can start from as little as $9 a month.
Bricks & Mortar Stores – Back from the dead
20 years ago the high street ruled, but online shopping killed many stores off. However, there has been a resurgence in bricks & mortar stores and in particular, pop-up stores.
Even US giants Amazon opened a bookstore in Seattle last year. From their research, they noticed that ebook sales fell in favour of physical books. They realised that people were still yearning for the experience they had whilst shopping. Such as the physical touch of a product, or the recommendation from a staff member.
In recent times companies such as Warby Parker, Bonobos and Birchbox, have opened stores to improve their relations with customers and to refer traffic back to their website. When you take into account that there are 1.2 billion websites worldwide, it can be difficult for online-only companies initially.
Because of this, there has been a rising popularity in pop-up stores. The benefit of these are that it allows you to gain exposure to a new base without capital-intensive expansion. You aren’t bogged now with a long lease.
It can also give you invaluable feedback on your product, due to the increase in customer interaction
How to manage all your channels
At this point you’re probably thinking… 6 marketplaces, a webstore and a pop-up store, how am I going to manage this?
That’s why inventory management software is so vital in 2016. It’s easy to see why as companies are losing $634 billion a year, due to items not being in stock. Further to this, they also lose $472 billion every year, due to overstocking issues. Adding together this is amounts to a whopping $1.1 trillion dollars every year.
A good inventory management system will eradicate these errors by automatically updating your stock across all your channels in real time. It will also help to manage your accounts, sales reports, shipping and purchase orders.
Despite the obvious benefits, 46% of small to medium businesses still manage their inventory manually via spreadsheets, or don’t manage it at all.
Below is 5 reasons why you need to be looking into inventory management software…
Avoid Overselling – Your inventory updates across all your channels in real time. This will prevent you from disappointing customers when a product is ordered simultaneously across 2 channels.
Preset Reorder Levels – Inventory systems come equipped with a preset reorder level. When met, it automatically sends off a purchase order to your supplier. This ensures your most popular items are regularly stocked.
Save Time and Money – Updating your inventory is one less admin task to worry about. This allows you more time to focus on furthering your business.
Avoid Human Error – eBay and Amazon are very strict about orders being dispatched swiftly, so human error can occur. See everything in one clean dashboard and automate your label printing.
On the go – Most systems are cloud based and are also available as an app. You can keep up to date with your stock from anywhere and also make sales at events and/or trade shows.
Richard Protheroe is a marketing executive at Veeqo