Readers’ Questions are in partnership with Emanaged and Online Seller Consulting.
I’m a brand, selling workout accessories primarily on eBay but also in small amounts on Amazon and Groupon. I’ve been selling for two years now and I’m keen to expand onto further channels, I’m just not sure which marketplaces I should expand on to. Maybe Walmart?
My main goal is to sell more to customers in the long run. For the next few years I want to grow my brand and sell my products not only online but also in bricks-and-mortar stores. But should I focus on both, or just continue selling online for now?
At the moment, I feel like I’m trying very hard, but I’m currently a little lost about what to do next.
— Michael L., L.A.
Time and energy
I can sense the fire and passion. That hunger for success you have will be needed for this to get off the ground. I would be concerned how that hunger translates if you became a zombie, but for ecommerce, it’s necessary.
However, we are all limited on time and energy. Even my two-year-old daughter, who has potentially the strongest, longest-lasting battery on the human market, and can outlast daddy by a two-to-one ratio, eventually needs to rest.
You sound like you’re aiming to achieve a lot, Michael. You’re a small team I assume. You can’t afford to spread yourself too thin. The biggest companies in the world all started by focusing on something small and getting that right. They built on a singular success and I’d advise you to do the same.
Singular focus hat on!
You sound like you’re trying to get product into stores and also sell product in as many places as you can online. Pick just one for the next few months. And in my opinion, pick ecommerce. You’ve already started that, and there’s plenty left to do.
Ecommerce may also help you get product into retail stores. Why? Because buyers for retail chains tend to check product online for reviews, sales velocity and more. If you approach buyers before your products are selling online, you’ll have a tougher battle in that meeting. Your position will be weaker, so they can leverage that against you. The more online history you have for your product, the better. You will know the worth of your market and product. You’ll be more confident to push for better deals, and buyers will have a harder time refuting your claims.
Also, those meetings with buyers might be all over the country. Some will come see you for the first round, but many larger operations will ask you to visit them for a demo. Your travel expenses will start to stack up over time and drain your energy.
These deals can also take time to land. They can also tie up stock, because you might have to sell on consignment, which is essentially locking up cash you need to keep the company running. Many contracts have 60 to 90-day payment terms, and buy-back clauses built into their contracts. You don’t want to tie up all that cash and take on those kind of risks until you can afford it, and the company is strong enough to absorb multiple headaches.
Ecommerce, on the other hand, can be run from home, on a far smaller budget, on your recliner, naked. Need I say more? Don’t imagine me as I write this, for your sanity’s sake.
For these reasons, delay thinking about getting your product into stores for now. You should revisit it, but it sounds like you have more to do online first, which works to your advantage. There is an easier path to generating more revenue that you can more directly control. Again, naked, if you want to.
Which channels? All channels!
Working in this industry, I often get asked by clients, prospects, directors, CEOs and owners, “Which channels are best to expand onto?”. My reply is usually the same: I have no idea.
Sure, we could do a few months of analysis. We could crunch numbers, compare graphs, rework Excel formulas and get some ideas. And after a few months, we’ll likely have the backbone of an expansion plan.
Guess what? Historically, when we have done this in the past, the plans are 50 percent followed and accurate, and 50 percent dropped and forgotten, or replaced in the first few months. Basically, months of analysis and preparation work produces about the same outcome as flipping a coin.
So the solution is this – don’t pick one, pick them all. Or at least the big ones anyway. Don’t ask yourself if you should sell on Walmart or Amazon or eBay or Newegg or Bluefly or Wish or Groupon or Jet or Etsy or Overstock or Target or… well, you get the point. Don’t try to pick one. Just try to pick which one you move onto next.
Amazon, it’s no secret, is colossal. You said you are only selling small amounts there, so it should be high on your list to increase sales. You are already on eBay, but for others it’s forgotten for all the wrong reasons. eBay still has a solid active user base and tons of traffic to tap into, so you could possibly do more there with increased focus and care. Walmart, although massive for physical retail, is a tiny buzzing fly in terms of online revenue. Groupon is small, but still solid for flash deals, and there are many more!
Without knowing what you sell in detail, it’s hard for me to tell you which marketplaces to focus on. Some product lines do better than others, depending on the channel. Some channels don’t support all product lines. But my advice here, at a top level, is to aim for all of them eventually.
This is the key to expansion online. The more automated, centralized and streamlined your infrastructure, the more profitable and scalable it will be.
Infrastructure is not an office. It’s not staff necessarily, or your own warehouse. It might include those things, but in ecommerce, it’s often systems and procedures.
Simply put, use a channel management system. There are hundreds these days, many with economical packages. They all have different strengths and weaknesses, so you’ll need to spend time sitting through demos and calls, tallying the pros and cons.
You can find advice on choosing the right channel management system in one of my previous Readers’ Questions, Marketplace Management Tools: How Do I Choose the Right One?
I would always encourage sellers to ask plenty of questions when choosing a channel management system. I can easily expand on that, so please write in if anyone out there wants a good set of questions to ask channel management vendors!
Focus on what counts…
Building a brand takes time. It’s a hundred little things. Use social media regularly, but tailor it to the right audience and demographic. Use email campaigns, but make sure they are segmented and targeted. Use online marketing, but with the right user journey back to a website, and with the right positioning, where your audience congregates online.
All this marketing should point would-be buyers back to a retail website. Treat this website as another channel you are aiming to grow.
Also, focus on margins, not volume of sales. Many new to ecommerce will see 1000 orders a day and scream “success!” But what if you only make a dollar per sale after all costs? Was it all worth the work? Instead, If you got 100 orders but made 15 dollars per sale, that’s not only more profitable, but it’s also far less work! Work is time, time is in short supply, and time is money.
Focus on how best to use your time. It’s easy to convince yourself that you’re making progress by working hard and being really busy. Sometimes, you’re just busy getting nowhere.
Leave a Reply