Part 1: Starting a Startup: Tips for Budding E-Commerce Entrepreneurs.
Selling products online requires answering one basic question: where? Beyond traditional business websites, entrepreneurs have a cornucopia of choices, including Etsy, Amazon, eBay and Facebook. Making use of these alternatives can be a vital part of a business’ sales strategy.
“In 2014, we began by selling on our own website,” said Kyle Goguen, owner of Pawstruck.com.
“As an avid online shopper myself, I soon realized that we were failing to reach all online customers in our industry. While many people were finding our website, we started to understand lots of people out there prefer sales channels they are comfortable with,” he told the E-Commerce Times.
Pawstruck.com’s all-natural, healthy dog treats would reach more people — and dogs — if the company began to make use of other sales platforms, particularly Amazon and eBay, Goguen realized.
“After about six months in business, we decided to expand to both of those channels,” he explained. “Since Amazon and eBay were the biggest marketplaces, it was an easy decision that we have never regretted.”
Find a Fit
Choosing where to sell products online requires evaluating the fit between channel and product. Finding the right fit means having a strong sense of the company’s products and its customers, as well as an awareness of who uses various channels.
“I envision Popwish as a heart-to-heart business, providing an intimate shopping experience and familiar customer relationships,” said Mark Oldenburg, CEO of handcrafted greeting card business Popwish.
“Our sales channels have to be able to communicate this notion of doing business through imagery and storytelling design,” he told the E-Commerce Times.
Founded this summer in a small town outside of Frankfurt, Germany, Popwish is figuring out which channels are the best fit for its products.
“We started with our own site that we built using Shopify, and our own design and programming sites, and we are now moving into different sales channels,”said Oldenburg. “So far, we are selling on Etsy and Facebook, with little to no success with the latter. We are currently working on listing our products on Amazon, and we are evaluating the possibility on listing our Popwish cards on eBay.”
Though it can be a process of trial and error, choosing a mix of social channels in addition to a traditional website brings the benefit of more traffic, more customers and potentially more sales.
“All benefits have to do with the existing traffic that these channels already attract and the readiness to buy of these visitors,” said Oldenburg. “Sites like Amazon or Etsy attract individuals who visit these sites prepared to make purchases. It is much harder to generate meaningful traffic that is only remotely as qualified to make a purchase yourself, than to dip into this pool of existing traffic.”
The power of choosing the right channels lies, in part, in finding particular types of customers where they’re already shopping. People shopping on Etsy, for instance, are primed and ready to buy unique handcrafted items.
“More and more, there is a fatigue with the traditional retail landscape and the sameness found at big-box retail,” said Kimm Alfonso, director of seller development for Etsy.
“On Etsy, you’re buying from a person, not a nameless, faceless brand, and the products have meaningful stories,” she told the E-Commerce Times.
There’s a certain kind of Etsy shopper, in other words, and businesses would do well to get to know this niche and determine if it’s where they belong.
“We believe many Etsy buyers are motivated by more than simply price and convenience; we believe they also value craftsmanship, uniqueness and authenticity. Etsy buyers want to know how and where items were made and who made them,” said Alfonso.
Similarly, Amazon and eBay have their own types of customers and work well for certain kinds of products.
“If you have a business where you manufacture your own product, then Amazon is the best choice,” said Pawstruck.com’s Goguen. “If you are a reseller of existing brands, eBay might be easier for you — especially when first starting out.”
In other words, choose your channels wisely.
It “comes down to the way products are sold on each of these channels,” said Goguen.
“Amazon consolidates all sellers onto one product listing page. This means if you sell a popular product, you will be competing with many other sellers on the exact same page fighting for Amazon’s buy box. Between you and the other sellers, the only differentiator is price. This leads to unwanted price wars, which generally end in lower margins and difficulties generating sales,” he explained.
“eBay, on the other hand, splits all listings by seller,” Goguen said.
If choosing a sales channel becomes overwhelming, it never hurts to turn to experts. A variety of consultants and businesses specialize in getting your products where they need to be.
“Having your products in as many places as possible is a key strategy,” said Benjamin Trotter, CEO of Storefront Social.
“People use social media to talk about products. Social media is another avenue in which retailers can monetize their presence in yet another channel, and should be a strategy that all retailers consider,” he told the E-Commerce Times.
Storefront Social is one of the growing number of businesses that specialize in setting up stores on particular channels — in this case, Facebook.
“Facebook stores are unique in that you have a direct line of communication to your fans. Someone who has already liked your page is the most qualified buyer of your products,” noted Trotter. “It’s different from a business website in that the channel is global reaching and reaches unqualified and qualified buyers alike.”
Other services help e-commerce businesses integrate their sales on multiple platforms at once.
“Today’s digital consumer is everywhere, posing a challenge for e-tailers to reach their consumer on the right device, at the right time,” said Razvan Roman, CEO of Two Tap.
“Two Tap gives e-tailers the tools to reach their consumer by allowing selling of products everywhere,” he told the E-Commerce Times.
Whatever channels and strategies you choose, it’s important to research, adapt and be flexible. After all, tomorrow’s channels differ from today’s, but the basic principle of knowing your business and your customers will hold.
“Make sure you know who your customer is and where that type of person shops,” said Goguen. “Some industries will work with certain channels and others won’t. Just make sure to be patient and understand that your ranking on the channel and revenue will improve as long as you’ve done the research, provide a quality product, and have exceptional customer service.”
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