Seller marketplace expansion: move from one platform into a multi-channel operation
So, you’ve built a successful online presence selling some sort of merchandise. Most shop owners begin with a single channel of their eCommerce business. But what does that mean, exactly?
It means you began on one, maybe two, platforms.
Maybe you started your own Shopify store, running Facebook ads to sell your products. Over time, you added SKUs and item categories to create a full-fledged online brand. Or, take that same story, but put it all on Amazon FBA.
Now, after conquering the platform, your mind quickly gravitates toward expansion. Expanding through products still, sure. But also moving into other platforms. After all, if you’ve done it on Shopify, why couldn’t you on Amazon, Etsy, or Rakuten?
After you're done, that one online shop will be an international eCommerce experience. What you need now is a roadmap for your objective. This resource provides reasons for going multi-channel and important considerations before doing so.
5 Reasons to go multi-channel
1. More potential customers
The first and most obvious reason for expanding where you sell is the fact that other platforms mean more potential buyers.
For instance, if you began your retail journey on Shopify, your audience is likely niche and hard-won. Each new customer comes from word-of-mouth or direct ad dollars spent.
Opening up to Amazon FBA, from Shopify, means billions of potential eyeballs now viewing your already successful products. And this is only one factor. Others include:
Allowing dropship options for your products, so thousands of potential partners sell your wares on their own established sites
Becoming more of a brand and wholesaling your items to other online and brick-and-mortar stores
Moving into international markets, creating a truly global shop
Opening up stores on a large number of third-party platforms
2. Variety of options for customers
Selling items “in-house” as opposed to on a third-party platform (like Etsy or FBA) usually means a higher profit margin, but not always. Plus, there are other factors to consider. One example is if someone wants to buy a certain item and really cares about prompt shipping.
Do you get items picked up and shipped the same day? Likely not.
Many buyers don’t mind waiting four to five days, as opposed to 24 to 48 hours. Others do. In those cases, it’s better to take their business via Amazon rather than making an extra few percent margin on your site. Something is better than nothing.
The point? Not only do multiple platforms mean more potential customers, they mean more options for them, too.
3. A bigger funnel
Each platform gives your overall buyer funnel another ring. What does that mean? Think of three circles, like a target:
The smallest, innermost circle are avid fans of what you do, buying multiples of products.
The next circle is warm buyers who get what they need and prefer your stuff if they’re reminded.
The biggest, outer circle includes customers who bought once or twice.
Now, turn that target image into a funnel. The more people entering that big circle, the more opportunities to bring them down into the smallest circle.
Example: A shop began on Shopify and expanded to FBA. Each product shipped out from FBA includes brand information to get them plugged into your network (such as coupons for their next purchase).
Will everyone come? You know the answer is no. But some will. And you would’ve never gotten them further down the funnel without expanding your sales channels.
4. Potential for improved sell-through
You do research to create things customers want to buy and reduce the risk of poor sell-through, but sometimes things don’t sell as well as you’d hoped. Then, it’s a matter of getting the cost back through discounts or improving sales by offering things that don’t sell as add-ons or freebies.
What if you could try other techniques to sell these items?
Let’s say you have that Shopify store we’ve talked about. After doing research on best-selling Amazon products in your niche, you decide to create your own [insert product type here]. You launch, but it’s not as hot on your website.
If you had a presence on FBA, it’s at least more likely you’ll have better results there, since it’s where you got the idea.
Another solution here is international markets. Cultural and other influences mean certain products fare better in other countries. Having a venue to sell goods abroad means more opportunities to sell merchandise that didn’t land at home.
5. Better product opportunities
Speaking of international and different types of buyers on different platforms, knowing what is selling where is a great way to expand the number of SKUs in your organization. Let’s pull a few examples together:
You gain a new customer from Amazon. When they open the package, they see a related product and notice it’s exclusively available on your site. The buyer must have it, and go right to your site. Just like that, they’re moving down your funnel.
After studying popular products in Latin America, you decide to launch a line exclusive to Central and South American countries on MercadoLibre.
4 Things to consider
1. Competitor awareness
The bigger you are, the more people know about you. Buyer awareness is fantastic, but competitor awareness isn’t. If you’re trying things (and succeeding), others will begin to emulate your success.
Whether it’s creating knock-off products or outbidding your ads, there are a number of ways competitors use to take what you’re doing for themselves. As you go multi-channel, there will be a larger number of organizations gaining interest in your techniques. It’s not something to stop you in your tracks. It’s more of a necessary driver to innovate constantly.
2. Rapid expansion and growth
That sounds like a good thing, right? But there is a level of unsustainable growth. With a shortage of workers here in the US, there is only so much you can do before you won’t have enough labor to complete those tasks.
Prepare for growth by:
Automating as much as possible through things like retail management software to better organize and ship inventory
Have a constant recruitment process to ensure you’re always on the lookout for quality talent, at every level of your organization
3. Collecting multi-channel payments
Expanding beyond the borders of your initial channel has tax, fee, and legal implications. This reality is especially true for international payments.
One solution is to open up a Global Account to accept payments in the currency of the country in which you sell products.
For example, an Airwallex account allows you to collect local currency payments on popular eCommerce platforms like Shopify, eBay, PayPal and more. All this with zero monthly fees and no minimum transactions. Our Global Accounts are fee-free to open and manage.
4. Paying international vendors
Expanding means more manufacturing, more international contracts and more payments abroad. Large payments and foreign exchange rates come with fees. Saving on these fees lessens the pressure on cash flow, improving the odds of success for your expansion.
Airwallex offers guaranteed low rates on forex payments in more than 30 currencies.
Ready to expand your operation?
The positives far outweigh the negatives when it comes to expanding into a multi-channel retail operation. Are you ready to move to other platforms?
If so, Airwallex can help. Sign up for our fee-free Global Accounts, Borderless Cards and affordable international payments today. Then get on the waitlist for our all-in-one eCommerce financial solution to take advantage of multi-marketplace analytics and more.
Why accepting payments smarter matters more than ever before