Options You Have Getting Your Business Online
Tuesday, April 14, 2020Eric Zegarski
Channels That Can Get Your Business Online and Selling
When it comes to getting your business online, there are several avenues you can take. You can build your own eCommerce store on platforms like Shopify
, and Magento
. Or look at getting listed on marketplaces like Walmart and BestBuy. These marketplaces have grown exponentially in the last couple of years. Amazon is another option with its 3 different merchant classes, but more about those later. Finally, eBay is still a viable option to get online, with 100s of millions of visitors monthly. Below we dive deeper into each avenue as well as the pros and cons of each channel.
1. Building Your Own eCommerce Store
Building your own eCommerce store allows you to do online commerce the way you want it. When you build your own store, you own your business as well as the customer. However, building an eCommerce store is not something that is overnight. Logistically, there is a lot of work that needs to be done in terms of choosing your platform, building your store and getting you fulfillment logistics in order. But in the end, you will have built an ecosystem that allows you to sell online your way.
Pros of Building Your Own eCommerce Store
Cons of Building Your eCommerce Store
- Owning the customer from purchase to delivery
- Building your own unique brand and shopping experience
- Building your own marketing and customer acquisition strategy
- Keeping more revenue in your business, marketplaces often charge “commission” fees per sale
- If you don’t have the inhouse tech knowledge, you might require assistance from an eCommerce agency, depending on the level of assistance, this can become a large added expense
- Depending on the nature of your business, for your site to have certain desired functionalities, you might require additional apps which can become costly
- You’re responsible for driving your own web traffic, therefore your traffic will be heavily dependent you’re your brand equity, online advertisements, and SEO
- You need to set up an infrastructure to handle product storage, shipping, and customer service
2. Using a Marketplace like Walmart or BestBuy
An online marketplace is an eCommerce site where the product sold are provided by third parties such as yourself. The transnational process is handled by the marketplace, but fulfillment and inventory management are done by the third party. You are essentially a drop shipper for the marketplace. The marketplace charges the merchant a commission fee per item sold. Most marketplaces have a fixed fee for each product category.
For some merchants, this is their preferred online strategy. For others it’s a key part of their multi-channel Commerce strategy. Walmart
and Best Buy
marketplaces have seen the most growth in the last couple of years. The marketplaces allows vendors like Walmart to diversify their online offerings. As a result, they limit the risk of having to take on inventory. Also, they don’t need to increase their fulfillment workforce, therefore, they can offer competitive pricing on their marketplace.
Pros of Using an Online Marketplace
Cons of Using Online Marketplaces
- There are no fees associated with being listed on most marketplaces, therefore you only pay a commission when someone buys your product online
- The commission portion is automatically deducted from the amount that is set to be paid to you, therefore it simplifies your accounting
- Capitalize on their web traffic, millions of browsers shopping for products just like yours
- You don’t need to send them inventory to hold on hand, therefore you limit the risk of unsold inventory being damaged
- They don’t offer fulfillment assistance via their network
- You can incur penalties for stock outs, therefore diligent inventory management is required.
- Commission fees eat into your profit margins
- Abide by their pricing rules or face being delisted, Walmart requires pricing parity across all marketplaces
- Becoming a vendor isn’t instantiations, there is an application process
3. Becoming a Vendor on Amazon
Right now, Amazon
is the king of online commerce. Ask anyone in the eCommerce industry about their opinion regarding Amazon and they’ll for sure deliver a passionate statement. Amazon is the gold standard in terms of shipment and fulfillment. They’re now set on revolutionizing physical commerce with their acquisition of Whole Foods and opening Amazon Go shops. Their marketplace remains their go-to shopping destination.
Amazon has 3 buckets that they classify their merchants under. FBM (fulfilled by merchant) is for merchants who are listed on Amazon, but it is their responsibility to fulfill orders. Amazon has specific guidelines as to how the fulfillment process must function. FBA (fulfilled by Amazon) is for merchants who have their product stored at various Amazon warehouses. When an order is placed, Amazon will ship the order directly to the customer. It is the merchant’s responsibility to replenish warehouse stock when Amazon requests it. Finally, Amazon Vendor Central is reserved for high volume merchants and big brands. Amazon simply buys a select amount of stock and sells it on their behalf to the customer. To be a FBM or FBA merchant, you must complete an application. You can only become a Vendor Central merchant by invitation from Amazon.
Pros of Being an Amazon Vendor
Cons of Being an Amazon Vendor
- Access to Amazon’s reputation
- Amazon boasts 100s of millions of Shoppers a month
- A large audience of people searching for and ready to buy products like yours
- Naturally you will see more sales without investing more in marketing or ads due to network effects of being on another platform
- Business is done Amazon’s way in terms of packaging and shipping
- Failure to meet their requirements will result in hefty fees and penalties, including the possibility of being de-listed
- Not everyone can sell on Amazon, must pass Amazon’s application process
- Just like other marketplaces, Amazon has a commission structure for FBM and FBA that might eat into your revenue
- As a Vendor Central merchant, there is little to no room for price negotiation
- Heavy competition from other merchants who sell similar products like yours for the buy box
4. Selling on eBay
Before the age of DIY eCommerce platforms, eBay was the go-to destination for merchants to launch their own eCommerce store. For many online shoppers, their first purchase was made on eBay. Today, millions of shoppers still head to eBay weekly. On eBay you’ll still find the traditional auction style listings along with buy it now listings. eBay is perfect for merchants who have those one of a kind items. It's also a great platform to liquidate any discontinued stock to bargain hunters.
Pros of Selling on eBay
Cons of Selling on eBay
- eBay still has an active audience, attracting 100s of millions of shoppers yearly
- Less restrictions than Amazon, you're allowed to use your own packaging as well as promote your business by including marketing collateral with orders
- Sell anything on eBay, unlike Amazon you do not need to apply to be a vendor
- Even though not as strict as Amazon, eBay still has regulations in relation to customer service and returns
- eBay is a destination for bargain hunters, therefore it might not be ideal for your brand
- You might face a lot of competition depending on your product category
Choosing the Right eCommerce Channel
No two retail businesses are the same. In the eCommerce ecosystem, most emerging brands start off with their own eCommerce store. After they branch off into other marketplaces. A lot of established national brands have been selling on marketplaces for years. These brands are just now launching their own eCommerce stores. The key to success with eCommerce is identifying where you would like to see your business grow. Then you map a roadmap with the right platforms that will get you there.
eBridge Helps with High Volume Commerce Via Integration
As an eCommerce business scales, the amount of behind the scenes work increases. Larger order volumes mean more products to ship, inventory to track, and packing labels to print. This translates to more manual data entry. eBridge eliminates the need for manual data entry. We have pre-built connectors for leading eCommerce platforms like Shopify
, and marketplaces like Walmart. Also, we have connectors for Amazon
. Our integration solution sends data bi-bidirectionally between your commerce platform and your ERP
. We even integrate with to shipping solutions like ShipStation
. Whether your goal is to scale and grow your own eCommerce store, or build a full multi-channel strategy, eBridge can help.