10 May Is Your Business Suffering from Tunnel Vision? A Look at E-Commerce Channel Expansion
How many times have you heard the phrase, “Don’t put all your eggs in one basket,” especially when it comes to business? Diversification is a valued tenet of the industry, yet for e-commerce sellers it can sometimes feel like a single-platform game.
Naturally, when we think of e-commerce, Amazon is the first channel that comes to mind, and there are plenty of benefits to selling through their marketplace. It comes with huge market share, name brand recognition, the ability to pull any kind of data you want, and the resources to help you operate without ever needing to occupy a physical space.
But it’s not the end-all be-all for sellers. In an industry slated to see online sales hit just under $1.2 trillion this year, it’s safe to say there’s opportunity for expansion. For e-commerce sellers who found success on Amazon (or any other platform), leveraging other channels could mean broader brand recognition, added revenue streams, and greater security for consumer shifts… if they expand into the appropriate channels for their business.
For sellers who are ready to expand their e-commerce tunnel vision, we’re outlining (at a high level) the pros and cons of entering the most popular online marketplaces.
One of the best paths (in our opinion) to brand building is through Shopify. On this platform, you own your brand and you own the customer experience. Still, it does take a long time to build a following, so investing in a solid branding strategy before you enter the Shopify marketplace will be paramount to your success.
Comparatively, the fast path to revenue and profit is through Amazon, which is why most sellers start there and expand to other channels later. You might also consider that Shopify only provides sales data, meaning you won’t be able to analyze and leverage inventory data, marketing KPIs, etc. that you are able to access through other seller platforms.
If you’re coming from Amazon, Shopify could be the most logical next step, but starting here will be a long (though rewarding) road to profit. They break down a beginner’s guide here on their website, including a few how-to’s for taking advantage of some of Shopify’s more appealing features, like dropshipping and interface customization.
The long-time website we all know and very likely frequented (at some point) to browse hot commodities…is still a hot commodity! However, because of eBay’s transactional nature, if you’re interested in building brand recognition, expanding into this channel may not be in your best interest.
The eBay seller requirements are minimal, so it’s become a highly-saturated marketplace over the years. Buyers know this, and don’t often go to eBay to browse for innovation or a compelling product narrative. They search directly for the thing they need or want, and if you don’t happen to be that thing they’re already thinking of, you don’t have much of a chance of getting their attention.
If there’s a well-established market for your product already, eBay could be the place to be. If not, you might consider other channels that prioritize branding equity.
Social Media (Facebook and Instagram)
Leveraging their user data, Facebook does an amazing job of figuring out how to serve you the exact thing you’ve been considering purchasing. This makes its Marketplace and Instagram Shopping platforms very attractive forums for sellers looking to expand their reach and target specific consumers.
Selling on social media channels is somewhat of a catch-all; you’re offering your product in the space your consumer most naturally frequents, at the helm of a pre-established, customer-beneficial algorithm.
The requirements for selling through the Facebook Commerce system (which includes Instagram Shopping) are not far off from the standard user requirements you’re likely familiar with from your personal profile. In addition to a few domain verification protocols, they also have market compatibility limits that might hold you back if your operation isn’t based in the U.S., which you can verify here for Facebook, and here for Instagram.
Catering to the creative community, Etsy is a popular go-to for shoppers interested in purchasing unique gifts directly from entrepreneurs. For sellers, it’s a very cost-efficient marketplace, and because of its reputation for serving independent creators, it’s a great place to grow micro-niche brands. Etsy only charges a $0.20 per item listing fee, and you can take advantage of their Premium tools for just $10 per month, which includes advertising and listing credits.
That said, if you’ve scaled your operation and your product skews more practical than artisan, your consumer audience is elsewhere. They have strict rules about the types of products you can sell on their marketplace, which you can read more about here. In general, all goods must be “handmade, vintage, or a craft supply.”
One of the more recent entries to the e-commerce arena, Walmart offers massive opportunity with its brand dominance and scale. It’s a great platform for high-margin businesses to extend their brand reach and a prestigious place to be for an independent seller. Opposite of Etsy, they are most interested in developed, “compelling” product lines with utilitarian value that will appeal to their target demographic.
Walmart’s mega-status also allows them to set a high bar for success, making it a difficult marketplace to break into as an early-stage entrepreneur. Their thorough seller application will confirm (amongst other things) that you have a reliable, speedy fulfillment network, a history of A+ customer service, and reasonably low (competitive) prices.
If you’re just getting your feet wet, set your sights on the Walmart platform for later down the line.
Expansion isn’t for Everyone
There’s no shortage of opportunities to sell and be successful online. That said, sometimes it does make the most sense to stick with the one platform that you’re safely thriving on. Expansion could come with a myriad of pitfalls if you overshoot your business trajectory or stretch yourself too thin.
But for those who are ready and in a position to take advantage of multiple revenue streams, expansion to other channels can be a no-brainer.
Yardline Can Help
Beyond issuing the capital that fuels this kind of growth, Yardline offers strategic guidance to help you expand. We can troubleshoot issues on platforms, connect you to other players in the space (that can also be valuable resources and partners) and more to ensure your multi-channel expansion is a success.
To date, we’ve funded and advised sellers from Amazon, Shopify, Etsy, and more. We’re making it easier than ever for sellers to access the capital and insights they need to grow and thrive in any online marketplace (or two). Visit our website to learn more.