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E-commerce Strategy for Brands

What Partnerships You Need In E-commerce

E-commerce With Coffee?! Podcast guest Jim Loden explains

Partnerships are what tap new possibilities for even the biggest brands. TikTok and Shopify partnered to expand their audience and influence. Taco Bell brought new and instantly addictive flavors to their menu by partnering with Doritos. Apple and Mastercard partnered to bring the world of ApplePay and drive the mobile wallet industry forward.

Not all partnerships make headlines. In fact, the most influential partnerships are those that enable a brand of any size to move forward where they otherwise wouldn’t.

Brands selling on e-commerce are faced today with a race to a finish line that seems to continually be moving further out. Everyone wants their sliver of the e-commerce pie, but split four million ways, no brand will get so much as a morsel unless they move quickly.

Will your e-commerce brand benefit from a high-profile partnership like an affiliate or influencer? Or will it benefit more from a “behind-the-scenes” partnership where a drop shipper or wholesaler helps navigate today’s omnichannel waters? Maybe your brand could even partner with other e-commerce businesses — the possibilities are many.

This new episode of E-Commerce With Coffee?! features Jim Loden, Vice President of Sales at Petra Industries, which is one of the wholesale distributors who’ve seen what specific partnerships do for brands.

Jim’s insights in this episode spell out what partnerships e-commerce brands should prioritize, and what they face if they don’t.

Jim Loden’s Take on Partnerships

It comes as no surprise that brands should prioritize the most strategic relationships first. How, though, do they determine which those are?

Jim says that how brands go to market is the first place to look for partnerships. Without solid footing at launch, a brand could be set years back in correcting the consequences.

Let’s say your brand is new to e-commerce. You see this big fish marketplace, Amazon. It’s natural that you’d think to sell there first. You do, however, plan to sell on Target.com in the near future.

If you navigate those Amazon waters by yourself without any sort of strategic partnership (or worse, have the wrong partner), you’ll see swift (and negative) impact on:

  1. Your margins
  2. Your brand reputation

Without a strategic partnership to teach you how to position yourself on Amazon, you’ll also have a hard time getting your products on Target.com when the time comes.

Here’s what happens: Amazon’s “thing” is “stack it high, watch it fly,” meaning their algorithm drives the sale of products based on prices and how fast they get products to the end-users. This is great for fast sales — and Jim says that sales on Amazon are pretty instantaneous.

If you don’t partner with the right distributor or consultant who understands Amazon nuances, however, or Vendor Central vs. Seller Central, you’re in for a world of hurt when you try to sell on Target.com. Target will look at your Amazon listings and say, “we need a 20% differential to meet our margins thanks to your prices on Amazon.”

You can’t be mad at Target, either. E-commerce is inherently more competitive than brick-and-mortar retail because users can bounce away to check products on another site with zero effort. It impacts how consumers shop in-store, too. Even products sold on shelves are subject to consumers pulling out their phones to price-check on Amazon.

For this and other reasons Jim gets into during the podcast, it matters who you partner with.

Ask yourself: who can both manage and teach you this “e-commerce thing?”

Every channel you want to sell on has different requirements, different expectations, and different shipping programs — and yet they’re all part of the same ecosystem you build for your brand. The most essential e-commerce partner, thus, is the one who helps you navigate those waters.

Internal Partnerships

It’s not just external partnerships that matter. Jim talks on the podcast about how to get your brand’s stakeholders on board, which is a necessary but sometimes challenging step.

Your company presidents, board members, or investors will already understand that e-commerce is important. Pitching the importance of these key partnerships, however, is not as self-evident for some of them to understand. Some might see a relationship with a distributor as a parasite to profit margins.

There are two powerful points you can make to help brand stakeholders see the value of these partnerships:

The nature of the market today requires a shorter-term strategy. We don’t look as far forward as we used to because things are changing too fast. Any major shift (like a global pandemic) can change or accelerate market trends in unanticipated ways, and a five-year business plan could be totally undone whereas a one or two-year plan is more easily adjusted.

2020 saw 10 years of growth in e-commerce in one 12-month period. Brands who had just launched their 2020–2025 strategic chronogram, therefore, had a lot more scrambling to do by the end of the year than brands who had only planned 2020–2021.

Strategic partnerships fit organically into shorter-term plans because they bring constant analysis. Considering how fast today’s market is moving, the only worthwhile analysis is continuous analysis.

Second, the right partnership will improve your adaptability to how (and where) customers want to shop. Getting onto Amazon isn’t enough. You have to launch to Amazon with an appreciation for what consumers today want from their shopping experience.

“If you don’t let the consumer shop the way they want to, they won’t buy from you,” Jim says. For instance, a 20-something consumer might see it as a nuisance to go to a physical store any more unless the product is absolutely needed that very minute. Do your shipping options account for that?

Shipping expectations, in particular, have become one of the driving factors for a brand’s success or failure in e-commerce. Jim talked about this extensively during the interview. As far as convincing stakeholders, the selling point here is that launching to e-commerce has to be done with the intention to meet consumer demands, so you can actually sell your products.

Per Jim, “if you choose not to participate in the e-commerce world, you either have very deep pockets or you’re not going to make it.” There aren’t many arguments more compelling than that.

Another Key Partnership: Dropshipping

“There’s nothing more important than having and surrounding yourself with the best partners.” — Jim Loden

If you’re only going to ship 30 or 40 items a day, you can have a couple of people at your local warehouse do this.

Not a lot of people get into the business to do just that.

For brands selling hundreds or thousands of products a day, dropshipping is the go-to solution for a long list of sellers and business models. Any “how-to” article or infographic you find on the subject whose content is more than two years old, however, will be wildly out of date.

Dropshipping has changed as consumer expectations have changed.

The expectation five years ago for any consumer-facing sales channel outside of Amazon was: “if it gets there in four or five days, it’s fine.”

That’s not true anymore. Today, consumers have the expectation of two-day shipping as a baseline, and the race is on for sellers to stand out with one-day shipping.

The biggest change to the logistical side of things (and, therefore, the pricing brands have to consider as a result) comes down to the size of the box that brands ship in. Until very recently, it was all about the weight of the box. Today, freight planes and 18-wheelers are maximized instead for the number (and therefore size) of boxes they can fit in. The smaller your box, the more cost-efficient it is to ship.

For example, you can two-day ship an iPhone for three or four bucks, even though that iPhone is 800 dollars.

Or, you can ship an antenna for 80 bucks, just because the box is so long.

There are engineers sitting at UPS and FedEx right now calculating how many boxes can go on each truck or flight. If you don’t fit into that equation, there’s a premium price to ship your product.

This is where another key partnership comes in for brands moving to e-commerce. A drop shipper enables your brand to meet consumer expectations with reliable and faster delivery without the added personnel and fulfillment required by you.

New (and Multiple) Channels to Reach Your Audience

If you already have an online store or a handful of products listed on Amazon, have you reached your limit of the sales you want there? Probably not. Adding your products to new sales channels is the go-to solution, because it’s also what today’s consumers expect.

The “multichannel” e-commerce experience is broken down into two sub-strategies:

  1. Multiple sales channels
  2. Multiple content and marketing channels

On the podcast, Jim talks about the multiple sales channel strategy and how key partnerships make that possible.

We already touched on how that first, core partnership with a consultant or wholesale distributor will help you navigate the waters of product data requirements on Amazon, Target.com, and other channels.

Now, the question is what partnership will make implementing that strategy feasible on the back-end.

Where Jim and his team at Petra handle the strategy and outline the shipping and product data requirements, actually aggregating, cleaning up, optimizing, and preparing product data for each sales channel rests on your brand.

The sponsor of E-Commerce With Coffee?!, Amber Engine, saw the writing on the wall: in the fast-paced world of e-commerce, brands who couldn’t get their data “Ps and Qs” ready for new sales channels in time would miss the boat.

Amber Engine is a self-professed fanatic of e-commerce. Their software solutions have upended outdated processes that aren’t friendly to e-commerce, namely their new-gen product information management software (PIM).

One buzzword in the software world these days is the “stack,” or the ecosystem of software that your brand uses to operate. Each piece of that software is backed by a team of believers in that solution. If your brand sees those relationships as partnerships instead of client-and-seller relationships, you’ll tap a wealth of expertise that will deftly move your brand to the front of the e-commerce pack.

These partnerships are what make or break a brand’s launch to e-commerce.

In this episode of E-Commerce With Coffee?!, Jim Loden speaks knowingly to where we’ve been and where we’re going. Listen to the full episode to hear verbatim what he says on each of these topics, plus his take on personnel needs in e-commerce, profit margins, and why some products just don’t sell.

Find the full episode here.

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