What is Multichannel E-commerce?
There comes a time when every e-commerce seller realizes there’s an opportunity for sales outside of their own website. That’s when most merchants start to eye channels like Amazon or Alibaba.
Amazon is ranked the #1 website for online-shopping traffic, so it’s understandable that anyone selling online would want a piece of that.
But here’s where these e-commerce merchants make two fatal mistakes: first, they limit themselves to Amazon, instead of considering other channels. And second, they immediately sign up for Amazon FBA (Fulfillment By Amazon) to handle their inventory and shipping. After all, what could be easier than simply shipping your stock to Amazon and allowing them to do your fulfillment while you sit back and rake in the sales?
Not so fast. That mirage of “convenience” comes at a hefty price.
FBA charges hidden fees that eat into your profits from every sale. Most sellers aren’t really aware of this until they get their proceeds from Amazon and see how high the charges are. By then, they’re committed and it’s too late.
Handing the fulfillment process over to Amazon also means you have little to no control over the customer experience. If a delivery goes astray, your customer blames you, not Amazon, even though there’s nothing you can do about it. As the seller, you don’t even have a way to track the package. You have no say in how your product gets packed and forget about custom branding or any other unboxing extras that create a powerful post-purchase experience.
Lastly, and probably most serious — using Amazon FBA limits the information you can get about your own customers, and prohibits post-sales marketing. In other words — they are Amazon’s customers — not yours!
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Show Up And Sell in More Places
The good news is, Amazon’s not the only game in town, and even a smaller e-commerce seller can benefit from selling through multiple channels. It’s time to explore real multichannel e-commerce: where customers can see and buy your product in many different places, not just one.
The advantages of multichannel e-commerce are many:
First, and most obviously, it gets your product in front of more potential customers. Different people shop on the various marketplaces they prefer because of their trust of the platform and strong loyalty programs.
It’s also worth noting that multichannel e-commerce gets you in front of the same people, multiple times. It’s common knowledge that people can require seeing an offer 7–10 times before they take action. Another factor is that customers will be at different places in their own buying cycle at any given time, from lukewarm “just browsing”, to white-hot (two days before Christmas or Mom’s birthday). Being in multiple marketplaces gives you the opportunity of catching them at the moment they’re ready to hit the buy button.
Another advantage of multichannel retailing is that it makes you appear similar to larger competitors. With more virtual shelf space, your product and company will get taken more seriously by consumers. It acts as a form of social proof.
Sell Smarter on Amazon: Skip FBA and Master Your Own Fulfillment
So does this mean you avoid Amazon as one of your e-commerce channels? Absolutely not! You’d be foolish pass up having your product on the 14th largest website in the world. But instead of using FBA, smart e-commerce merchants develop a solid game plan for selling on Amazon.
When you take charge of your own fulfillment, instead of defaulting to using FBA, you’ll get all the benefits of selling on Amazon with none of the downsides.
You’ll retain control of the process, and how your customers are treated. Even more important: you’ll also have better direct access to and information on your customers, instead of abdicating that vital relationship to Amazon. With repeat customers spending over 60% more than first time buyers, you want to be able to sell to them again!
Also great to get customers coming back: add your own timely promotions, coupons, and surprises right in your package. You can’t do this if your use Amazon FBA, unless you somehow build them into your product, which severely curtails your flexibility and ability to make seasonal offers.
Managing your own fulfillment does not always mean you should be packing and shipping your items yourself. Far from it. What you want is a third party logistics partner (3PL) that works with companies your size, integrates with as many channels as possible — including Amazon — — and allows you to maintain maximum control over the customer experience, before, during, and after the sale and delivery of your product, no matter what the platform.
The more places consumers can buy your product, the more they will buy… but multichannel selling doesn’t have to multiply your costs or the complexity of your business.
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SnapShip is a technology-centric fulfillment solution built to solve the challenges of multichannel e-commerce, subscription boxes, and crowdfunded projects. Our platform was built entirely in-house to give our clients unparalleled control over their fulfillment. We pride ourselves on relentlessly innovating and evolving our technology, operations, and product offerings to give our clients the competitive edge they need to succeed and compete on a global scale.
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