Emily is a Marketing Executive at Eastside Co, one of the leading Shopify experts internationally. Eastside Co design, build and market beautiful e-commerce stores for a multitude of different industries.
The term ‘sales channel’ covers a number of different types of distributers, resellers, VARs, websites and retail stores. In today’s modern and digital age, it’s no secret that having an online presence is crucial for sales and thus success which is why most retail stores will also opt to sell via an online sales channel as well or even just sell purely online and forget about a physical store.
By using the internet as your primary sales channel, you can gain a number of advantages:
Building a website is cheaper than opening a physical store
You have the potential to reach customers online all over the world
Customers can shop with ease and comfort from their own homes
Customizing sales and after-sales experiences is easy based on their last sales and preferences
Even if a consumer doesn’t buy from your site immediately, they may still use your site to do research or to find inspiration and mention you on social media or to their friends.
So, the big question is: do you own your own sales channel such as an e-commerce website, or do you sell your products via other sales channels such as Amazon, Etsy and eBay? There are advantages and disadvantages to both approaches which is why many e-commerce store owners choose to use their own sales channel as well as other marketplace distributors.
Advantages of having your own e-commerce site:
You can have near complete control of your design, marketing and SEO
Having your very own sales channel allows you to be in control of just about everything on your site, from layout and design to branding. You can change your policies when you want and don’t have to worry about external regulations or suddenly having your store shut down. There’s a wide scope for SEO development and exciting marketing that just isn’t possible through other sales channels.
There are fewer on page distractions for your customers and your competitors are eliminated
Most importantly, this means that your competitors cannot be seen right next to your products. You won’t lose sales to your competitors who are selling at a lower price and you can actually increase your prices which results in bigger profits.
There are no listing or selling fees
Marketplace fees can really eat into profits. When you sell on your own website, all the money you make is yours! Although, it’s important to bear in mind that if you use PayPal, you may have to pay their fees.
Media and customers may take your brand more seriously
AS LONG AS YOUR SITE IS WELL DESIGNED! If you have put the required time and effort into your design and branding, consumers will take you more seriously than they would seeing a few uploaded pictures on Etsy. However, if your site looks shabby, unprofessional, lacks functionality and is outdated, an alternative sales channel will benefit you.
Disadvantages of having your own e-commerce site:
Initial lack of traffic
When first starting out with a new website, it’s fairly likely that you will have low levels of people coming to your site – this will take time to grow. Once you establish a loyal customer base and new buyers start coming to your site through effective marketing and SEO, you will see a drastic increase in traffic and conversions.
Lack of Support and Help
When you run into problems on Amazon, you can easily get in touch with their support team and have your issues fixed; when you sell on your own website, you will be faced with problems that you must solve yourself. However, if you use a good website builder platform such as Shopify, you will have complete technical support and someone to talk to if you need advice on any aspect of your business. Similarly, if you would like the personal and bespoke aspect of your own store whilst still using a great website builder, we recommend heading to an external agency who deal with the platform such as Eastside Co. They are Shopify experts who add a personal touch to the sometimes daunting experience without compromising on professionalism, functionality or design.
Initial start-up costs
When first setting up your website, you’ll need a certain amount of money but it’s probably significantly cheaper than you anticipated. Unless you head to a web design agency to make your website from scratch, you can get your own store up and running for hardly anything at all – most people tend to go to a design agency to for customization, improved functionality and bespoke features later on.
It’s important to know what you’re doing
You don’t have to be a pro at photoshop and a wizard at SEO but if you’re not familiar with web design, trying to make your own site can be disastrous. As well as making your store look good, there is risk of falling victim to usability pitfalls such as making sure you have an easy-to-use shopping cart and have a solid SEO strategy.
You will have more marketing tasks to carry out
When selling through an incredibly popular and widely used sales channel such as Amazon and eBay, your products can be featured on their site and get the word out about your store. This means a comprehensive marketing plan with heavy social media presence, engaging and SEO optimized blog content and even fliers and prints out will be necessary.
Owning your own sales channel is important for growing your company, improving brand awareness, profitability and credibility. However, there are aspects of purely only having your own site as your sales outlet that can be significantly helped by the use of other sales channels; although there are drawbacks to them also.
Advantages of using other sales channels besides your own:
The more sales channels you use, the more customers you can reach
It’s not rocket science – the more you online exposure you have through whatever means, the more people will see your products. However, the more sales channels you use, the more money you have to spend on them.
Some customers will only buy from large suppliers
This means that if you don’t use well known, credible sales channels, you could be missing out on a group of potential customers who may otherwise not buy from you directly.
The ultimate attraction to selling on marketplaces such as Amazon, is the scale of their online presence. Amazon draw in nearly 85 million visitors monthly – that’s a huge opportunity to sell! Sellers in fact report an average of 50% increase in sales after joining Amazon Marketplace.
Consumers don’t head to Amazon or eBay searching specifically for your store but they may well be searching for your products, or will discover your products. Once a sale is made, there’s a fantastic chance to repeat business through attentive customer service and quality products. This rings especially true for products associated with a hobby such as sewing or fishing – customers may very well return to buy the same thing over and over.
Marketplaces (like Amazon) are all about strength in numbers – this rings true for physical marketplaces such as shopping malls and farmers’ markets as well as online marketplaces. Their potential to offer huge variety attracts a large number of customers who prefer an all-in-one shopping experience. Online marketplaces also boast the ability to offer a single-stream check out and fulfillment support which results in a seamless customer experience.
Disadvantages of using other sales channels:
First and foremost – pricing
There is percentage to pay on every product you sell when selling through a marketplace. This is potentially a big drawback that can put off a number of sellers. Click here to find out more about Amazon pricing.
You need to have a thorough read of your contract to check whether there is exclusive or sole source territories/countries and what the policies for returns are as well as price protection, stock rotation and termination handling.
Being seen as a commodity
On these sales channels, you’re mainly a commodity. You’re also competing with Amazon directly and have a lack of control on your products. Customers rarely see the vendor when shopping on marketplaces which disconnects you from the customer.
No control over branding
Unlike having your own site, there aren’t very many branding options – you only really get to choose your products’ photos and text description.
You can’t collect buyers’ email addresses or remarket
On your own site you are able to set up email newsletters from gathered email addresses as well as re-marketing to previous customers and send product sales emails.
Lack of customer loyalty
Customers are loyal to the marketplace, not your brand which strips you of the ability to sell/cross sell or create much loyalty although as previously stated, if they’ve had a good experience, some customers will keep coming back for hobby related products so still sell to encourage loyalty!
Having your own e-commerce website is key for your brand, establishing yourself as a professional company, for utilizing fantastic marketing strategies and getting yourself ranking on Google. We strongly recommend having your own site before opting to sell on a marketplace so all your eggs are not in one basket and you can grow the business exactly how you want.
However, using an alternative sales channels alongside your own website is a fantastic way to boost sales and improve your exposure. Using a variety of different sales channels can easily make your business more successful, although can carry several complications. In order to minimize complications, you need to ensure that the customer experience is as good as it can be, regularly review how each channel is doing and look how you can support the channel.
If you would like an e-commerce site built, or help with your site’s marketing, say hello to the Eastside Co team.