Smart Analysis: Dealing with the Jungle
You are wondering if you should start selling online or you would like to change the way you do it? With what to begin? Let’s start with the basics.
There are two possibilities to sell online:
intermediary platforms that connect retailers and buyers.
Which are their advantages?
- Visibility: The marketplaces are wellpositioned on search engines. Given a certain audience to reach, marketplaces are a much cheaper option compared to proprietary platforms.
- Pent-up Demand: Through marketplaces it is possible not only to search by brand but also by product. This increases the probability of being found by those who are looking for a specific product but do not know (yet) your brand.
- Fast and Easy: compared to proprietary platforms, marketplaces represent a much more efficient solution in terms of time to market and operating costs after entering.
What about downsides?
- Little or no interaction with your customer. It is very difficult to activate even basic strategies such as loyalty programs or product customization.
- Intense competition: Which leads to the risk of high volatility in sales caused by little or no change in your sticker price.
- Hard to stand out: Thus risking the brand losing personality, unless you implement corrective measures such as stunning packaging or flawless customer caring.
2. Proprietary e-commerce
A 100%-owned platform through which a firm can sell its products.
- Customized offering: considering communication, web site layout, delivery times, payment methods,
- An intimate relationship with your customer: enabling enhanced branding, loyalty programs, redirecting customers to physical stores, et cetera.
- Tailor-made Promotion: You will be free to decide when to advertise your platform. Indeed, when you are selling through marketplaces, there may happen temporal misalignments (e.g. Amazon promoting Black Friday in November is pointless to swimwear sellers)
- Time to market and startup costs: personal e-commerce requires time to be designed and tested. Consequently, this time will generate higher costs. Sellmasters offers affordable solutions which are implementable in the short term. Contact us if you are interested.
- Lack of Visibility: your proprietary e-commerce might end up into Google’s second page. In that case, there is the need to do SEO to recover positions, but it implies additional costs.
- Activities to be carried out on your own: forms, logistics, payment systems and much more (i.e. additional costs and dedicated HRs).
Million-dollar question: which is better? Generally, it depends on turnover (if high à Proprietary Platform), the customer you serve (B2CàMarketplaces), your end-goal (revenues or profits?)
There is no right answer. We study our clients, and we consult with them about which is the best option. If you are interested, fill in our 1 minute form.
Assuming your fit are marketplaces, a further question arises: which marketplace? Amazon, Ebay, Zalando, Farfetch, Rakuten, Spartoo, the list is long. They differentiate themselves considering their catalog’s extension (generalist vs specialist), their audience (Business vs Retail), delivery options, operating costs, payment methods, commercial policies.
It is easy to get lost in this bush.
Not to mention that we are still talking about the selection phase. How do you choose the sticker price? Cost-based methods or competitive benchmarking? Where should you enter? Which marketplaces are better in terms of growth opportunities? How would you assist German-speaking customers? How do you optimize keywords with which to describe products?
Long story short, the key concept is that it is practically impossible to effectively market online, especially if you are new to the web world.
We are aware of that, so we would like to help you. We will help you without asking anything in advance or periodically, just a percentage of your success. We bet on our customers’ products.