How To Maximise Profits When Selling Across Multiple Channels
Consumers nowadays are familiar with seeing brands sold across multiple channels. Whilst not all e-commerce businesses sell on every major channel, there are a growing number who are extending their market reach by offering their products on a range of platforms.
We see countless businesses making this move and, for some, multi-channel can vastly improve their profits. However, for others, whilst selling across multiple channels improves sales, their profitability and brand suffer. But why is this discrepancy and how can e-commerce businesses ensure that multi-channel sales are profitable?
In this blog, we’ll explore how to maximise profits when selling multi-channel and this starts with considering your strategy and then looking at how to face the common challenges that businesses tend to encounter, and how to manage multi-channel e-commerce efficiently.
1) Start by having some form of multi-channel strategy
Okay, don’t get put off by the word strategy. This does not have to be extensive or painful, however, it is incredibly useful to consider the reasons for selling multi-channel and how this is going to be achieved. Ask yourselves some questions: Who are your target customers? How much are they worth to you? And where are they?
There are many businesses who, when asked why they are on various platforms, simply reply that they thought it was ‘a good idea, because their competitors were’. This has some validity, but it is better to do an analysis of your customer base, their purchasing behaviour and preferred sales platforms, to fully understand the value for your business in being on multiple channels.
Whether seller fees, sales percentages, fixed monthly subscriptions or management costs, different channels incur different costs. It is important to look at these prior to jumping into each channel and make sure that they are the market place your potential customers would use.
Once you’ve established the channels that will be most valuable for your business, the next thing to consider is how to price for each channel and which products to sell. Then there’s up-selling and retaining your customer base, but that comes once you’ve worked out what you’re selling and where.
2) Consider your pricing per channel
It can be useful to think of each channel as a different interface with your clients that are separate, but still represent your brand. Consumers nowadays are used to searching across platforms for the best price and therefore how you price your items on each channel can determine your customer’s behaviour.
It is also essential to note that there are restrictions on how each channel determines pricing:
- Amazon Seller requires Price Parity (here is an interesting article by TameBay on this point)
- Amazon Vendor purchase at your wholesale prices
- eBay prices are set by you
- Your Consumer Website prices are set by you, and
- Your Wholesale presence, are again set by you, but must include a price incentive for your trade customers and be less than your B2C site.
Taking everything into consideration the common route for multi-channel pricing seems to be setting a consistent consumer price for both your website, eBay and Amazon Seller, and establishing consistent wholesale prices for your wholesale website and Amazon Vendor.
This makes sense, but does leave your own website presence looking redundant, considering that your consumer is more likely to purchase from Amazon given ease and familiarity. This is where your product selection is vital - whilst Price Parity is required for Amazon, your entire inventory is not.
3) Choose the products you will promote on each channel
Of your inventory, there are going to be particular products that sell well with particular groups e.g. some are popular with consumers directly, some with wholesalers. Knowing which products are popular with which sections of your target audience is vital to determining which products to sell on each channel.
From experience, your consumer website is where you offer your customers that ‘added value’ that they cannot get from your Amazon or eBay account. This may be particular products, product add-ons, product bundles or promotions. This helps your Amazon account work to increase your brand exposure whilst still giving keen customers a chance to further interact with your products.
eBay is an interesting channel, and given the nature of the customers using eBay (savvy, bargain hunters!), you may find this works well for: sale products which you need to shift swiftly, seconds, or returned items.
4) Up-selling cross-channel and retaining your customer base
This leads on to thinking about how each channel can help you towards the end goal of establishing loyal relationships with your customer base. A customer may purchase first from you on Amazon, receive a slip giving them a percentage discount on their next purchase on your website, and suddenly you have a repeat sale and a retained customer.
There are multiple ways up-sell. However, it is helpful to remember that no matter where you customer purchases your product from, they are still your customer and will still leave the channel with an impression of your brand. Therefore as far as you are able, it’s essential to control the experience a customer has of your brand on any given channel, and get creative about how to retain them. At base, collect their details and feed this into your regular marketing activities.
5) Find software to efficiently manage multi-channel sales
The moment that you start selling multi-channel, you will realise the challenge of managing your stock and sales across various platforms. Without software, this can be unmanageable.
Many businesses will start selling online using a cart and then face problems integrating this with their warehouse and multiple channel management software.
Before long, you can spend longer managing your software than your sales.
With this in mind, we developed the Khoo Commerce software, to help retailers manage their sales and inventory in one place. By viewing each platform (Amazon, eBay, your consumer website) as a different ‘channel’, the Khoo Commerce software gives you the flexibility to manage your sales across all channels or to dig into each channel and develop customised marketing for each market sector.
To close, careful analysis will help you maximise your profits when selling multi-channel
Making a profit when selling multi-channel is not guaranteed. Looking at pricing, products and up-selling can all help improve your sales whilst software will help you save time, which in turn reduces your running costs.
There are ways to assess how to manage multi-channel sales so you avoid common pitfalls and benefit from time-saving software which will help you maximise your profits.