Diverse sales channels, or multi-channel selling, can help you reach more people and turn them into paying customers. With multichannel selling, you can diversify your revenue and reach new consumers easier. And, most importantly, it pays off.
This article will help you understand multichannel distribution as well as bring you 5 choices of eCommerce sales channels so you can start growing your business with confidence.
Understanding the multichannel distribution
Multichannel distribution is a system of one or more sales or marketing channels via which retailers offer their items in order to create a bigger customer base as well as reach a larger number of customers.
Merchants who use multichannel distribution sell their items through a variety of channels. If you want to offer wholesale teas to cafes, you may sell bespoke teas on your eCommerce site, Etsy, and a local shop. Or, you may resale white-label items on Amazon, Walmart, and Google, among other options available to you.
With multichannel distribution, the actual effort is in launching and managing between different channels. This article will focus on marketplaces because they are the most popular and have the lowest lift among eCommerce channels.
Selling on Amazon – The biggest marketplace in the world
Unless you sell on Amazon, you’re missing out on a lot of sales opportunities. Amazon is the world’s largest online marketplace, and 63 percent of all product searches start there. On Amazon’s marketplace, third-party sellers account for over half of all sales.
Vendors on Amazon have a choice of two pricing levels. Its plan, which costs $0.99 per product sold, is aimed at customers with lesser sales. The Professional plan costs $39.99/month, and there is no restriction to the number of goods that can be sold under this plan. In addition, every seller pays a referral fee for each product sold, which typically varies from 8 to 15 percent of the selling price.
Whether you’re selling proprietary or white-labeled goods or reselling someone else’s, your experience on this marketplace will rely on your Amazon business model.
Most likely, resellers will have to compete with other companies that offer the same goods as they do. There will be just one listing in this scenario and all goods will compete for the Buy Box, Amazon’s default payment method. As a consequence, sellers of unique items only have to compete in search results.
What’s the point of selling on Amazon? 80 percent of Amazon sellers make a profit, and 74% make more than $1,000 each month in sales.
You will need to spend time improving your Amazon product listings for discoverability, as well as employing sponsored advertising. To be eligible for Prime, you’ll need to offer rapid shipping or use Fulfillment by Amazon (FBA).
Would it make sense to sell on this platform? Yes, Amazon is definitely worth a go. Amazon’s flexible seller plans and extra development programs, such as Sponsored Products, make it easier to build the channel in a way that is both sustainable and profitable. Small sellers that require fulfillment services might also benefit from FBA. Multichannel fulfillment is even offered.
Google Shopping: Super high-traffic channel
Those who don’t start their product search on Amazon are more inclined to use Google instead, according to the study. Search engines account for a little over half of all product queries, with Google accounting for 88 percent of all search traffic. To capture this traffic, Google Shopping offers a low-cost and low-lift channel.
The phrase “Google Shopping” might be misleading because it encompasses two services. A Google Shopping ad is an example of this. It is a pay-per-click commercial that appears in search results.
What we’re talking about is Google’s shopping comparison engine.
Here, shoppers can search, browse, and even buy products without ever leaving Google.
Your items can be listed for free on Google’s comparative shopping engine. While the search engine can locate your product details via your website, adding your items to Google Shopping and using Google Shopping Actions (also known as Buy on Google) to help customers make purchases on Google will give you better results and allow you to earn more sales.
When it comes to shoppers, 51 percent of them investigate online purchases on Google. A quick checkout experience and streamlined route to buy with Google Shopping help you get in front of those customers. It costs you nothing if someone buys your goods through Google’s organic rankings because there are no commission fees.
As with organic listings in Google search results, organic listings in Google Shopping take time to appear on the first page. If you want to convert this into a sales engine, you’ll need to spend some time and money running Shopping advertisements (which are paid).
Would it be wise to sell on this platform? You have nothing to lose by putting your items on Google Shopping if you’re currently selling on another channel, such as Amazon or your eCommerce site. Using Google’s infrastructure, you can easily add your current product feeds. But you must fulfill Google Shopping Action’s requirements for shipping, payment processing, and customer service expectations to be eligible.
eBay: Anything can be sold here
In terms of brand building, eBay is a more versatile marketplace than Amazon or Walmart, with 183 million active buyers globally. With configurable HTML templates, eBay provides sellers with more creative control over their listings than any other major eCommerce platform.
ebay.com is still known for its early days as an “online flea market” although it now accepts sellers of all types, not only auctions for old or valuable items Whoever wants to sell on eBay may do so, from yard sale vendors to major companies.
While other markets have simpler fee structures, eBay’s is a little more complex. A listing fee and a final value fee, both of which are dependent on your product category, will be charged for each eBay transaction.
You receive 200 free listings on eBay, and after that, you pay about $0.35 for each listing. Note that you do not have to create a listing for each item. As a rule of thumb, selling fees are around 10 percent of the ultimate selling price of the goods. Upgraded listings are available for an extra cost, but they are not required.
Moreover, eBay provides several membership options that allow you access to extra improvements and features, in addition to reductions on its basic seller price.
Amazon has a lot more direct competition, but eBay doesn’t have nearly as many restrictions on categories and branding. Sellers’ satisfaction with customer service, communication, and ease of use made eBay the top marketplace.
Sellers on eBay face a unique set of challenges because eBay doesn’t have the same reputation or traffic as other marketplaces. As an example, neither Amazon’s brand nor Google’s user experience benefits you. For example, your seller feedback score, as well as your shipping and return procedures, are important aspects in establishing confidence in the internet marketplaces.
Does this channel make sense for your business? For those who want to dip a toe in the water of marketplace selling, eBay’s costs are far lower than those of Amazon. Additionally, it’s wonderful if you sell goods that aren’t the norm. Everything from homemade to bulk products may sell successfully on eBay.
Walmart: 2nd marketplace with less competition than Amazon
Walmart has the highest brand awareness after Amazon for an online marketplace and delivers many of the benefits of Amazon—with lesser competition and greater flexibility.
Walmart’s marketplace is much like Amazon—third-party merchants compete with one other and Walmart itself. Like Amazon, Walmart’s marketplace will allow identical items to share a detail page, forcing them to compete for Walmart’s Buy Box.
No seller fees—that’s a big plus for Walmart’s seller community. On each transaction, you just pay a referral fee to the affiliate. Referral fees and seller fees are charged by Amazon.com. There are referral fees that range from 8% to 20% depending on the product category.
To sell on Walmart, you’ll need to fill out an application and wait for approval. Whether or not you are eligible depends in part on your eCommerce track record.
Why sell on Walmart: Retailers should choose Walmart since it has the same reputation and brand awareness as Amazon, but without the same prices or competitors. To compete with Amazon in the client acquisition market, Walmart offers programs such as Walmart+. There are programs like WFS that offer the same benefits as Amazon Fulfillment Services (FBA) at a cheaper cost.
The biggest obstacle to selling on Walmart: Unlike other marketplaces, you have to be established elsewhere before selling on Walmart. If you wish to sell at Walmart, you’ll have to prove that you can fulfill the company’s rigorous shipping and service standards. Moreover, it does not provide you with any chances for branding (not even a store page, like on Amazon).
Would it be wise to sell on this platform? It’s a wonderful way to expand your business if you’re currently selling well in one or more channels. Useful if you currently provide excellent customer care and free shipping to your customers (or choose to use WFS). Nevertheless, for newer vendors, Walmart’s strict requirements may not be worth the effort.
Etsy: Where you can sell handmade and vintage items
Handmade and antique items may be found on Etsy, an online store. Approximately 45.7 million active customers and more than 2.5 million active sellers offer hundreds of various goods, ranging from craft materials and handcrafted presents to antiques, on the site, according to its website.
It is common for Etsy sellers to create online stores that showcase all of their items, a personalized banner, and information about their business. In addition to appearing in Etsy searches, listings in your shop are straightforward to advertise outside of Etsy. Marketing on social media, particularly Instagram, is quite successful for many Etsy businesses.
Sellers on Etsy will be charged listing, transaction, and payment processing fees.
- Listing fees. There are listing costs to pay. Each listing on Etsy costs $0.20. This charge only applies to the listing itself, regardless of the number of items in the listing’s inventory. If you want to keep this listing, you will need to renew it every four months.
- Transaction fees. Fees for completing transactions. Five percent of every sale you make on Etsy is charged to you as a fee. Etsy charges a 5 percent shipping transaction fee if purchasers pay for shipping.
- Payment processing fees. There is a charge for processing payments. When selling on Etsy, merchants must use Etsy Payments, which allows customers to pay using popular platforms like PayPal and Amazon Pay. In exchange for each sale, you’ll pay a variable processing fee (dependent on your location) for this service.
Why sell on Etsy: When it comes to buying and selling unique and handcrafted products, Etsy is the place to go! As a result, it’s easy to open up shop and start selling to a large audience of people. In addition, the Etsy audience is more specialized than that of Amazon or eBay.
The biggest challenge of selling on Etsy: When you sell on Etsy, it might be difficult to identify yourself as a company. People prefer to refer to a product as “from Etsy” instead of “from NovelTea Tins,” for example. It has also increased the pressure on vendors to give free delivery so that they may rank higher on Etsy’s search page.
Does this channel make sense for your business? It’s not too late to start your handmade company on Etsy. As a secondary channel, Etsy is best suited for those who already have a strong following and brand outside of Etsy. If nothing else, the channel’s visibility and simplicity of use make it worthwhile to check it out at the very least. Watch your margins carefully to make sure your fees are affordable.
To effectively implement a multichannel distribution system, you should manage your business as one entity, rather than offering distinct customer experiences on multiple channels to your customers. Hope that this article can help you effectively start growing your business.
Managing all channels at once can be hard, but you can try a multichannel selling tool such as LitCommerce, we will help you manage everything from just one place.
If you need more info, leave us a message, we are always ready to help.
Also, join our community for more eCommerce tips and news!