As an online retailer, you obviously have your own store. But what are some of the issues you need to consider when distributing your products and services through other online retailers?
1. Who are their customers?
Presumably some of them are the same types of people who do business with you. But could they also open up a new niche for you? Grandparents? The pink dollar? Curated gift ideas? Through their website, could you market to customers in other countries on special occasions that don’t apply in your country? If you normally deal with B2C customers, a retailer with many corporate clients may give you a slice of the lucrative B2B market. Examine where you found them; if you’re not marketing or advertising in that area, it may be a new opportunity. Ask how they market themselves. It will give you plenty of ideas to try a version of what they’re doing, perhaps on a smaller scale.
2. How do they promote you?
Do they have newsletters, Twitter, facebook, Pinterest or other social media areas featuring the newest suppliers? Do they run competitions? Find out how much customers contact the customer service team for more information about the products and services. You might consider treating their staff to a familiarisation with your product and service so they can be completely across it when customers query about your products or services. If they’re big enough, you may have to do this on a regular basis while you may only have to provide a sample or “famil” once (in a while) with a family-run website.
3. How do they charge you to be included on their website?
Some companies require upfront payment or administration fee for you to join and then may charge a commission on sales. Others simply charge a commission which can range from 10% to 30% or more. Before you sign up, grab your calculator and deduct that commission from your profit and then calculate a further discount of say, 25%. Can you still make a profit if they ask you to provide a good deal? Check if you have to pay to take part in any promotions, too.
4. How can you best maximise the distribution?
Do they vet each and every product? How easy is it for you to add new products as they come available or even update the images? Do they have a big name in the industry which would give you leverage to approach other distributors? Do they organise events? Workshops? Can you offer to provide any product if they exhibit at expos? What about prizes and handing out your brochures? How much coverage do they get in the media? Put your hand up for letting journalists write about their latest product/service. Be a good supplier and let them know about media opportunities too.
5. Exclusivity (or not) as a supplier
Can anyone provide your type of product or will you get exclusive coverage? You might notice a category you could belong in and realise you’re the only one of their type. This is great – as long as they’re big enough or specialised enough to send you sales. Is the exclusivity two-way? Do they frown on you joining anyone of a similar type?
6. Exclusivity (or not) by region
If they offer exclusivity by area, check first if this is by suburb, city, state, region or country. If you sell, say cupcakes online on the east coast, you may not mind if they represent cupcake bakeries on the west coast. What if you get bigger? How do they decide if you can distribute in new territories? Keep in mind that if you’re a solo operator, you could be knocked out by a national player with a bigger reputation.
7. Sales promotions
With the widespread use of daily deals’ websites by customers, many online retailers who represent a number of suppliers, now hold similar-style deals. Do you have to join in? Ask what happens if you don’t. Will your company be penalised in any way? I failed to offer a daily deal offer during Valentine’s Day – my biggest gift occasion of the year – for one agent and was excluded from the Valentine’s Day gift suggestions. Since my products are made for couples and parents, and can be, and are, sent worldwide, I was rather unhappy to hear my products were excluded because they “weren’t right” for Valentine’s Day. So my sales this year from that retailer were a third of what they were last year as a result.
What have you learnt from distributing your products through another online retailer?
Please share your comments below!