Many ecommerce retailers are finding it difficult to compete by selling solely on their own sites. Many have started listing their inventory on other sites, such as Amazon and Ebay (there are many others). This is multichannel retailing and it comes with a new set of problems and opportunities.
This article is the first installment in a series that addresses the typical problems of multichannel selling — and some of the solutions and alternatives.
The first and most important thing to understand is that when you are selling on a third-party marketplace, you have to follow the rules of that marketplace. Sites like Amazon and Ebay police their retailers, to maintain a minimum standard. Amazon, in particular, can be very tough and a few silly mistakes can get you banned.
Once banned, a marketplace tends to never let you return. So, prior to selling on any marketplace, conduct research, read forums, and generally understand the playing field you are entering. Every marketplace has its own quirks and rules. Stick to them and all should be well. Never break a rule just because you think it’s stupid or because you don’t agree with it. If you cannot adhere to whatever rules and expectations a marketplace has, don’t sell there.
Selling on more than one channel greatly complicates administrative and accounting functions. I’ll segment the problems into the following areas.
- Listing products on all channels
- Inventory control
- Order management
- Customer service
Listing products on all channels
Clearly it takes longer to list your stock on two or more sites rather than just the one. Further, the content may need to be different. This is something that an automated tool may omit. It may be something straightforward, such as ensuring you select the correct category for that item on that channel, or it could be adjusting the title to suit the channel.
For example I sell Doctor Who merchandise on my own site. If I list a “Sonic Screwdriver” on my site, the title may well be just that. But to list it on a general-purpose marketplace like Ebay or Amazon, the full title of “Doctor Who Sonic Screwdriver” is likely to be much more suitable.
Carefully crafted titles and descriptions, tailored for the channel, will improve your chances of your products being found and purchased. A simple cut and paste job may reduce sales. The problem is that if you have thousands of items, can you afford to spend the time crafting every one?
When you sell on channels like Amazon or Ebay, they expect you to dispatch the orders quickly. They expect you to actually have the stock on hand. You are dealing with seven sites if you sell on, say, your own website, Ebay, Amazon.com, Amazon.co.uk, Amazon.de, Amazon.fr, and Amazon.ca.
To be successful, have a good stock control system that always reflects any sale anywhere and ensures that you have a single stock level, which is available on all sites. Thus you never oversell.
Do you have the same price on all channels? Do you have higher prices on some channels where your competition may be less fierce? Do you let the lower priced channel burn through your stock at a lower margin if your higher priced channel is selling steadily? If you change a price on one channel do you want the change to be reflected on the others? Do you have different rules if some is “sale” stock or some is “limited edition” stock? Do you make sure that the prices on your own website (where you pay no seller commission) is lower than the other channels?
If you have 1,000 items and sell on 7 channels, then you have 7,000 prices. Do you have time or the inclination to monitor them all?
If you are selling on seven channels, you could have seven order management areas to log into — seven different format order numbers, seven different address layouts, seven places to mark orders as dispatched, seven pick lists, and so on. As soon as you get more than a few orders a day on each channel, this all becomes a nightmare.
For efficient processing, all orders from all channels need to be in a single system and all processing needs to be consistent.
The more orders and buyers you have, then the more customer service you have to provide. Amazon makes this difficult. For example, Amazon will not disclose the email address of a customer. Instead, Amazon provides an email alias and requires all communications to go through that alias. Amazon also requires you to reply to every email within 24 hours, irrespective of the day, hour, or time of year. If a customer emails you at one minute past midnight on Christmas day, Amazon expects you to reply before the end of Christmas day.
These are just a few of the problems you have by expanding your selling. Fortunately there are software solutions that can help. I will address these in my next post.
See the second installment of this series, at “Multichannel selling: How to evaluate solution providers.”