For ecommerce businesses, the strategy of selling across multiple sales channels can provide a pathway to greater growth and profitability.
Multi-channel ecommerce is becoming increasingly popular, with businesses today – on average – selling their products across 3.2 channels.
Why is multi-channel selling such a powerful strategy for ecommerce businesses? Because it enables you to maximize:
- Customer acquisition: The majority of online shoppers today – 86% according to recent data – shop on at least two sales channels before making an online purchase. Businesses must be able to meet these shoppers wherever they are, maintaining a presence on a variety of channels. Simply put, the more channels your ecommerce business lists and sells your products on, the more opportunities you have to reach shoppers and convert them into customers.
- Business expansion: Multi-channel selling allows you to utilize the scale and reach of new channels – including marketplaces, such as Amazon.com and eBay, and social media stores on Facebook and Instagram – to engage new customers and expand into new markets.
- Revenue growth: By reaching new customers and tapping into new areas of the market, multi-channel ecommerce can fuel revenue growth. Recent research shows that multi-channel selling can increase revenue by as much as 38% with one additional channel, 120% with two additional channels, and 190% with three additional channels.
For these and other reasons, a growing number of ecommerce businesses are pursuing a multi-channel ecommerce approach.
Although this strategy can unlock opportunities for growth, it can also unleash complexity and challenges across your business operations – especially when it comes to logistics processes such as order fulfillment and inventory management.
That’s why many companies engage third-party logistics (3PL) providers – such as Amazon Multi-Channel Fulfillment (MCF) – to help them fulfill orders and ensure a first-class customer experience across all the channels they sell on.
In today’s omnichannel retail landscape, there are so many ecommerce channels to choose from – including ecommerce marketplaces, brand websites, and social media stores. But how can you choose the right online sales channels for your business?
In this guide, we examine the different types of ecommerce channels that you can sell on, explain how to choose the right ecommerce channels for your business, and highlight how a 3PL can help you drive growth across all the channels you sell on.
Broadly speaking, ecommerce channels can be divided into three main categories:
Many brand websites today are built on ecommerce software solutions such as Shopify, BigCommerce, Wix, and Adobe Commerce – which can help simplify the process of building and managing your online store.
Perhaps the main reason why brand websites are becoming increasingly popular is that they allow you to maintain complete control over:
- Your brand’s presence and positioning.
- The shopping experience for customers from online browsing and checkout to delivery. For example, if you add Buy with Prime to your website, you can offer Prime shopping benefits on your site and convert new shoppers with the trust of Prime, the promise of fast, free delivery, and a checkout experience that millions of shoppers trust.
- The selection of products from your catalog, pricing, and promotions you want to offer.
- Your customer data, which you can use to establish and nurture direct relationships with shoppers.
The majority of these ecommerce marketplace sales – 77.5% according to recent research – come from third-party sellers like you. Indeed, ecommerce marketplaces provide an immense opportunity for independent ecommerce businesses to accelerate revenue growth.
By selling your products on an ecommerce marketplace, you gain access to:
- The vast, global pool of potential customers who shop on ecommerce marketplaces.
- An established ecommerce channel, which can serve as a vehicle to help you attract and convert shoppers into customers.
- The best-in-class 3PL fulfillment services that many ecommerce marketplaces provide. Amazon, for example, offers Fulfillment by Amazon (FBA), a service that third-party sellers can utilize to pick, pack, and ship their Amazon.com orders. Additionally, if you’re selling on another ecommerce marketplace and want leverage Amazon’s fulfillment network and expertise to deliver your orders, you can use MCF.
Social commerce is particularly popular among the younger generations, with nearly 70% of Gen Z shoppers and around 90% of millennial shoppers stating that they purchased an item after seeing it in their social media feed.
Selling your products on social media stores allows you to tap into large audience of potential customers, engage them with relevant content and targeted marketing campaigns, and offer them a frictionless shopping experience through their social media channel of choice.
With so many different ecommerce channels to choose from, it can be hard to figure out which ones your business should be selling on.
By following these steps, you can determine which ecommerce channels are right for your business.
1. Learn about your customers
For your ecommerce business to be successful, it’s essential that you develop a deep understanding of who your current and prospective customers are, where they are located, and where they shop online – so that you can ensure your brand has a presence on the channels where your customers are today and in the future.
Let’s say your core customer base is people between the ages of 18 and 24 in the US. Research shows that 55% of this population shop on social media channels – so if you want to reach these shoppers, social commerce could be a key part of your selling strategy.
Invest the time in researching customer demographics and current shopping trends so that you can learn which channels your customers use to shop – and ultimately offer the right products, to the right shoppers, through the right channels.
2. Think about your business model and goals
When trying to select the right ecommerce channels for your business, it’s imperative that you take your business model and goals into consideration – so that you can identify the channels that are best suited for your business.
For example, if your brand wants to offer a unique, customized experience for shoppers, then selling on your brand website is probably the best approach for you.
However, if your goal is to expand your business by tapping into a larger pool of customers, then you will likely want to explore listing your products on ecommerce marketplaces.
Or, if you want to appeal to a younger shopper demographic in the US and utilize influencer marketing to drive sales, then social media stores on Facebook or Instagram (the two most popular social commerce channels in the US) could be a good fit for your business.
3. Consider the operational and financial implications
Your choice of ecommerce channels will have an impact on your business’s operations and bottom line. When evaluating whether you should sell on a channel, you should take into account various factors, including:
- Cost: You should take the time to calculate the potential costs of running your ecommerce business on a particular channel (including setup costs, marketing and advertising costs, product listing, order processing, and fulfillment fees, customer service costs, etc.) Determine whether the expected revenue uplift is significant enough to justify making the necessary investments to sell on that channel, and whether you have the budget to support scaling your business across that channel.
- Business requirements: Each channel comes with its own set of business requirements, and you need to make sure that your business can meet them. For example, an ecommerce marketplace may have requirements about inbounding and distributing inventory, order tracking, delivery date promises, returns management, or even the type of packaging you use – and, in order to sell on these marketplaces, you must be able to adhere to their requirements.
- Integrations: Ecommerce integrations – software applications that connect your back-end systems (such as ERP, inventory, and order management systems) with the channels you sell on and the 3PL providers you use – are an essential tool for today’s online businesses. In fact, the average ecommerce experience today involves over 30 integrated systems, according to Gartner. Check to make sure you are able to easily and effectively integrate your systems with those of the channels you are considering – as this will enable you to automate and streamline your ecommerce operations across those channels.
By following these steps – considering your customers, your business model and goals, and your operations and budget – you can identify which channels would be right for your business.
Over time, you will want to continuously evaluate your sales and order fulfillment performance across the different ecommerce channels that you use – to determine if you need to make any adjustments or additions to your multi-channel mix.
Running a multi-channel ecommerce business can be complicated and challenging – and that’s why many companies engage 3PL providers to handle logistics across all the channels they sell on.
A 3PL can help you:
Pursuing a multi-channel ecommerce approach can enable you to increase customer acquisition and revenue growth and uncover opportunities for business expansion.
But with so many ecommerce channels out there, it can be difficult to identify which ones are right for you. By following the steps highlighted in this guide, you can determine the best multi-channel mix for your business.
And by choosing the right 3PL provider, you can successfully navigate the challenges and complexity of running a multi-channel ecommerce business and consistently delight your customers with fast, reliable fulfillment – no matter which channels you are selling on.
