Introduction
To increase sales, ecommerce businesses today must be able to expose their products to the largest possible audience of potential customers – and multi-channel selling (the practice of selling on more than one online channel) is an excellent way to achieve this.
Businesses that have invested in a strong multi-channel selling strategy are thriving. Multi-channel ecommerce sales, which have been surging in recent years, are expected to total $687 billion in the US in 2023.
What is driving the rise of multi-channel sales? There are two main factors:
- Consumer behavior: When it comes to choosing where they will shop online, today’s customers have an array of options – from brand websites to ecommerce marketplaces to social media stores. A recent study revealed that 73% of consumers use multiple channels over the course of their shopping journeys. To succeed, ecommerce businesses must be able to meet online shoppers wherever they are – and offer up the right products in the right place at the right time.
- Increased revenue: Multi-channel selling can provide opportunities for revenue growth for ecommerce businesses. Research shows that selling across three or more channels can increase sales by as much as 190%.
But managing a multi-channel ecommerce business – particularly when it comes to handling logistics operations like inventory management and order fulfillment – is not an easy task.
With more channels comes more complexity – and many ecommerce businesses engage third-party logistics (3PL) providers to help them streamline their multi-channel ecommerce fulfillment operations, reduce operational costs, and ensure a consistent, first-class customer experience across any channel. Indeed, some 3PLs – like Amazon Multi-Channel Fulfillment (MCF) – can really help you grow your multi-channel ecommerce business by providing fast, reliable fulfillment on each and every channel you sell through.
In this guide, we will examine the three main types of ecommerce channels and explain how a 3PL can help you optimize your order fulfillment across all these channels.
The first type of ecommerce channel that we will discuss is brand websites, also known as direct-to-consumer (DTC or D2C) websites. There are over 7 million ecommerce websites around the globe – and this number continues to grow each and every day as new stores come online.
A brand website is an online store – which is typically owned and operated by the ecommerce business itself – where customers can go to browse and buy the products that are on offer.
Most brand websites today are built on software systems designed by ecommerce solution providers such as Shopify, BigCommerce, Wix, Adobe Commerce (Magento), and WooCommerce. These software systems enable you to easily and effectively manage all the elements of your online store including listings, catalog, cart, checkout, and order routing.
- You can shape the shopping experience for customers on your website and can decide how to optimize their entire journey, from browsing to adding items to their carts to checkout and order confirmation. For example, if you are looking to offer your Prime member customers fast, free delivery and a checkout experience they know and trust, you can add Buy with Prime to your brand website. MCF and Buy with Prime are helping ecommerce business, Epic Water Filters, streamline its fulfillment and convert shoppers with a seamless checkout and fast, free delivery. Learn more about their story.
- You can control the selection of products from your catalog you want to display to customers (to optimize upselling and cross-selling opportunities), the pricing of these products, any promotional campaigns that you want to run, and the method of fulfilling orders placed on your website (some businesses opt to handle their order fulfillment themselves, while others outsource this to 3PL providers, like MCF).
- You can access customer data and utilize it to unlock opportunities to forge direct relationships with your customers (as long as you adhere to privacy policies and applicable laws).
- You are responsible for the upkeep of your brand website, and will likely need dedicated resources on your team to ensure that everything is running smoothly on the back end.
- You have to manage top-of-the-funnel marketing activities and implement strategies to attract, engage, and convert consumers. It can be challenging – especially for brands that are not yet well established – to drive traffic to your website and develop trust with online shoppers.
In sum, selling on your brand website gives you more autonomy to shape the shopping experience for your customers, but requires greater responsibility from you when it comes to managing the maintenance and marketing of your online store.
The second type of ecommerce channel that we will cover is ecommerce marketplaces. First introduced in the 1990s, ecommerce marketplaces – such as Amazon, eBay, and Etsy – have revolutionized the way the world shops.
According to recent research, the top 100 online marketplaces globally generated $3.25 trillion in sales in 2022. Interestingly, the bulk of the sales on ecommerce marketplaces (77.5%) in 2022 came from third-party sellers – and this demonstrates how these marketplaces can be powerful vehicles for ecommerce businesses like yours to drive revenue growth.
Indeed, these websites have become true online marketplaces, connecting hundreds of thousands of independent merchants with customers around the globe.
- You get access to a massive, global audience. Ecommerce marketplaces are the trusted and preferred channel for most online shoppers today – with 77% of consumers stating that these marketplaces are the most convenient way to shop online. By putting your goods on an ecommerce marketplace, you can reach and tap into an enormous pool of shoppers from all over the world without having to invest extensively in marketing.
- You don’t need to worry about building or managing an ecommerce website – as this is done by the ecommerce marketplace itself. Many ecommerce marketplaces provide resources to help you improve customer acquisition and conversion across your product listings.
- You can choose whether you want to handle your own order fulfillment or outsource it to a 3PL provider. Many ecommerce marketplaces offer 3PL fulfillment services. For example, Amazon offers Fulfillment by Amazon (FBA) – a service that businesses that sell on Amazon can use to fulfill their orders. Or, if you are selling on ecommerce marketplaces besides Amazon.com (or through other online channels) and want to have Amazon pick, pack, and ship your products to customers, you can use MCF.
- You will likely have to pay certain fees – including listing, commission, and payment processing fees – to sell your products on an ecommerce marketplace.
- You may face stiff competition from other merchants looking to sell similar goods – and it may be challenging to differentiate your products and drive traffic to your listings.
- The ecommerce marketplace creates and controls the shopping experience for customers, and, in many cases, sets the prices for products. You will also have to adhere to the guidelines set forth by the marketplace, which may impact how you position and promote your products.
In a nutshell, ecommerce marketplaces can provide you with an avenue to reach a huge pool of potential customers, but you should be aware of the fees, guidelines, and competition when selling through these websites.
The third type of ecommerce channel that we will highlight is social media stores.
Social commerce – which refers to the use of social media websites like Facebook, Instagram, and TikTok to market and sell products to customers – is on the rise. Sales on social media stores – which totaled $992 billion in 2022 – are expected to skyrocket and reach $2.9 trillion by 2026.
Social commerce is particularly popular among millennials – with 55% of the US population between the ages of 18 to 24 saying that they have placed at least one order through social media.
- You get access to a highly interested and engaged audience of potential shoppers, and can serve up personalized, relevant video, photo, or other content to them (using paid and organic campaigns) to help accelerate conversion.
- You can utilize powerful marketing tactics such as influencer marketing – when you enlist the services of social media influencers (individuals with a large social media following) to help you promote your products. This can be an extremely effective tactic – as 49% of social commerce shoppers say that an influencer’s recommendation has impacted their purchasing decision.
- You can choose whether you want to handle your own order fulfillment or engage a 3PL. Some 3PLs – like MCF – can handle orders placed on social media stores and ensure that your customers receive the same fulfillment experience as they do on other channels.
- You may need to invest a lot of time and effort to manage your brand’s presence on social media, consistently create content to engage with potential shoppers, and monitor comments and feedback to protect your brand’s reputation.
- You may need to invest a lot of money in order to promote your content through advertisements, influencers, or other avenues – and these marketing costs can really add up.
In short, social media stores can provide a powerful, effective avenue for you to reach an audience of engaged shoppers, but you have to invest a good amount of time, effort, and funds in order to optimize your brand’s presence on social media.
As you can see, expanding your ecommerce business across multiple sales channels can open up new opportunities for top-line growth, but it can also create significant operational complexity – particularly in the areas of inventory management and order fulfillment.
Fortunately, there are 3PLs out there – such as MCF – that can help you manage your multi-channel logistics operations, reduce costs, and deliver your customer orders on time, though any sales channel.
MCF, for example, enables you to effectively manage your order fulfillment across multiple sales channels by providing:
By working with a 3PL like MCF, you can drive greater efficiency across your order fulfillment operations and set your business up to succeed and scale in today’s multi-channel ecommerce world. One example of a company that has achieved this is Prime Line Packaging, which expanded into four ecommerce marketplaces and experienced 843% sales growth with MCF.
Online shopping is here to stay. According to recent research, 20.8% of retail purchases are expected to happen online in 2023 and global ecommerce sales are expected to grow by 10.4% to total $6.3 trillion this year.
Consumers today have an array of different online shopping channels to choose from including brand websites, ecommerce marketplaces, and social media stores. To survive and thrive, ecommerce businesses today must have a presence across all these channels.
Indeed, ecommerce businesses today must be able to meet customers wherever they are. They must be able to offer customers the right products, through the right channels, at the right times – and then be able to deliver those products to those customers’ doorsteps on time.
By enabling you to rapidly and reliably fulfill orders placed on any ecommerce channel and streamline your logistics operations across different channels, a 3PL – like MCF – can help you achieve consistent bottom-line growth.
