June 17, 2019

Don’t Rely on Amazon Alone – Why You Should Diversify and How to Make it Happen

The more e-commerce sites your business is on, the more potential customers you will reach. But finding those sites doesn’t need to be difficult.
Kirby Tifverman

With over 300 million customers worldwide, when it comes to e-commerce, there’s no disputing that Amazon is king.  That’s good news for them, and good news for your business too, because as a seller, setting up shop on Amazon can give you your very own piece of the pie. It’s no surprise that most new online sellers immediately launch their products on Amazon because of the ability to immediately tap into the world’s largest online retail channel.

Why Diversify from Amazon?

But like anything else in life, doing business through Amazon is not without its problems. In fact, when it comes to their policies, dealing with Amazon can sometimes be akin to navigating a minefield. Make a customer angry, and Amazon could suspend your account. Accidentally violate a rule, and you risk a similar fate. Your customer doesn’t want to pay return shipping? You could end up eating the cost of Amazon ‘damaging out’ perfectly good merchandise, lowering your inventory and costing you money. And what happens when your product gets listed for a few cents less by another seller- or by Amazon itself? With so many risks and restrictions, putting all your eggs in Amazon’s basket is a bad idea.

The horror stories smaller sellers have endured when doing business on Amazon.com are becoming increasingly common. Problems ranging from high fees to unjust suspensions to knock-off products and restricted sales have become par for the course. But while Amazon may still be king despite these issues, they’re also no longer the only game in town- nor should they be when it comes to your business.

If the myriad potential problems with dealing with Amazon aren’t enough of a reason to diversify your e-commerce business – focus on the number one positive of diversification: more sales. After all, the more e-commerce sites your business is on, the more potential customers you will reach. But finding those sites doesn’t need to be difficult.

But where do you go from here?

Your Own Website(s)

The first place to start when looking to diversify your e-commerce operations is opening your own site. There are many user-friendly storefront hosts available for smaller sellers, such as Shopify, Big Commerce, Magento, Gumroad, and even blogging giant WordPress. These sites have plug-in apps that can customize your shop to do whatever it is you want it to do, and for a relatively low cost. The best part of running your own web store is that you are in control of everything from the inventory to the customer – which leaves ample opportunity to market your product and generate future sales. The downside is that it’s literally all on you. If something goes right, you get the kudos, but if it goes wrong it’s your problem to fix.

Running your own shop also puts the impetus of marketing squarely on your shoulders. Experts recommend collecting emails and reaching out to customers regularly to offer discounts and new product announcements. You can also start a business presence on social media sites like Facebook and Instagram. Many business owners have also found success using online marketing through Google Ad-words and organic search engine optimization (SEO). The key to your success when running your own site is finding your customer and driving them to your page.

Another pro-tip to running your own site: mix up your content. Don’t simply copy and paste the text from your Amazon listing to your Shopify store. Diverse content will prevent Google from hiding your listings and only promoting the most popular site carrying it (Amazon). You can even add a blog to your store to convey your authority on your product and to generate traffic to your site. Be sure to use keywords in your blog, listing titles and product descriptions.

When choosing your own shop, you may still find it in your business’s best interest to contract with a 3PL fulfillment center to handle your receiving, inventory, fulfillment and shipping – taking a huge load of work off of your shoulders. Should you go this route, make sure the provider you select offers the services you need, such as fast shipping turnaround, attractive packaging and of course, easy to understand pricing for you.

Other Online Marketplaces

As previously mentioned, Amazon isn’t the only online marketplace anymore. Sites like eBay, Rakuten, Alibaba and even Walmart all allow smaller sellers to set up shop on their site. This translates to more exposure from a diverse customer base, and more importantly, increased sales for you – all without the worry of needing to attract customers to your page. In fact, business experts recommend you have an e-commerce presence on up to five or six competing sites. This way if something goes wrong with one site, you still have revenue on the other four or five.

You may be wondering what’s the point of setting up shop if the profits aren’t as high as with Amazon, but if you think about it, it makes perfect sense. Should sales slow on a less-popular site, your profits won’t take much of a hit – or as much of a hit as they would on Amazon, and if Amazon decides to pull your listing, you still have plenty of backup options already in play to serve your customers. That, and lower fees mean even if sales are slower on a smaller site, you’re still not out all that much money.

Other Sales Channels

When considering alternative sales channels, don’t just look online. Though online sales continue to grow year after year, brick and mortar stores are still an indomitable force when it comes to retail sales. From the local ‘mom and pop’ store to retail giants like Target and Home Depot, having an in-store presence is still an important way of generating sales.

While it can sometimes be a challenge to get your product onto the shelves at some big box retailers, start out small. Proven sales at a mom and pop can help open a lot of doors to the Walmarts of the world.

Before you start getting overwhelmed at the thought of big box retail, remember- this is where a 3PL company can be your business’s best friend. Using a 3PL doesn’t just mean transporting goods to and from the warehouse, but it can also mean managing inventory, too. Of course, you may need to make some modifications to packaging and get set up with an EDI system which allows your 3PL to communicate with retailers, but a good 3PL will work with you to help get your business set up with your new retail partners, allowing you to place your energy elsewhere.

Diversification is Key to Success

If your business is already having success with Amazon, congratulations. Amazon is one of, if not the best online marketplaces for smaller businesses to sell their products to a wide audience. But remember, Amazon is not without its flaws, and putting all your stock both literally and figuratively in an Amazon shop is a risky move for any business. Diversifying your markets allows you to increase sales, own your customer information, control your marketing, and oversee how your inventory is handled.

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