Reduce Channel Silos: Why Midmarket Brands Need Both an Ecommerce Website and to List on Amazon
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According to recent research, Amazon is now the point of origin for 44% of product searches taking place online. Consider that for a minute: nearly one half of all product searches now start with a customer checking to see what Amazon has to offer before moving elsewhere. Of course, some never find a need to look elsewhere at all.
For this reason alone, a smart distribution and product discoverability strategy should include the Amazon marketplace. It’s simply a value add for online retailers who are struggling to keep pace with quickly changing consumer shopping habits and expectations.
That’s why Ylan Kunstler, director of strategic business development at Bigcommerce, spoke today on a panel at the Prosper Show regarding additional selling channels for successful Amazon sellers. See, the pendulum swings both ways: we all need Amazon –– and we all need our own branded storefront.
Here’s what Ylan had to say.
Share with us how you help sellers think beyond the Amazon marketplace.
Amazon is the defacto marketplace leader. No one can contest that, especially not with stats like these:
- There 224M active Amazon users, each spending an average of $625 per year on goods
- There are 54M Prime users, each spending an average of 1,500 per year on goods
- 44% of web shoppers begin their product search on Amazon
- 51% of U.S. consumers plan on doing most of their shopping on Amazon in any given year
- 35% of Black Friday sales were conducted on Amazon
If you are trying to reach those 44% of shoppers who begin their product search on Amazon, it is important that you have your products on that marketplace. However, we found that some of our merchants selling on Amazon generally do 34% of their total sales on that marketplace, and 45% come through their own site. Therefore, if you don’t have your own online store, you could be missing out on nearly half your book of business.
Tell us what kinds of sellers should be actively considering a digital storefront as another channel for selling.
Let’s back up for a second. The first wave of ecommerce was value driven, it was all about price, free shipping and the convenience of shopping from home. The new wave of ecommerce is really experience driven. Amazon understands this insanely well. The company does an excellent job at providing a full shopping experience from site browsing to product delivery.
That being said, by having your own branded site, you are able to deliver your own unique experience that is in line with your brand and your customer expectations. It’s about providing an experience that increase customer lifetime loyalty and AOV. Amazon is helping you do that on their marketplace, and if you’re succeeding there, then you can do the same on your own site. Why wouldn’t you?
We do see that brands selling unique products are proving out ROI on the Amazon marketplace faster than those selling third-party goods and some of our merchants that use Amazon as supplemental to their business are seeing 70% increase in revenue. These are merchants across all verticals.
In my point of view, successful Amazon sellers should consider opening an digital storefront merely for the revenue of it. The business model is proven. You will have to put in some work, but that’s true no matter which channel you sell in. If you want to expand, you need to look at what you don’t have that is currently driving increased sales for other sellers. If you have an Amazon store, but not your own branded website –– launch a site. If you have a site but are not selling on Amazon –– launch an Amazon selling channel.
What specific ways have you seen sellers use your channel to complement what they are already doing on Amazon? What defines a seller that can be success both on Amazon and on their own website?
To be specific, our data suggest that more than half of midmarket Amazon sellers do not currently generate any sales from their website –– we want to help those sellers change that.
What defines a seller that can be a success on both the Amazon marketplace and their own ecommerce storefront is simply a seller that understands the difference in the audiences. You have to present the information a bit differently, but tons of brands are currently using both channels simultaneously to increase their bottom line and brand awareness.
In our point of view, commerce is no longer silo-ed by channel (i.e. marketplaces, website, brick-and-mortar). The most profitable, quickly scaling businesses are in all channels and are making it insanely easy for customers to discover their products and brand.
What features of your channel differentiate you from the Amazon marketplace?
For us, it’s not an or –– it’s an and. You want your products to be discoverable no matter where a potential customer is searching for them. Yes, 44% of people search for products on Amazon –– that’s impressive.
The rest? Well, a lot of them use Google –– and you need SEO to rank for that, either through your wholesale operations or your own website. Bigcommerce increases your brand and product discoverability for those potential customers not searching on Amazon.
With your own store, beyond SEO, you also get to manage the entire customer experience. On Amazon, Amazon does most of this for you. They provide the site, product page layout, the checkout, the shipping (if you are using FBA). And that’s great. More and more consumers are looking for a unique experience when buying online, though –– and you have the opportunity to win customer lifetime loyalty and brand permanence by achieving customer expectation excellence. A website is the first tool you need to begin doing that.
If you are a brick-and-mortar which sells on Amazon, Bigcommerce is unique in the ecosystem for you. Your point of sale systems aren’t going to give you an integration to Amazon. Bigcommerce will, though. This includes synced inventory and catalog, sales metrics and more. Bigcommerce becomes your selling hub at this point. No one else in the industry can offer that.
Tell us about situations where you have seen successful Amazon sellers leverage your channels to increase sales and diversify risks.
Business like PriceSmile, which is a reseller of everything from clothes and accessories to tech and vitamins, or Cultural Elements, which sells custom-made jewelry and home decor both on Amazon and on their own site come to mind. Both businesses use their branded websites to drive SEO, consumer trust and awareness outside of the marketplace –– which is their primary revenue channel. You just have to remember that how you run your website and how you run your Amazon listings is very different.
These store owners have reported to us saying that Amazon customers rarely feed into their Bigcommerce site. They are loyal to Amazon. This proves the difference in the audiences for your Amazon channel versus your website channel. You must treat those customers as such.
Of course, we also have stores whose primary sales channel is their website, but who use Amazon to drive additional revenue. Stores like Son of a Sailor, which sells handmade goods, and Fugoo, which sells custom technology have both seen success on Amazon as an additional revenue source. These businesses have been some of the first pulled in to new Amazon initiatives like Amazon Handmade and Launchpad, and this is thanks to close partnerships between all parties.
If a seller has run afoul of Amazon policies and is looking to reduce risk by diversifying, I’d imagine you are both excited to have them but also cautious. What advice or direction would you share with sellers that have had issues with Amazon Seller Performance and are now considering your channel?
In this regard, Bigcommerce is in a unique position. We are strong believer in providing as many channels as we can to Bigcommerce sellers, especially if those channels complement or enhance merchant capabilities to be successful.
In our case, as a partner-first platform, we are working closely with our channel partners, including Amazon, to try and mitigate any issues similar to those you brought up. The goal is to protect merchants from making some of those mistakes. It’s not a guarantee, but that’s what we strive for as we develop our product with our partners.
That said, we continue to welcome merchants who are looking to expand their business beyond marketplaces to ecommerce or to replatform from competing solutions which a) don’t provide a commerce-first solution, b) don’t reduce cost of ownership and c) don’t empower merchants to increase sales across channels. In our point of view, your customer service quality is a business strategy. You’d be wise to make it excellent.
Photo: Flickr, Mike Seyfang
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