Multichannel Selling: What You Need to Know

May 19, 2020
Adam Ritchie

Multichannel Selling: What You Need to Know

May 19, 2020
Adam Ritchie
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With strong marketing efforts and a well-designed website, you should be able to attract a high level of traffic to your site and convert a good portion of that traffic into paying customers. 

But why limit yourself to just your site? There are many other sales channels out there (Amazon, eBay, Etsy, etc.) that you can use to find new customers and generate more revenue for your online store. And in tough economy times like these, keeping the revenue flowing is more important now than ever.  

Image source: MarketingCharts

To expand a brick-and-mortar business, you’d need to invest a massive amount of time and money into acquiring additional physical storefronts, hiring new employees and more. Thankfully, expanding into new territory online is much easier and more affordable. 

We’ll show you everything you need to know to get started with multichannel selling below. 

The Pros and Cons of Multichannel Selling

In addition to helping you find new customers, multichannel selling offers many other benefits as well, such as:

  • Borrowed Trust: When new stores are just starting out, it can be hard to convince customers that your brand is worth buying from. But while visitors may initially be hesitant to make purchases on your site, 65% of customers feel comfortable purchasing from a merchant they’ve never heard of before as long as it’s through an established marketplace like Amazon. You can use multichannel selling to make revenue in the short-term while you build up customer reviews and establish a reputation for your site. 
  • Increased Exposure: Sales aren’t the only thing that outside channels can provide for your store. If someone sees one of your products while browsing but doesn’t make the purchase, they were still exposed to your brand. That familiarity may make them more inclined to take the next step and purchase your product in the future. Over time, these small interactions can have a big impact on your store’s success.
  • Reduced Risk: Again, with the economy as weak as it is, maintaining your current level of income may take some extra effort. Unemployment is rising, which is causing demand to fall and could very well lead to a drop in sales on any given channel. But you will likely find that your store is more successful on some channels than others, which will help you compensate for any loss of revenue from other sources. 

There are also some drawbacks associated with multichannel selling, including:

  • Cost: When you make sales on a channel as a third-party seller, the channel will generally charge you a per-unit or percentage fee. And on top of that, you may also need to pay a monthly subscription fee in exchange for the privilege of using their platform.
  • Time: It can be difficult and time-consuming to manage your inventory and orders for just one site. Managing your inventory and orders across multiple channels makes it even more so. Inventory management software will help you keep everything organized and save time, but this can also significantly increase the cost of multichannel selling (for example, the inventory management app Skubana will cost you at least $1,000 per month). 

Is Multichannel Selling Right for Your Store?

Deciding whether or not to invest in multichannel selling shouldn’t be as simple as just weighing the pros and cons listed above. Every store is different — for many businesses the pros will far outweigh the cons, but that won’t be the case for everyone. It depends on the type of products you sell, the demographics of your average customer and many other factors.

Furthermore, each channel has its own set of plusses and minuses. Prioritizing the channels that are the best fits for your specific business will help you design the optimal multichannel selling strategy.

4 Popular Ecommerce Sites to Consider

Let’s take a closer look at what a few of the most popular channels have to offer.

1. Amazon 

Image Source: Amazon

With 206.1 million monthly visitors, Amazon is the most popular ecommerce site in the United States by a wide margin. It doesn’t really matter what you’re selling — you’ll be able to find new customers here. 

Another advantage to being a third-party seller on Amazon is that it lets you take advantage of the company’s sprawling network of 170+ warehouses with its Fulfillment by Amazon (FBA) service. Using FBA also makes your products Prime-eligible, which means that Amazon Prime customers (82% of U.S. households have an Amazon Prime subscription) can order them with free two-day shipping. When you consider that 74% of online shoppers report that free shipping is the most important thing they look for at checkout, it’s easy to see how this can lead to more sales for your store. 

One thing to look out for, though, is that Amazon has recently been crowding out third-party sellers by diverting visitor attention to products that they produce themselves. You’re certainly not getting in on the ground floor here — Amazon will help you make more sales now, but don’t rely on them too much.

2. eBay

Image source: eBay

The second-most popular ecommerce platform in the U.S. is eBay (109.4 million monthly users). You may not have considered this channel as an option for your store if you associated it with consumer-to-consumer auction sales (and indeed, that was the initial focus of this platform), but most of the sales on eBay now are actually in the traditional format of businesses selling products to consumers at a fixed price. 

Like Amazon, eBay is popular across all industries and niches. Every ecommerce store should consider selling on this channel. 

3. Etsy

Image source: Etsy

Etsy also offers a large audience (56 million monthly users) for you to convert into customers for your store. 

But unlike Amazon and eBay, this is not a one-size-fits-all solution for multichannel selling. People generally go to Etsy to buy handmade items or crafts supplies. If you sell something like original artwork or vintage jewelry, you can find a lot of success on this platform. But if you sell mass-produced goods, your time would likely be better spent focusing on other channels.

4. Newegg

Image source: Newegg

Here’s another niche channel for your consideration: What Etsy is to handmade items, Newegg is to electronics (another similarity to Etsy is that Newegg has about 50 million monthly users). This is an especially useful channel for stores that focus on computers and computer accessories. 

If electronics are just one of the categories of products that you sell, you could always sell a selection of products on Newegg rather than your whole inventory. In fact, you should be sure to use inventory management software that allows you to keep track of which products are performing the best across all your channels. That way, you can pull out your worst-performing products in order to minimize the cost of fees without losing much revenue. 

And the platforms listed above are just the tip of the iceberg when it comes to multichannel selling. There’s also Sears, Jet, Rakuten, Houzz and many other options for your store. 

With the help of these channels, you’ll be able to keep your sales figures strong through both good economic times and bad.

Adam Ritchie

Adam Ritchie is a writer based in Silver Spring, Maryland. He writes about ecommerce trends and best practices for Shogun. His previous clients include Groupon, Clutch and New Theory.