The Pros and Cons of Multi-channel eCommerce

Posted by Eman Abulmagd on

In the past few years, the number of marketplace websites went stellar. With at least one or more marketplaces in every imaginable niche. It didn't only enrich the online shopping experience but also opened the door for online merchants to go multi-channel and sell more than ever before.

On the other hand, major social media platforms started tailoring some of its services for eCommerce merchants. Even turning a part of their websites to eCommerce-like portals (Facebook Marketplace, for example). All of this along with the availability of a host of integration tools enabled eCommerce merchants to sell virtually anywhere.

What is multi-channel eCommerce?

Multi-channel eCommerce is basically about having many storefronts for your online store. Meaning that instead of limiting the sales and checkout process to your website, your customers can shop for your products on social media platforms like Instagram or Facebook. Or shop on niche marketplaces like Houzz.com or even listing your products on major eCommerce websites like Amazon and eBay.

This might sound a bit too lucrative. Instead of showing your products only on your website with its limited traffic, why not list your products in every possible channel and put them in front of many more customers? Although multi-channel eCommerce is a really good opportunity that you should look into and consider for your store. It needs much more than just a decision to "go for it".

To multi-channel or not to multi-channel

The idea of selling on multiple channels might look attractive at first. But you need to consider some factors before you dive in. Setting up an extra channel like listing your product on Amazon, for example, means that you'll need to provide this channel as well with any product updates you post on the real website, provide updated inventory counts for the different listed products along with assigning dedicated customer service and promotional budget for this platform.

At the end of the day, any of the "free" virtual storefronts that multi-channel eCommerce offers affect your company's overall brand.

Having a glitch-free, flawless website with a strong customer support team on your main website won't make up for bad customer experience on your Facebook Shop. Your customers will demand the same quality standards from your business, whether you're selling on your website or anywhere else.

On the other side, selling on other websites, be it social media platforms, marketplaces or major eCommerce platforms usually comes with a price. In most cases, they take a fee for selling on them. It can be a fixed fee or a commission. This small 2% here and 3% there might quickly eat up your profitability. That's why you need to think very well about whether you want to list your products in places other than your website.

Here's a list for some of the pros and cons of going multi-channel.

Pros

More exposure: Just like opening a new branch, going multi-channel gives you the opportunity to display your products in more online outlets and reach more customers.

Increased Profits: Since you now your products are being sold in multiple places, this will usually be followed by more sales and if you have a brick and mortar business, it can even mean more store visits since people now know about your brand and products.

The niche advantage: Some of the multi-channel are niche marketplaces where people go shopping for certain types of products. If your eCommerce is in the scope of home decor, then putting your products on Houzz.com gives you the opportunity to reach the customers who are actively looking for your type of products.

Cons

Stock control: If you don't have multi-channel inventory management software, then selling on multiple platforms can cause a lot of hassle. Instead of managing orders and calculating your stock from your website only, you now have to keep track of the out-of-stock items and inventory on multiple websites. And sync this data in real-time across all of these channels.

You're not alone: On your website, customers see only your products. In online marketplaces, your product is viewed alongside the products of your competitors' in the same niche. Not only that but also most marketplaces have "products like this" suggestions displayed alongside any product that the customer views. You can pay a lot of dollars to send your customers to your marketplace page, only for them to go buy a similar product from another vendor.

Increased cost: Selling on other websites comes with a price. Sometimes it's a flat fee for displaying your product monthly or a percentage from every sale. This small fee, if not calculated well, can eat on your product profitability fast.

Fulfilling expectations: When selling on other platforms, you'll need to maintain the same level of quality in both your products and the customer experience that you offer on your main website. As any problems on the other channels will affect your brand in some way or another. And yes, even if the problem is on the platform yourself, not in your store's page on it, it can affect your brand too. So, If the platform has a lot of glitches or bad platform-related customer service you need to close this channel for good.

After going through these pros and cons, do you think it's a good idea for your business to go multi-channel? We would love to know your opinion. Share it with us on Medium, LinkedIn, Facebook, Twitter or Instagram

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