Diversification, or smartness in e-commerce

Want to sell effectively online? Don't just bet on one sales channel. Bet on several. Properly combined, they will allow you to worry about only one thing - fulfilling orders on time.

A textbook example of dependence on a single sales channel is Toys 'R' Us. The U.S. giant began selling online in 2000. To do so, it chose the Amazon platform, with which it was bound by a ten-year contract that excluded the presence of other toy sellers on the platform. In practice, however, the company had to compete with other companies that Amazon, despite the agreement, allowed on its platform. The story ended in 2004 with a tumultuous breakup, including a lawsuit filed against Amazon for breach of contract. More significant, however, was Toys 'R' Us' lack of interest in developing its own online sales channel, which sent the company flying downhill to bankruptcy in several markets in 2017. In an era where sales are ruled by multichannel, looking selectively at sales can end in a similar collapse.

Own store

One's own website is the foundation of e-commerce - a central point of sale and a prerequisite, though not sufficient, for creating a recognizable brand to which customers will return. Just setting it up doesn't require as much investment as it did 10 years ago, especially using an off-the-shelf SaaS service. Your own store allows you to stand out in a sea of "garage salesmen." - Even the nicest and most technically polished store will not start selling on its own. The key to success is to skillfully combine promotional activities with e-business development, says Jakub Juszyński, Fajne Studio. - A good solution is to create an ecosystem in which, in addition to the obvious path from the manufacturer through the distributor to the customer, we also take into account the environment (influencers, competitors, NGOs and other entities important in the sales process).

Advantages:

- allows you to build your own brand online
- allows you to reach customers outside of a geographically defined area e.g. town where the store is located
- makes you independent from marketplaces
- allows you to build your own customer base and maintain relationships no competition with other sellers who put up theirs next door (just like in a marketplace)
- more configuration possibilities than in the case of a store on a marketplace
- no need to constantly put up products/repeat ending auctions
- lower maintenance costs than a stationary store, in some cases the difference is very big, e.g. SaaS store and dropshipping model operation
- more flexibility - e-store can offer more products or if you need less

Disadvantages:

- it can be a challenge to get enough traffic (need to invest in advertising)
- an online store, like any business, requires investment in the form of time, especially at the beginning, before all the processes start
- in a stationary store attracting attention is possible to a lesser extent than online
- a stationary store is open only during certain hours - online operates 24 hours a day
- in an online store the customer will not be able to see the product - not all products will sell well online - for example, even though cars can be bought online you still need to see them before buying.

In marketplaces on market day, that's the kind of talk you hear....

Traffic on marketplaces, according to various sources, accounts for about 30 - 50 percent of the value of Polish ecommerce. Despite this wide range, one thing is certain - it is an important part of e-commerce sales. The largest domestic representative is Allegro, where we most often buy products from the following categories: clothes, books, household appliances, car parts, cosmetics or household chemicals. However, auction platforms are places where you can find virtually all products, including cars and houses. A more stargeted marketplace like Etsy will make it easier to sell "handmade" products or art.

Advantages:

- from the very beginning, access to traffic generated by the marketplace
- simpler set-up and operation (important for beginners)
- being in the marketplace allows you to protect yourself, among other things, in case of failure of your own store
- building your brand by getting good ratings from customers
- entering the marketplace in specific foreign markets facilitates expansion

Disadvantages:

- Variability of regulations and price list
- marketplace can remove products or block profile if it deems that they violate regulations
- more difficult to calculate own margin (changes in service price lists)
- competing with sellers offering similar or the same products mainly by price, not by brand
- no possibility to build customer base

Social media, which is where the (almost) whole world is

Social media can be a good complement to traffic from perfectly targeted ads based on users' interests. Take a look, for example, at the recently introduced Marketplace, which is part of this social platform. - Facebook is great as an outreach platform, it allows you to convey knowledge to your customers, but also to find out what interests them, what their needs are. We also present our products there from time to time. We automate this process through Facebook integration, which we import the entire catalog from the store. We can then easily select products for presentation, including on Instagram. It's worth using different tools to reach your audience," says Agnieszka Niedziałek, owner of the napieknewlosy.pl store.

Advantages:

- Additional (although without advertising campaigns usually marginal) source of traffic
- opportunity to present products attractively on visual platforms Facebook, Instagram or Pinterest (for some types of products)
- opportunity to enter into dialogue with users

Disadvantages:

- High variability of rules and regulations
- greater vulnerability to crises and undesirable user behavior

Don't be afraid of comparisons

Despite the ongoing affluence and the trend to seek out unique products, Poles are still price-sensitive customers. This affects the popularity of comparison sites such as ceneo.pl, nokaut.pl or okazje.info. For the store owner, the good news is the possibility of settling cooperation "for effect". This makes it easier to decide on testing the comparison engine within the offered product category, in the worst case we will only spend the time needed to add products.

Advantages:

- Comparison sites are a good source of traffic
- billing only after the transaction is completed
- low cost of reaching customers
- possible additional forms of promotion within the site (banners, highlights, offer highlighting)

Disadvantages:

- competing on price
- difficulty in recovering abandoned shopping carts

Let yourself be found

You need to work on organic traffic from search engines and paid traffic from Google Ads on an ongoing basis. And while the former is important, the fastest results will come from the paid way. - Shoper Campaigns using Google Ads, allowed stores to get an average of 1200 percent ROAS [Return Of Ad Spend], says Jacek Zientkiewicz Brand Manager of the Shoper platform. - It's worth testing what will work for a store with a specific assortment. Currently, Google Shopping works incredibly well as an effective ad for online stores, its advantage is a great presentation of the product along with the price, which the owner does not have to prepare manually, but it is pulled directly from the product file (XML)

Advantages:

- 93 percent of Internet users in Poland use Google, the search engine gives a constant flow of organic and paid traffic
- well set up paid campaigns guarantee sales from the first days of operation

Disadvantages:

- SEO takes a lot of time and relies on many factors that are not entirely clear
- Google's algorithm variability can result in a severe drop in search results
- according to searchengineland.com, in eye tracking studies, 70-80 percent of users ignore paid search results; at the same time, 50 percent of adult users do not distinguish them from organic results

Count and test

Channels differ in costs, customer retention rates, revenues. Thus, the profitability of each of them must be counted separately within the product category offered. And above all, test - this activity next to counting is the most important in ecommerce.