If there’s one thing that recent world events have shown us, it’s the value of diversifying your eCommerce business. Thousands of online sellers have been impacted by changing buying habits, broken supply chains, and disrupted FBA services, despite there being a simple and affordable solution: diversification.
In this guest post, we’re exploring the value of diversifying your eCommerce business and sharing some quick and effective areas you can get started with.
The value of diversifying your eCommerce business
Diversifying your Amazon business involves adding more strings to your bow, showing a greater deal of variety, and covering more bases.
1) Spread risk
Diversification spreads your risk. If you rely on one manufacturer, one product, or one sales channel and it becomes unpopular, disrupted, or ineffective, you immediately lose out.
Diversification spreads your risk so that if one SKU or supplier fails, you have other options to rely upon.
2) Increase profits
Diversification increases your profits. By diversifying your products, sales, and marketing methods, you appeal to more customers, increase your sources of revenue, and boost your overall sales.
You can also use diversification to operate your eCommerce business in the most profitable way possible, without impacting service.
3) Enhance business value
Diversification increases your business value. While you might not be looking to sell your eCommerce business right now, it could be something to consider in the future.
Multiple traffic sources, products, and forms of monetization all boost business growth and enhance the overall value of your eCommerce business.
How to diversify your eCommerce business
There are three steps to effectively diversifying your eCommerce business:
Conduct a risk assessment to identify the areas of your business that rely on only one factor for continuity. For example, products, sales channels, advertising, etc.
Research the product, partner, or software that can help you to reduce this reliance and increase your diversification, following your usual research methods.
Test your diversification in action, ensuring that it complements your existing set-up and can be relied upon when necessary.
Where to diversify your eCommerce business
To get you thinking about where you can utilize diversification in your business, let’s look at four common and effective areas for eCommerce; products, sales channels, operations, and communication channels.
1) Products
If Coca-Cola needs more than one product to survive, then you do too. A diverse product selection is great for:
Attracting new and different customers
Retaining customers and encouraging repeat custom
Reducing the risk of an unsuccessful or seasonal product
Keeping your business in-line with current trends
There are three types of product diversification:
1. Concentric
This involves selling products similar to your existing products. For example, expanding from one style of running trainer to two styles.
2. Horizontal
This involves selling new products to your existing customers. For example, expanding from running trainers to running shorts.
3. Conglomerate
This involves selling unrelated products to a different audience. For example, expanding from running trainers to ski wear.
According to Shopify, multi-channel selling increases revenue by 38%, 120%, and 190% with each additional channel – making sales channel diversification essential for growing eCommerce businesses.
Beyond Amazon, there are four big sales channels to consider, depending on your product selection.
1) Walmart
With customer numbers and fast shipping capabilities to rival Amazon, Walmart is a popular second marketplace for mainstream products.
2) Shopify
Finally, if you’re looking to bring Amazon shoppers directly to your own website, Shopify is an easy-to-use, and simple-to-set-up eCommerce platform that’s great for selling niche items to direct customers.
3) eBay
According to the State of Multi-Channel eCommerce Survey, eBay is the first recommended sales channel for existing Amazon sellers, especially those selling mainstream products at a competitive price.
4) Wish
Wish’s mobile-first platform and curated product feed makes it a popular sales channel for Amazon sellers targeting younger audiences with niche and budget items.
COVID-19 has demonstrated that a diverse supply chain is crucial for weathering a crisis and keeping your business open. Look at your suppliers and fulfillment sustainability to avoid unpleasant surprises.
Suppliers
Look to spread your suppliers across more than one country to overcome any local disruptions and travel restrictions. If you can’t find suppliers in multiple countries, use suppliers in different regions who use different transport networks.
Fulfillment
Protect your customers’ orders by using different packaging suppliers, warehouse locations, and shipping carriers. If you cannot do this in-house, use an outsourced fulfillment partner who uses multiple shipping carriers, warehouses, and sales channels to maintain fast shipping speeds regardless of what’s happening in the world.
For example, Deliverr’s warehouse partner network is spread across the USA, making it more resilient due to the flexibility and ability to expand where demand is.
Offer: Use the promo code TURNKEYDELIVERR in your Deliverr portal to get 30 days of free storage after inventory is received. Create a free account.
4) Communications
Finally, don’t forget that your customers diversify their shopping and communication methods too. Ensure that you deliver your message to customers through ads, search results, and other channels.
Advertising
Amazon PPC advertising is ideal for getting your products and brand in front of the right audience on Amazon. However, don’t forget about other advertising methods, such as Facebook advertisement, for reaching shoppers at different stages of their product discovery.
Search results
Ensuring you have fast shipping tags activated for your listings will help you increase your placement and visibility in the search results. But, remember that when diversifying your sales channels, you must diversify your fast shipping programs too, including Walmart TwoDay Delivery and Wish Express.
Communication channels
There are many ways to communicate with eCommerce buyers about product questions, order updates, and problems – use the same variety of communication channels that your customers use, including social media, SMS, and email.
Final thoughts
Diversifying your eCommerce business may sound like a lot of work. You’ve already spent time finding the perfect product and partners, now you need to do it all again?
However, the time invested in diversifying your products, partners, and processes can significantly pay off with business growth, continuity, and survival – even when the unexpected happens.
We hope that this guide has got you thinking about how you can start diversifying your business – whether that’s your products, fulfillment, or advertising.
About the Author
This is a guest post from Rachel Go, who handles content and partnerships at Deliverr. Deliverr provides fast and affordable fulfillment for your Shopify, Walmart, Amazon, eBay, and Wish stores, helping to boost sales through programs like 2-day delivery for Shopify, Walmart 2-day delivery, eBay Fast ‘N Free, and Wish Express. Deliverr’s FBA-like multi-channel fulfillment comes with clear and transparent pricing, easy onboarding, and hassle-free experience so you can focus on growing your eCommerce business.
This post was written by our friends at FreeeUp for the TurnKey Playbook for Amazon Blog
While demand planning can be intimidating, it is the backbone of any eCommerce site. Inventory forecasting will help you increase profits, plan your sales goals, and show you when you need to order merchandise.
Turning to freelancers and boutique agencies to outsource eCommerce operations is not a new concept. It’s been around for a while and it persists to this day because it is one of the most cost-efficient ways to manage certain business processes.
This is particularly true for eCommerce businesses. In 2020, eCommerce businesses can reap a variety of benefits from outsourcing.
For starters, outsourcing lets you focus on your core competencies. Let’s face it, there’s a lot that goes into running an eCommerce store and we don’t always have the skills or the resources to do it. Outsourcing also helps you increase productivity since you don’t have to spend time learning tricky details of eCommerce that are outside of your core competencies.
When you outsource eCommerce operations, you also reduce overhead costs and manage your company’s resources better. Furthermore, you can hire freelancers depending on your current needs so you can save on basic salary, taxes, and benefits.
Over the years, the role of freelancers has evolved particularly in the eCommerce arena. Today, we’re listing down five ways to outsource eCommerce operations in 2020. Let’s get started!
Trend #1: Social Commerce
Now more than ever, eCommerce customers are spending the majority of their time on social media platforms. In 2020, social commerce continues to become an integral part of the eCommerce sphere. It not only supports brand awareness building through social interaction but it also assists customers in their purchasing journey.
Outsourcing Solution
In a nutshell, freelancers can help create a pleasant social eCommerce experience that will encourage users to complete their purchase.
A freelancer can help you capitalize on social commerce and bring in more profit. They can make your brand more relatable and authentic by using visuals that resonate with your customers’ social feeds.
A social commerce expert can also help you monitor your fans’ purchase intent and help you make a move when the enthusiasm for a product is at its peak.
Trend #2: AR and VR Experience
Augmented reality or AR lets customers envision your product in their own spaces. This experience helps build their buying confidence and engages your customers better. This year, more customers are being introduced to this concept, and soon, this will be a crucial part of marketing products and services.
Implementing an AR and VR experience in your online store motivates shoppers by offering them more product guidance. It also provides users with a more customized shopping experience right in the comfort of their own homes.
Moreover, it’s an excellent way for retailers like you to provide incredible value to confused or undecided shoppers.
Outsourcing Solution
While AR and VR are no longer considered an emerging technology, it isn’t always part of every eCommerce business owner’s core competencies. But the good news is you can always outsource this service to enrich your customers’ shopping experience.
Freelance AR developers can help differentiate your brand from your competitors. If you have a mobile app store, they can incorporate AR capabilities. Alternatively, if you have a Shopify store, you can seek the help of an AR developer to get your 3D products into your store using Shopify AR.
Trend #4: Influencer Marketing
In 2020, consumers are shifting further away from traditional advertising and are relying more on recommendations and reviews for their purchase decisions. In fact, 68 percent of people said trustworthy reviews were the strongest influencing factor on where they decided to shop online. Moreover, product reviews turned out to be the most popular type of user-generated content submitted by online shoppers.
Influencer marketing or social media marketing involving endorsements and product placement from people who have expert knowledge or social influence in their field takes center stage this year.
Outsourcing Solution
If you’re new to the influencer marketing game, outsourcing this service is a better option than trying to do it in-house.
A freelancer who specializes in influencer marketing can help you in a number of ways including:
Developing and executing influencer marketing strategies and creative campaigns
Identifying and building relationships with prominent influencers and thought leaders in your industry
Developing content ideas, writing, and curating content for your social media platforms
Researching relevant industry experts, competitors, target audience, and users
Brainstorming creative approaches to influencer campaigns
Staying up to date with emerging trends, technologies, and influencers
Trend #4: Customers Have More Expectations with Order Fulfillment
This year, customers have more demands when it comes to order fulfillment. Customers are expecting pricing transparency and are becoming more wary of unexpected prices and fees. People are also expecting financing options, particularly for big purchases. Moreover, free shipping and multiple shipping options are major customer demands these days.
Your customers also expect to be able to track their orders on your store and to have real-time visibility into the status of their orders. Furthermore, consumers tend to expect a standard delivery period of 3 days. If it takes more than a week, then they are likely to abandon their carts.
Outsourcing Solution
Hiring a freelancer order fulfillment manager can help you stay on top of your customers’ demands this year. They can manage all of your orders across multiple sales channels to increase sales and customer satisfaction.
They can help process orders as they are submitted to your store. They will regularly check on new orders throughout the day so they are processed and shipped out to customers as quickly as possible.
A fulfillment specialist can also be responsible for adding tracking numbers to orders and letting customers know when to expect their package. Finally, they can deal with issues on orders that your customers may come across.
Of course, you can also automate some of these processes. You can always hire a freelance developer who can incorporate features into your online store that will satisfy the needs of your customers.
Trend #5: The Power of SMS
When you decide to outsource eCommerce operations, you should also consider the role of SMS in your customers’ daily lives.
While text messaging isn’t a new concept, not many brands are taking advantage of this medium to communicate with their customers. Did you know that text messages have an open rate of 98 percent, compared to 20 percent for emails?
SMS can be used in a variety of ways including informing users of in-store or online promotions, advertising opening hours, announcing new stock, and requesting customer feedback.
What’s more, SMS is an excellent addition to your customer service strategy. It allows for multi-channel contact points that people can use if they need after-sales support.
Outsourcing Solution
An SMS marketing specialist can help you reach more customers who are glued to their smartphones for most of the day. Some of the tasks they can do for you include:
Choosing the right keyword that’s relevant to your business and will resonate with your customers
Writing automated text message responses and scheduling them to send to subscribers once they join your list.
Creating valuable messages to convince visitors to opt-in.
Growing your list by sharing fantastic offers that customers can’t say no to.
Posting promotions on social media and inserting sign-up widgets and banners on your website
Developing deals and sending them out to customers regularly to reward subscribers for their loyalty
Start Outsourcing with FreeeUp Today
If you’re looking for the right freelancers that can help you achieve your scalability goals, then look no further than FreeeUp. As a freelancer marketplace, it caters to thousands of businesses all over the world looking to save time and money in the hiring process. Sign up today and create an account to outsource eCommerce operations for your business today!
While demand planning can be intimidating, it is the backbone of any eCommerce site. Inventory forecasting will help you increase profits, plan your sales goals, and show you when you need to order merchandise.
What Is Demand Planning?
Demand planning utilizes inventory forecasting to improve planning accuracy and align inventory levels with the demand cycle. In short, inventory levels are coordinated with customer demand. You want to have enough inventory to meet demand but avoid overstock. Solid demand planning lowers costs and leads to increased sales margins and profitability.
What Can Inventory Forecasting Do for Your Company?
Inventory forecasting is essential to profitable operations and increased customer satisfaction. Without accurate forecasting, maintaining a lean and nimble inventory can be challenging. Here is how your business can benefit from inventory forecasting:
Reduced Inventory Costs
Accurate inventory forecasting means lean and responsive inventory. In that way, businesses only purchase and store what will sell. Forecasting enables merchants to keep track of sales and anticipated demand.
When you have the right inventory amounts, you don’t need to order more than what will sell, and customers can enjoy accurate and timely delivery of their products.
Plan Your Goals
Know what your goals are for your inventory and ensure that they are realistic. There are many variables in your stock, and you must consider these when goal-setting. If you don’t have some reasonable idea of what will be needed, you run the risk of tying up your capital unnecessarily. Leading you to spend money that will not earn you an immediate return in the form of unsold inventory.
Determine Profitability
Inventory forecasting also makes it easier for you to project anticipated margins. You can determine how much will sell, what revenue you anticipate to receive, and how much profit you will eventually make.
Proper forecasts mean critical business decisions can be made with greater accuracy. For example, decisions regarding business expansion, cutting costs, or requesting outside funding can be made based on projected inventory and sales.
Insight About Your Current Stock
Forecasting provides a framework for obtaining detailed information. If you manage multiple warehouses, you can track the demand and availability of a particular product to determine the quantity you need. Forecasting allows you to plan for the pricing and movement of specific products in advance. For example, a product that sells well on the West Coast might not sell as well on the East Coast. Demand forecasting allows you to optimize your stock so that the right products are always in the right place.
Forecasting gives you visibility into your current inventory so you can make better informed and more strategic decisions. In seeing demand trends by category or product option, you’ll have more information to decide which new products to add to your catalog. For example, if red dresses show increased sales month over month for the last year, you can forecast that demand will continue to grow.
Order What You Need, When You Need It
Want to determine which products will be available and in what quantities? This is another reason to use demand planning. This ensures that you order items only when they’re needed, thereby saving on inventory costs and improving cash flow. More efficient ordering enables you to order the right items at the right time for customers. This leads to effective cost management and continuous growth.
How Does Inventory Forecasting Work?
To determine what inventory you should have, begin with a forecast of future sales. Sales for the coming 30, 60 or 90 days are based on past sales velocity and seasonality of the products.
Consider the following for an accurate sales forecast:
Sales velocity is the rate of sales, minus stockouts (days out of stock). Use sales velocity rather than average sales over the past 30 days because you want to know the rate of sales when inventory is available for sale. If you don’t omit days when inventory was out of stock, then you could underestimate future sales.
Seasonality will inform you if the emphasis for past sales should be on the most recent months or should be on trends from 12 months prior.
Sales trends show you if demand is holding steady or increasing in recent months.
While many factors come into demand planning, you simply cannot afford to ignore it. Inventory forecasting lets you to have the fingers on the pulse of your business. Your inventory will be adequate and nimble, making for greater profit margins and more money for you to invest in your business.
About Inventory Planner Inventory Planner launched in 2012 to help eCommerce merchants save time and money when purchasing inventory to better meet customer demand. Inventory Planner supports merchants as they grow to see information from all of their sales channels. Merchants use Inventory Planner’s replenishment recommendations and assist with inventory planning, forecasting, reporting, and purchase order creation. Learn more about how Inventory Planner helps Amazon sellers to forecast demand and improve profits.
