Your business is fraught with risk when you rely 100% on online marketplace sales.
Just because you are busy with marketplace sales doesn’t mean that your business is in good shape. In many ways, those eBay and Amazon sales are like a diet rich in sugar. They will give you a short-term energy boost but, in the long run, will potentially leave you feeling empty and prone to a crash.
eBay and Amazon Suspension
Consider what would happen if a marketplace you were selling on suddenly became unavailable to your business. This isn’t some distant threat. We regularly receive emails from retailers desperate to re-instate their eBay or Amazon account after being temporarily or even permanently being suspended from selling. Frustratingly, sometimes these marketplace suspensions are triggered by a successful run of sales that an algorithm can view as suspicious activities.
If your business has scaled its operation to manage 50% or more of your business from a single online marketplace and that sales platform suddenly becomes unavailable, you’ll find yourself in a lot of trouble. That sudden loss of 50% of your business won’t be matched by a 50% reduction in costs relating to stock, warehousing, staff, etc. In reality, you stand to lose a lot more.
What if that suspended marketplace accounted for 80% of your business or more? Worryingly
Difficult trading conditions
Then you’ve got to factor in all those less than optimised trading conditions offered by the online marketplaces, including:
- Not owning the customer relationship and being able to contact the client with targeted email marketing messages.
- Paying high acquisition fees for every sale regardless of how many times that same customer has purchased from your business.
- Competing with private, non-business registered, and overseas sellers with much lower operating costs.
- Competing with the marketplace you are selling on (Amazon) while simultaneously supplying them with all of your sales data.
And guess what! Selling on online marketplaces is getting more difficult. If you are not taking the time to optimise your marketing listing strategies on a regular basis, it’s not unusual to see your sales quite literally fall off a cliff.
We love eBay and Amazon, but it’s time to spread your risk
OK, we’re painting a rather bleak picture here. We love the world of online marketplace sales here at Frooition. Our business was started by eBay sellers who saw an opportunity to create beautifully branded eBay shops and listing templates. Looking to the future, we are fully committed to helping our marketplace clients optimise their eBay listings and maximise their potential on what is still the second most popular eCommerce site in the UK and US.
However, it would be remiss for us not to advise our clients to spread the risk.
We know that many of our marketplace clients have been considering launching their own eCommerce stores for, in some cases, many years. Yet, despite this, they remain addicted to the sugar rush of their marketplace sales.
If this sounds like your business, there’s never been a better time to make the change.
Summer is just around the corner; let’s start building
With the busy winter months behind us, now is the perfect time to start planning and building your eCommerce site.
While the “dog days of summer” might still seem a long way off, if you plan to use this potentially slower selling season to build a more solid foundation for your eCommerce business, now is the time to start researching your options.
Start now, and you’ll have enough time to plan and launch your new site and have the capacity to make sure everything is in place and ready for the winter peak (it’s never too early to be thinking about the holidays).
At Frooition, we’ll not only be able to walk you through the benefits of eCommerce platforms like BigCommerce and Shopify. We’ll also be able to introduce our comprehensive eCommerce partner network to make sure that your Martech stack is fully aligned and working as efficiently as possible.
To learn how the eCommerce design and build team at Frooition can help you build a more secure and profitable business, schedule a 15-minute discovery call with one of our eCommerce experts.