Just like that, it’s October. It’s the Fourth Quarter. If you’re not feeling an increase of pressure, just wait, soon you will. Fourth Quarter, particularly the second half is going to be busy. First the build up to Halloween. Then Thanksgiving, which really seems to just mean more shopping and finally, Christmas. Each year more consumers head online to look for deals, you can expect that this year will be bigger than last. You can expect sales growth.
Now, I want you to think about the 2018 Holiday season. 2018, fast forward a year from now.
Think about how you can grow even more next year.
The answer: expanding. We’ve talked before about expanding into other Amazon marketplaces, Europe and Japan are good to look at. If you missed that episode, listen to Episode 12.
But what about expanding beyond Amazon? This week, we’re leaving the Amazon Marketplace, to talk about where else you should be selling and why.
“If you’re going to sell products you might as well embrace the marketplaces and embrace them all,” says former Amazonian Peter Kearns.
Peter used to work at Amazon, identifying holes in the Amazon catalogue and then he would find sellers to fill those holes.
For third party merchants, marketplaces are powerful. Traditionally, for normal products to get into brick and mortar spaces. It’s a complicated and long process. First, you have to convince someone at the the store to distribute your product. Then there’s pricing. You typically price your products at a wholesale price for distributors and that can be 50 to 60% off of retail price. Then you have to make sure your product has to look good.
“Having to create this consumer end cap type packaging, all that stuff, super expensive,” Peter says.
Plus you have to buy shelf space. You end up pumping tons of money into it and you don’t know if it’s successful or not because you haven’t gotten it out there yet. Brick and mortar can be a complete gamble for products.
There’s several other marketplaces besides Amazon.
Walmart, Jet, Thrive market, and Ebay.
You should be selling on all of them but only if your product makes sense on all of them.
“The only thing I would look for in terms of marketplaces is, who is your end customer and is that customer shopping on those marketplaces?” Peter asks.
For example, Thrive Market, it’s for organic and natural food products. So, if you’re selling pillows, your pillows won’t be a good fit for Thrive, but your pillows will work for Amazon, eBay, Walmart and Jet.
Peter’s now the Vice President of Client Solutions at 180Commerce. He helps merchants expand on new marketplaces.
When you decide to expand, you don’t want to jump into every marketplace right off the bat , first, make sure your Amazon business is successful.
“Have your Amazon business a well oiled machine,” says Peter, “Know exactly what’s going on.”
Next, look at the economics of your business. Does it make financial sense to expand to other marketplaces? You need to figure out if it will cost more money to expand to another marketplace than you can make by selling there.
“So you’re spending more money to sell, market it, process the orders or getting in the fulfillment networks, whatever, so that’s the only time is when it’s not making any money but if you have the ability to to sell the product and it’s running on all cylinders than expand into those other marketplaces,” Peter says.
Keep in mind, Amazon will still be your biggest money maker.
“They won’t equate to the same amount of money as Amazon does at this point because Amazon is so powerful,” says Peter, “Amazon’s going to have 60-80% of your revenue and the collective marketplaces will make up the rest.”
Now, this is important: don’t expand just to expand.
You want to expand, yes, to grow, but also to protect your product’s brand and pricing on other platforms. If someone else has arbitraged your product on another marketplace. it’s going to throw off your pricing and brand presence on Amazon.
“If you are a brand and you don’t necessarily want to be selling on Walmart right now but you don’t want someone else to be creating your content, you probably want to create content on there so you’re in control of it,” Peter says.
So, your Amazon presence is doing well and you’re ready to move onto another marketplace. You may want to launch on several or launch on one at a time. That all depends on the time and amount of work you can put into it. If you have the time and resources, launch all your products on other marketplaces at the same time. If that workload is too much, start with one at a time and grow from there. There’s also companies that can help you with this process.
Some products, aren’t a good fit for marketplaces at all, mainly, luxury products.
“You sell something on Rodeo drive and on your website, you may not want to necessarily sell on Walmart,” Peter says.
Thanks to Peter for joining us for this episode. If you want him to help you launch in other marketplaces, reach out to him. You can find him at www.180commerce.com.