How to approach and manage online sales is becoming a central question for retailers in almost every business sector.
Some, such as cosmetics and lifestyle apparel, are leading the charge for direct selling to consumers, while others rely on eCommerce intermediaries to handle their storefront. Others, such as grocery brands and other consumer packaged goods companies, have yet to fully define their e-commerce strategy.
While every strategy has its pros and cons, there’s a lot to be said for keeping a hands-on approach to online retail and delivering the brand experience that your customers expect. This article explores three compelling reasons to retain control of eCommerce.
Better Control Through Collaboration
What does it take to handle your own online retail solution?
First and foremost, it doesn’t mean you have to go it alone. Essentially, it’s saying that you choose to maintain control over the decision-making around how and where you sell online. While that aspect stays in-house, the choices around who designs the system and who handles day-to-day operations still leave a lot of room for outside help.
The choice boils down to being your own retailer: having the ability to set your own standards and make adjustments as you see fit, while engaging knowledgeable service providers to fill the gaps that fall outside your core business model.
In an increasingly competitive marketplace and with consistent downward pressure on margins from large retailers, many companies are looking at ways to sell
3 Reasons to Retain Control of eCommerce
Despite the promise of taking this path, it’s understandable that many companies find it daunting to develop their own online retail presence, rather than leaving it to an online retailer like Amazon to manage things for them.
With that in mind, the three primary reasons to retain control of your eCommerce offering are:
- Establish greater profit margins.
- Better control over brand messaging and the customer’s experience.
- Customize a flexible fulfillment solution to your own standards.
Let’s take a look at each of these items in more detail.
Improve Your Margins
When you hand over almost all responsibility for online sales and fulfillment to a giant like Amazon, it follows that you also hand over a sizeable chunk of your profit margin.
Because of their sheer size and aggressive approach to a highly competitive sector, online retailers will always charge higher fees than a traditional fulfillment partner. This usually comes on top of substantial commission fees and very little scope to negotiate them lower, as the likes of Amazon typically hold all the cards in this scenario. All of this puts downward pressure on your profit margins, while a more customized solution with third-party service providers allows much more room to decide who does what and how much it’s worth.
For more on this aspect of eCommerce fulfillment, with a specific focus on the CPG sector, be sure to read the thoughts of our CEO Jeff Kaiden at last year’s FRAIN conference.
Control the Brand Experience
Wrapped up in the decision to sell online is the opportunity to go straight to your customers and provide a more engaging brand experience. Selling directly removes the barrier between consumer and producer. It opens up a two-way selling process that not only facilitates promotion of what you make, but also gives fans a way to tell you what they like, what could be improved, and what new items they might like to see from you in future.
By retaining control of your eCommerce solution, you can effectively be your own retailer. You choose what aspects of the product and brand to emphasize, how and where you promote them, and what kind of perks or privileges customers will get.
Along with engaging key influencers, building a good reputation is a vital part of success in online sales. Beauty brand Glossier exemplifies this quality, as the video above demonstrates. If your business is unable to manage some of the key elements of the brand experience, from a seamless order experience to perfect packaging upon delivery, that reputation can quickly be tarnished by failures that are out of your control.
A simple, formulaic eCommerce solution might work for some brands, but if it’s not coupled with reliable service and
Set Your Own Standards
Being able to set your own quality standards is an important consideration for brands in any industry. For those who place quality at the heart of their brand promise, it’s absolutely essential.
Quality is a fundamental trait for many brands. It cuts to the core of what they stand for and there’s very little room to slip below the high standards that their fans expect.
Although the larger online retailers might guarantee a minimum level of delivery, they are unlikely to bend to the exacting standards or higher performance metrics that established brands require. Their solutions are typically less flexible and designed to minimize cost and maximize profitability for the retailer, rather than meet the standards of your brand.
Retaining control of your eCommerce solution affords your business greater ability to set the standards and service levels you demand.
The beauty of this model is that there are so many ways to work together with your service partners to monitor and improve quality. Whether this means having a dedicated on-site resource to represent your brand or bringing a third-party’s team and system under your own roof, there’s much greater accountability in this approach.
In many ways, this gives you the best of both worlds when it comes to maintaining control. Your business has its pick of service providers and maintains the leverage of a client-supplier relationship, while also being able to keep key functions in-house or explore your ability to perform certain activities before deciding whether to contract them out to a third-party.
Expanding into direct-to-consumer retail via online channels is a challenging evolution for most brands. Rather than simply handing over the keys to an established eCommerce platform and hoping for the best, many businesses are turning to experienced third-party providers who offer more nuanced and flexible fulfillment solutions.
Far from going it alone, embracing the opportunity to be your own retailer opens up a whole new world of experienced and committed fulfillment professionals for your business to call upon. In many cases, these partners will be almost as committed to delivering your brand promise as you are.
Cultivate the right strategic third-party partnerships and you’ll realize the benefits of online selling without giving away control (or sacrificing your margins!)