25 Jun Myths About Expanding to New Sales Channels
This article was contributed by Jeff Lieber and his team from TurnKey Product Management, an Amazon consulting company. With over 12 years of Amazon experience, over 150K products sold, and over 8 figures in revenue made for our clients in the past year alone, we are uniquely positioned to help brands scale their sales on Amazon through a variety of services: full-service management, Amazon PPC management, 1-on-1 coaching, standard operating procedures, online trainings and more.
Let’s start by polling the audience… how many of you reading this sell your products online? How many of you sell your products online AND in stores? How many of you sell on just your own website? How many of you have more than one sales channel online? If you answered “yes” to the last question, you win! Ding ding ding! But even if you don’t sell on multiple channels yet, our hope is that you’ll feel compelled to expand after this article. Today, let’s talk about three myths brands believe about selling on multiple channels online.
Myth #1: I don’t want to sell online outside of my own website because I don’t want to cannibalize on my own sales.
We hear this ALL THE TIME! While it’s true that you might lose a website sale to your own Amazon listing, and end up paying 15% on that purchase to Amazon, it’s also true that that sale may not have existed in the first place if not for Amazon. Some of our clients even choose to increase their prices slightly on Amazon in order to compensate for that commission, and customers don’t mind (or don’t notice).
While paying a 15% commission isn’t super fun for anyone, did you know that 9 out of 10 online shoppers check Amazon before making an online purchase? If you aren’t currently selling on Amazon and you are not even giving customers a chance to find you! While they might not have heard of your brand before searching for a yoga mat or dog bed, if you’re relying solely on your website to get discovered, you might be waiting a while!
Another thing is that many customers may find you in one place, and end up shopping in another. There have been many times I have found a product on Amazon, loved it, and then wanted to know what else that brand had to offer so I went to their website. There are lots of strategies to encourage customers to find out more about your brand, deals, new releases, etc… and in the end become one of your loyal customers.
Myth #2: I don’t need to sell on multiple channels because I’m already crushing it on my website.
You can be totally crushing it on your website AND you can be missing out on massive additional revenue if you aren’t selling on multiple channels. Think of the cost it takes to acquire a customer on your website. Think of the hurdle it can be to get people to trust your site enough to get out their credit card and input their information. Honestly, many people don’t shop on independent brand websites that are new to them, because they feel weird about giving out their credit card information. That being said, most of us already have our credit card and shipping information saved into our Walmart, Target, and Amazon accounts. There is so much ease that comes from shopping online with big box stores, and it can be such a hassle to enter billing info on a brand new website.
We highly recommend expanding your product’s presence beyond your own website to diversify your audience opportunity. Take advantage of a bigger name store’s credibility and take the steps to have your products ride their coattails!
Plus, what happens if the sky comes crashing down and your website crashes, or your retail store has to shut its doors, or Amazon isn’t accepting new shipments on non-essential items? Sound familiar? You don’t want to put all your eggs in any one basket. Diversifying your sales channels means you are spreading out the risk to various channels, and even if one takes a dip, you have others to help you ride the wave.
Myth #3: Amazon is the end all be all. If I’m selling there, I’m in front of the biggest audience and I’m good to go.
In the same way, we don’t recommend selling only on your website, we also don’t believe you should only be on Amazon. At TurnKey Product Management, Amazon is our jam. In fact, if you need help, we’d love to support you in growing your sales on Amazon (check us out here!). That said, we’ve had numerous clients come to us looking to build an Amazon-only business, and we start to sweat a little. Customers can sniff out an Amazon-only, sales-driven business from a mile away. Sometimes I’ll look to see if a certain earbud company I found on Amazon is selling anywhere else, and when they don’t have their own site and they don’t exist beyond this one platform, I do worry a bit about the quality of the product I’m about to purchase. Not only do customers want to deem your business as credible, but we haven’t even talked about how the multiple of your business increases for potential buyers of your company if selling your business is a future goal. It’s one thing to have proof of concept and sales on one channel, but to have a strong track record on multiple platforms further proves the value and potential of your brand. Buyers love to see not only high revenue, but also a diversified risk.
And it goes back to Myth 2 about the importance of diversifying in case one platform tanks. In the same way you don’t want to rely solely on your own website, you also don’t want to rely solely on Amazon for all your revenue. Anything can happen, and not only is it financially responsible to branch out, but you become so much more credible if you have your own website and your products appear in multiple places. Even if you create a website that has a cart that ends up fulfilling through Amazon, the appearance of an external website is incredibly validating.
As we’ve seen in this pandemic, stuff happens in the world, and that stuff can highly impact our sales channels. Don’t let changing Amazon policies, closed storefronts, increased competition, or a decline in the economy impact the bottom line of your business. Entrepreneur Victor Kiam once said, “You can hype a questionable product for a little while, but you’ll never build an enduring business.” While we can’t control everything about our business, and we certainly can’t control the economy, taking steps to diversify our sales channels is one way we can be proactive in increasing our revenue, building brand awareness, and building our empire! So get out there and take action!