One of the biggest decisions you’ll need to make as an e-commerce business owner is also the one that could make or break your financial freedom.
How you control and distribute the products you sell through your site is a critical choice you have to make during the outset of your business development. In this post, we’re going to find out if the dropshipping method can help you attain financial freedom, or if managing the ebb and flow of supply and demand would be better handled internally.
Managing a profitable e-commerce business is a process that requires strategy, resilience, and a fair bit of trial and error. The day-to-day logistics of your business could change dramatically in the first year, depending on how much you learn and how quickly you learn it. Making changes is scary but necessary—and the more you understand about your options, the fewer changes you’ll need to make.
For some creative e-commerce business owners such as artists, musicians, and carpenters— dropshipping doesn’t come into play. If you make the product you sell in house, you never need to consider wholesalers. However, if you create digital designs for your products but don’t manufacture them, a big decision will be how to cost-effectively manage the manufacture and shipping of your orders. Continue reading
And interview with Webgility CEO Parag Mamnani by Ina Steiner for EcommerceBytes 411
Amazon is an important marketplace, but online merchants should not limit themselves to a single channel, according to Parag Mamnani, the founder and CEO Webgility (pictured). He also notes that as Amazon is bringing about commoditization, there is a side effect: The desire on the part of shoppers for quality, unique, and crafted goods. Mamnani says sellers should find creative ways to use Amazon and other marketplaces: “My advice is to sell products on multiple channels, including Amazon,” he told EcommerceBytes. “Some retailers break down their inventory and sell just a specialized sub-section on Amazon to move larger amounts at lower margins. And some sell in bulk on their own website versus moving a single product on Amazon.”
Giants such as Walmart, Jet, Target, Costco, and Rakuten are expanding their footprints, as the Facebook marketplace, the inevitable Google marketplace, and Pinterest Buy It buttons mean social media selling also looms on the horizon. “This gradual disruption will give small businesses more choices from which to sell their products and that will lead to improved experiences for both the buyer and the seller,” according to Mamnani.
That provides not only opportunities, but challenges as well: “That increase in choice will also mean there will be more systems for online merchants to figure out and integrate.” So what are the lessons for merchants – should they be content to rely on Amazon for a majority of sales, or should they be diversifying – and if so, how? “In 2017 there will be plenty of folks who don’t want everything they own to be found on Amazon, and that is why marketplaces like Etsy are booming and custom Shopify stores are being launched every day. The niche economy will be sustained and grow internationally as entrepreneurs are more educated, supported, and empowered by the larger global ecommerce infrastructure that’s found on marketplaces and platforms.”
Where should smaller sellers be focusing their efforts – commodities or niche? “In the coming year, niche products, crafts, and small-batch merchandise are going to continue to accelerate in popularity. In fact, the very commoditization of most goods will cause individuality and quality to rise in value and importance. And since consumers are all buying the same commodity items, those costs will be driven even further down.”
Mamnani’s company services merchants with a wide range of revenue, between $250K to $50M each year. “Their revenue growth usually increases quickly once they add infrastructure efficiencies like automating sales data, inventory, shipping, and accounting,” he said. “We find that ecommerce owners who take steps to get out of the day-to-day minutia of operations and begin to focus on growth and data analysis see very quick returns on their investment in technology.” Continue reading
Remove the hassle of e-commerce bookkeeping by integrating shipping and accounting
Today we’re thrilled to introduce Unify for ShippingEasy! This new offering will free online retailers from the hassle of bookkeeping for a multi-channel shipping operation by automating sales data and integrating it into their accounting solutions. Webgility’s industry-leading Unify software already makes it easy for sellers to build their business on any shopping cart or marketplace by connecting all revenue streams, expenses, and systems to have better perspective, make smarter decisions, lower costs, and simplify bookkeeping. Now, with Unify for ShippingEasy, e-commerce sellers can also vastly simplify shipping, even in their busiest seasons.
We think CEO of ShippingEasy Katie May put it best when she said, “Like ShippingEasy, Webgility is focused on streamlining e-commerce operations, and we are pleased to partner with them to take the accounting pain point out of shipping. Together, we will help online stores reach new levels of operational efficiency to help them increase profits.”
There are three main features of the new Unify for ShippingEasy:
- Accounting Sync: Unify for ShippingEasy allows businesses to achieve timely, accurate, and tax-compliant accounting. Stores can schedule and post all of their e-commerce sales and shipping information from ShippingEasy directly into QuickBooks or Xero. Users can choose to post individual sales or daily summaries while instantly closing the loop on their accounting activities by recording sales revenue, product costs, and shipping expenses within their accounting system for easy, complete reconciliation.
- Shipping Automation: Online stores can use Unify for ShippingEasy to consolidate orders from multiple sales channels, including all major marketplaces and platforms. This allows them to streamline workflows for accounting, order management, fulfillment, shipping, and inventory management, and enables instant cost comparisons between carriers based on type of product, weight, and geography.
- Multi-channel Selling: Unify for ShippingEasy helps companies easily increase their profits by having the opportunity to consider different marketplaces, sales channels, and platforms. The solution gives them confidence that their entire multi-channel business is seamlessly integrated with timely, accurate, and organized accounting. This unified perspective brings companies unprecedented control of their financial data and profit margins.
Growth is great for business, it means more opportunities, more partnerships, and more more sales
Due to complicated logistics, expansion is also one of the biggest risks of online businesses. For e-commerce stores looking to expand, international markets are prime opportunities. Countries like Germany and Brazil also have some of the fastest growing markets in the world, which makes them a tempting target for expansion. Buyers in certain countries may also be unable to source American products locally, and turn to international sellers to fill their needs. If your brand manufactures a unique product, there may be more international demand than you expected.
International markets are exciting and full of potential, but they also present expenses that could make or break your profits. The largest of those is international logistics; Warehousing, shipping, customs, and other costs. You can overcome these expenses by making smart choices for logistics partners, shipping solutions, and scaling at a reasonable pace. Many e-commerce businesses can scale internationally with no warehouse footprint, and greatly reduce the costs and risks of expanding into a new market. Without warehousing costs, even small businesses could successfully expand into new markets without the traditional risks.
Research your opportunities
Analytics: The first step into expanding is to ascertain demand in your new target markets. It doesn’t matter how affordable the logistics are if there’s no demand. It is crucial that you spend a significant amount of time in market research before expanding into any new channel. This is doubly true for international sales, which present more risks than moving to a new sales channel or selling in another state. If you want to succeed, take the time to identify your market demand, marketing opportunities, your target audience, potential consumers, and your international channels and opportunities. Read more