Online retailer strategy

When you sell through online retailers, you make a trade-off. There’s less complexity than selling direct because the retailer manages some parts of the process. But that also means, you also have less control over the online selling experience. To build your online retailer strategy, you need to understand the pros and cons of each of the different online retailer channels. Read our guide to find out more.

Online retailer strategy

How this guide raises your game.

  1. Learn what the four main online retailer channels are.
  2. Look at each online retailer channel in more detail with examples and learn the pros and cons of each for your online retailer strategy.
  3. Identify the key skills you need to grow your sales with online retailers. 

Setting up your own online store gives you the most control over the online selling experience. But it also means you need to manage ALL aspects of that experience too. And many of those aspects like payments and delivery can be complex.

When you sell through online retailers, they take over many of these complex challenges.

But not all e-Commerce retailers operate in the same way. Or, even offer the same types of services. 

So, in this guide, we’ll outline the four main online retailer options. We’ll cover the pros and cons of each. This helps you build your overall online retailer strategy. 

But to bring your online retailer strategy to life, you also need to activate it.

So, we close with a review of skills like digital performance management and account management that should underpin your online retailer strategy activation. 

Amazon logo on phone

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Building your online retailer strategy

In the e-Commerce planning process, you normally look at e-Commerce channels after you identify and validate the online selling opportunity.

The opportunity identification and validation stage should have generated market research that you can continue to use to review online retailers, and build your online retailer strategy.  

This market research should have identified which e-Commerce channels are available in your category. And of those channels, you should have an idea which ones are the most popular with online shoppers. 

e-commerce planning process - The 5 key steps of the e-commerce process

The exact number of visitors and amount of sales going through each channel or customer may not be available. But, you can use secondary research tools like Google Autocomplete and Google Trends to get an idea of which online retailers are winning online, based on their search ranking and volumes.

The more you sell, the higher you tend to rank in searches.

But knowing which online retailers are most popular is only one part of your overall online retailer strategy and plan.

Control and complexity

You also need to decide how much control you want to have over how your products are sold online.

You also need to consider the amount of complexity you can handle in your business, and how much you want to outsource. 

Direct selling carries the most control and complexity. Check out our series of skill guides on this topic if you want to avoid online retailers completely.

But for this guide, we will obviously focus on online retailer channels. There are four online retailer channels to choose from, when you want build your online retailer strategy.

e-commerce planning process graph showing 5 key channels level of complexity and control

There are marketplaces, bricks and clicks, pure players or drop shipping / print on demand.

Reviewing these channels forms the “external analysis” part of your strategic planning.

Each brings different levels of control and complexity. You need to then match how much control and complexity your business wants and can manage (your “internal analysis”) to start to define your strategy.

Impact on financials

This control / complexity trade-off is important for your online retailer strategy. The level of control and complexity impacts your financial performance – your sales, costs and profits from online selling. It impacts what skills you need, how much you need to spend, and what your profitability will be.

For each part of the selling process the online retailer manages, the bigger the share of the selling price they take. Which of course, means you receive a smaller share of the selling.

This shouldn’t be too much of a surprise.

Each step of the e-Commerce process comes with costs. So, when the retailer has to cover the cost, they take more of the selling price to cover those costs.

Your online retailer strategy then means you need to find the right balance of control, complexity and financials to suit your online business model. So, let’s have a look at the four channels you have to choose from.

And with each, let’s consider how they might impact your online retailer strategy.

Marketplaces

Marketplaces are online selling platforms that set themselves up to host online sellers. They make it easy for transactions to take place between sellers and buyers. 

Marketplaces are the simplest way to sell online for anyone. They are well suited for beginners to e-Commerce. They exist to make access and management of online selling as simple and straightforward as possible. 

As a sales channel, they work a little like the digital version of classified ads you find in newspapers and magazines. They suit individuals who want to sell specific items at a specific point in time. They work particularly well for one-off high-value items like cars and electronics. 

Let’s look at some of the bigger marketplaces you can use. 

Gumtree

The most well-known marketplace sites in Australia are Gumtree and ebay. We’ll come back to ebay shortly, but let’s start with Gumtree. 

Gumtree was bought by ebay in 2005. Though, there was a change in ownership structure in the middle of 2020, ebay retains a large stake in the new business. 

Gumtree claims over 7 million users and 3 million listings, with 80,000 new listings daily. 

 On Gumtree, you post adverts for the product or products you wish to sell. You then deal directly with the responses and buyers, to manage the sale and delivery.

Online retailer strategy - Gumtree home page

In this case, it’s more of a digital media channel than a true e-Commerce platform.

You, as the seller manage any postage and delivery. And, payments are usually managed through PayPal.

Gumtree itself, has very little to do with the online selling. It makes its revenue from the fees paid to post and promote adverts.

It works best when selling one-off items in high price categories. In particular, second hand products like cars, electronics and furniture sell well here.

But, while online shoppers can undoubtedly find bargains on the site, it has limited value from a selling point of view.

Online car boot sale

The fact that it is so open access to all, means it has a really crowded feel. The structure of the site feels a little chaotic. Because ‘anyone’ can sell through Gumtree, the quality of the advertising of products and services can be variable as sellers take their own product images and write their own sales copy.

It can at times feel like an online car boot sale,

If you plan to sell regularly, it is difficult to build your brand on Gumtree, because of the noise and the variable advertising standards. There’s always lots of competing offers. It’s hard to make your brand stand out. It’s hard to build a premium brand image. And the site doesn’t give you a lot of options to fix that.

ebay

ebay is a better experience from a pure selling point of view. It suits more regular sellers, as it puts more structure into the selling process. 

They offer more services for the online seller. 

For new or small sellers selling up to 40 items a month, there’s no listing fee. So, it’s small, but helps with reducing your marketing costs. 

For regular online sellers, they offer the opportunity to set up and design your own store front through the ebay Seller Hub.

Online retail strategy - ebay home page

This gives you more flexibility in how your products and shop “look” on the ebay platform compared to Gumtree. But, you are still limited by their templates and site design.

Like Gumtree, you still need to make your brand stand out. The Seller Hub has its limits, but it can be a useful stepping stone towards running your own online store. It lets you build more of a distinct brand feel for your online store. You also have access to more digital data than you would when selling as an individual.

Ebay also let you have control over price. Their original business model was as an auction-price site. Though, you now have the option to set auction and fixed prices with them.

They can help manage payments. For every transaction, ebay take a 10.9% fee from the final payment amount. Depending on the category, they may also take other listing and transaction fees.

Ebay do not however manage the products, shipping and delivery for you. So any online sales you generate though ebay, you need to plan how you will then deliver that product to the buyer.

Ebay do have more processes in place to protect buyers and sellers. “Bad” accounts can be reported and removed. So, it feels like a more controlled selling platform than Gumtree.

Renting a small store in a large mall

The main benefit of ebay is the large number of online shoppers who go there. When people visit the ebay site, they are in product search and “buy” mode, so you have access to high potential shoppers who might be interested in your product.

When you work with them, it’s a little like the digital equivalent of renting a small store in a large shopping mall. In fact, a lot of major retailers like Coles, Chemist Warehouse and Myer sell though ebay.

However, there are some challenges to selling through ebay.

You have to abide by all ebay selling rules and processes. The only changes you can make to your store are those pre-defined by ebay. You will not have the same flexibility to change as you would with your own online store set-up.

So, you can change design elements of your ebay “shop”, so it feels more branded, for example. But you can’t change much of the functionality. If shoppers drop out at a certain stage for example, it’s more difficult to diagnose why. And, to find a solution to improve sales.

You won’t be able to add any extra technical support systems, for example. With your own store on Shopify or WooCommerce for example, you can add lots of extra support and functionality.

Not possible with ebay.

With ebay, you “rent” space on their platform. So, you don’t have any “ownership” advantages, as you do with your own store website.

Search traffic to your product on ebay might drive sales, but you get no search boost for your own site. You have limited access to data to build up your CRM data.

Ebay’s an interesting option to sell, with definite pros and cons for your online retailer strategy. Its biggest pro is just how popular it is. But it’s biggest con, is the lack of flexibility to really tailor your offer.

Etsy

Another popular marketplace option is Etsy.

Etsy operates more like an artists’ marketplace. It focuses on only three categories. And, it tries to create more of a community feel around those categories. 

These three categories are handmade items, vintage items (over 20 years old) or craft supplies.

So, if your business is making jewellery or handbags, or you make or collect fashion items, Etsy is a good option for you.  

While it is free to join the site, there are a couple of things you need to consider with Etsy. 

Online retailer strategy - Etsy home page

Firstly, there are the fees it takes for “hosting” the transaction. So, for example, Etsy charges these fees …

– listing fees, shipping transaction fees, transaction fees, payment processing fees and currency conversion fee

… for each transaction. Added up, these can take 15-20% off the amount you actually receive from the sale. You need to cover your production, shipping and advertising costs from the selling price, after these fees come off.

You have to manage your own stock and shipping. And, you have limited flexibility to manage how your “shop” looks on Etsy.

Etsy only really covers two parts of the online selling process. They give you a proxy online store website, so somewhere you can sell. And they manage payments part of the e-Commerce selling process.

But given, setting up an online store website is one of the easier parts of selling direct, many people who start on Etsy decide the margin they take is too high for what they do. So, many of them who are successful move to selling direct. This gives them more control and they make better profits.

Facebook Marketplace

Facebook have also tried to build their e-Commerce and online selling presence through the use of Facebook Marketplace.

Operating like an online classified ads site, it runs on a similar model to Gumtree. It aims to bring buyers and sellers together.

But, it has very little to do with the actual transactions.

 

Online retailer strategy - Facebook marketplace screenshot

So it’s more of a digital media channel to tell people what you have for sale.

Its main benefit is the high number of people who use Facebook on a regular basis. So, it can be a useful channel to reach potential customers.

However, it suffers from similar challenges  to Gumtree. Universal access for everyone lowers the overall average quality of advertising on the channel.

For one-off sales of high value and second-hand items, it can be an interesting channel. But, it’s less well suited to regular selling.

Other marketplaces

We’ve focussed on the main marketplaces we see as being popular in Australia. But there are many other marketplaces out there that should be on your e-Commerce radar.

In particular, those that operate internationally. 

For example, T-mall which is part of the Alibaba e-Commerce empire, gets huge amount of traffic in China and other Asian markets. 

The Lazada group, again part of Alibaba is another popular platform through South East Asia. 

 

Online retailer strategy - tmall home page

Marketplaces are popular because of their easy set-up options for online sellers. Your products can be available to buy very shortly after setting up an account. You can also change around your product range and offers relatively easily, without a lot of technical know-how.

These sites get a lot of visitors, and those visitors are looking to shop. This makes them attractive as a source of high potential customers. It’s easier to sell to customers already looking to buy, than those who aren’t.

And while none of the sites offer the benefits of managing deliveries, the ones which offer payment options, can also make it much easier for online sellers who are just starting out with selling online.

But for online sellers with more experience, and who want more control, there are disadvantages of using marketplaces.

The lack of flexibility to influence the shopping experience can lead to frustrations. When your products aren’t selling, you may not have access to the tools you need to fix it.

In general, you’ll also find that these platforms take a relatively high percentage of the selling price in fees and commission. If you can manage the complexity of shipping and deliveries, you can normally create better profit margins in other e-Commerce channels.

It can also be frustrating not to “own” all elements of the shopping experience, especially the data and the functionality of the site, and the order to delivery process. When this happens, it’s then that other online retail channels come into play as part of your online retail strategy and plan.

Bricks and clicks (traditional) retailers 

Bricks and clicks retailers (sometimes also called omni-channel retailers) have both physical stores AND an online store.

Compared to marketplaces, they offer quite a different selling model. They buy and hold product from you, to then sell on to the end shopper. 

 

Toothpaste category at Coles online

The benefit to you then is that you only deal with the buying team at the online retailer. You don’t have to manage any of the challenges of managing individual transactions. The online retailer pays you for the product, then takes responsibility for selling it. This  includes payments, delivery and customer service.

This means this online selling model is relatively less complex than other e-Commerce channels.

You would partner the online retailer to drive sales using similar marketing activities to how you would manage sales through their traditional physical stores.

So, for example, market research and insights into the shopper needs, advertising and media campaigns to increase the appeal of the products and sales promotions to drive sales. 

It’s just that each of these processes is seen in the context of e-Commerce when it comes to selling through their online stores.

Screengrab of bottled water category at Coles online

So, the market research relates to online shopping. The advertising and media appear in digital media channels. And the sales promotions have to work online, rather than in-store.

But, there’s more to consider when it comes to selling online through bricks and clicks

Bricks and clicks business model

Bear in mind, compared to some other e-Commerce channels, you give up a level of control and share of the retail selling price, when you sell through bricks and clicks.

You supply product images, information and recommend pricing. But, how all of these actually appear in their online store is ultimately down to the online retailer, not you. 

If they want to sell your product differently, that’s their choice. 

For example, if the online retailer decides to price promote your product, or change the selling message, you don’t have a lot of scope to influence this. A lot will depend on your ongoing relationship with them, and how transactional it is.

If you add extra value, like market research, advertising, media and sales promotion support, you can use these investments in selling to persuade the online retailer to go with your view. 

But, your competitors are also doing this. Online retailers will always do what’s best for their business, not yours. Your aim is to present solutions that work for them and you. This relationship is normally formalised as part of your ongoing commercial agreement with them.

Commercial agreement – online considerations

With these types of retailers, it would be unusual to have a completely separate commercial agreement with them for offline sales and online sales.

They normally form part of the overall commercial agreement that covers prices, quantities, and operating principles. 

But within that agreement, there may well be online retail specific commitments and terms. 

 

Dollar signs in lights

For example, these may be as simple as committing to supply relevant and up-to-date product images and information. But, a clause such as this also needs to cover how often such information needs to be reviewed and updated. It needs to be clear whose responsibility that it is.

Terms might also be needed to identify who is legally responsible if any wrong or misleading information appears. So, it might be “your’ product information, but on “their” (the retailers) website. What if something goes wrong? What if inaccurate allergy information is included on a food product for example, and someone falls ill? Your online retailer agreement needs to make clear who is responsible in those circumstances.

Complaints and refunds

What if your product sells, is delivered but the customer isn’t happy and complains? The online retailer will manage the refund. But do they suck up the cost? Or do they come back to you to repay their costs? Your commercial agreement needs to identify circumstances where you will cover refunds. And when you won’t.

If your product needs special packaging for online deliveries, say it’s fragile or needs to be transported under certain temperature conditions, who covers the cost of that? Your commercial agreement needs to be clear who pays for this. 

If the product is damaged while being delivered, who is responsible for covering the cost of that? Again, this needs to be clear in your commercial agreement.

Because if any of these clauses aren’t clear, the online retailer will push the costs back on to you.

Commercial agreement – supply chain

Each online retailer will also have their own supply chain set-up for online sales. 

So, they may manage online orders from a central warehouse. Or they have people to pick online orders from the shelf in-store. 

From your point of view, you need to understand how these systems and costs work. 

Who pays for the costs of moving products to these different distribution points? At which point does “ownership” of the product move from your business to the online retailer? 

Warehouse palet

You also need to understand how the online retailer will manage stock levels.

For example, how fast do you need to re-supply when they sell products? And, do you need to limit the number of items individual shoppers can buy at any one time, so they don’t drain your stock for example?

When you work with online retailers, your retail prices and sales promotions will be very visible to other online retailers. If you run different activities with different retailers, you need to be clear with them, why they get one activity and their online competitor gets another.

Be prepared for online retailers to look for better deals, based on what you do with their competitors.

Bricks and clicks – how to move forward

Your online retailer strategy and plan needs to work through all these types of questions.

It needs to understand who the most popular bricks and clicks retailers in the category are. And, how they operate.

None of these challenges are impossible. But they will take time to work through, as you have to persuade and influence the bricks and clicks retailer.

Think about the marketing support you can offer them. Think about the value of your products. What can you get in return for that?

What sales and shopper data can they share with you, for example? For privacy reasons, you will be unlikely to get access to specific individual shopper data. But you should be able to get access to aggregate sales data. This information can feed back into your marketing plan.

And as we cover in our guide to how to get more sales online, you should be able to run promotions through their CRM program.

You don’t have control over their website or supply chain systems. But you need to organise yourself to make sure you can meet the needs of the bricks and clicks retailers in those areas.

Pure Players

Pure players are stores who have no physical outlets. They are online only. 

Like Bricks and Clicks retailers, they generally buy the product from you. And then, they take ownership of selling that product online through their online store. 

Many of their advantages and disadvantages are similar to bricks and clicks. They make it easier to sell online for example as they operate the online store. And they manage the payments and deliveries. But, they also control how your product is sold. It’s their order to delivery process that supports the sales. 

Different ways of working from bricks and clicks

However, the way they work, does bring some different factors in to your online retailer strategy.

Because Pure Players have no physical stores, they don’t have to manage the costs of owning and running physical stores. That affects how much of the selling price they want. This also means they focus more on managing costs in storage and delivery . 

They aim to keep costs low and often have the lowest delivery charges. They have no legacy systems and processes to protect and manage, unlike Bricks and Clicks retailers. 

Because their business is 100% online, they are more likely to operate in a digital way. They’ll move faster. And they’ll focus on improving the online customer experience. They’ll often be the first to introduce new marketing technology breakthroughs. 

Because, they focus so much on the online shopper, they are likely to gain a disproportionate share of the online market. So, for your online retailer strategy, they bring a lot of additional advantages over and above selling through bricks and clicks. 

Amazon

When you look at Pure Players, it’s hard not to start with the most well known of them all. And that’s Amazon. Although, with the purchase of Whole Foods in the US, you could argue that they are technically no longer a Pure Player. 

But even if they do now own physical stores, their approach to doing business is still very different from traditional Bricks and Clicks retailers. They actually operate two selling models – Vendors and Marketplace. 

Amazon Vendors

In the ‘vendor’ model, Amazon operates like an online retailer. They buy your products from you. Then, they sell them on their main Amazon site. 

They set the selling price. But you can access a series of marketing tools that Amazon provide in order to improve the sales of your products. 

These marketing tools are usually more advanced than what traditional bricks and clicks retailers offer. Amazon have global scale. They have a history and a track record of investing in customer experience improvements.

That, along with their high level of visits, make them attractive to work with as an online retailer.

Amazon logo on phone

Amazon vendor services and marketing tools

However, one of the challenges is that good as these marketing tools are, you do not automatically get access to them when you become an Amazon vendor. They charge for everything. You pay to drive your sales on their store. 

So, for example, if you want access to a good level of sales data about your product, you need to pay for it. This service called ARAP – Amazon Retail Analytics Premium – charges a % on every transaction you do with Amazon. 

With Amazon, you generally don’t even have a dedicated account manager for your business. The “buyer” will manage a large range of products within a category. If you want more personalised and bespoke support, this comes at an additional cost. It is part of their service offer called SVS – Strategic Vendor Services.

So those can be costs BEFORE you even get to the ‘marketing tools’. 

Amazon updates their marketing tools regularly, but nothing is freely given. If you want to access A+ Content and Vine for example, which help create better product pages and generate faster reviews, then yes, more cost. 

Listing your products in Subscribe and Save and Events can be great for driving sales. But again, come at a cost. If you want to work with the Amazon Marketing and Media services to run ads or improve your search position on Amazon, all those things come at a cost.

Amazon is undoubtedly an interesting retailer to consider when building your online retailer strategy due to their high reach. But we recommend you do some research into their offer before engaging them.  Make sure you have identified and are happy with the selling costs, before you commit to working with them as a vendor.

Amazon Marketplace

Amazon also offer their own version of the marketplace offer we mentioned earlier in this guide.

In this model, Amazon don’t ‘buy’ your product from you, they rent you space on their website for you to sell your own products. They take a percentage of the sales price as commission on each sale. 

In this case, since you are the retailer, you do have control over the pricing. However, you don’t have access same level of marketing support that is available under the vendor model. 

They manage the payments, and you have some options where they can also manage the delivery. You can also choose “Fulfilled by Merchant”  where you manage all the orders and delivery yourself.

 

Amazon box model

Or, you can choose  “Fulfilled by Amazon” where you use Amazon’s supply chain set up and they deliver it for you. Of course, they do this for a much higher percentage fee of the transaction.

Whichever way you sell through Amazon, they’re generally much more focussed on the online customer than traditional bricks and clicks retailers. This means they want to make it as easy for you to sell online as they can. It’s in their interests to sell more, as they take commission on every sale.

It helps keep their costs down, they more items they sell. That, and making you pay for all their services.

So, in terms of control and complexity, they do offer that extra level of control over the selling process that is harder to achieve with bricks and clicks retailers.

But they do also bring some additional complexities.

Amazon complexities

We have a separate article which goes into more detail on the challenges of working with Amazon. But in short, you will likely face tough negotiations with them. They are big for a reason, and they squeeze suppliers hard on margins and fees. And that’s in fact, if you even get a chance to negotiate with them. 

They are a notoriously ‘lean’ organisation in terms of the number of employees. They try to automate as much as possible, and reduce the number of contact points. That applies to how they deal with customers AND suppliers. So, unless you sign up to their way of working, they won’t make it easy to work with them. 

It can be challenging that they charge for EVERY service they provide. Even down to having sales data and having someone who manages your business. You have to work through their costs and fees very carefully, to make sure you are clear on what you sign up for.

Other Pure Players

Amazon offers the broadest range of goods in the Pure Player space. They started with the ambition to be the “everything store” with the widest range of products.

Many others have tried to copy this model and been less successful. It’s only really the pure players who have been successful in China and South East Asia like alibaba who offer real competition for Amazon on a ‘widest range basis’.

Where you do however, find more competition is when the shopping category is more specific, and less wide. And, some categories tend to work better than others when it comes to online selling.

Online retailer strategy - tmall home page

So, for example in fashion, you can find online pure players like The Iconic and ASOS. The wide range they offer, and the relative high value of clothing helps make their business model work. Similarly, in beauty, pure players like Adore Beauty do really well.

Categories with products that are heavy or bulky also pull in pure players. So for example, alcohol pure players like Boozebud and pet food suppliers like Pet Circle

In general these types of players work to distinguish themselves from more generalist online retailers.

They work harder to improve the online shopping experience and add in extra levels of service to the customer experience. This builds traffic and loyal customers.

So, when you work with these types of pure players, your market research for example can give you an advantage with them. Your level of product information and ability to produce entertaining of educational advertising or blog-type copy can be a big help.

These types of online retailers want to build their presence against bigger and more established retailers. So, they are open to any ways you can work with them to deliver this. 

Dropshipping and Print on Demand

As we cover in our guide to the e-Commerce planning process, this is a more involved way of selling online.

You find suppliers who are willing to “sell” products to you at discounted or wholesale prices.

The largest number of dropshipping suppliers are in China, and you can look for them on alibaba.com. However, you can find dropshipping suppliers in many other markets too. 

You create an online store website to sell these products to online shoppers at a higher price. When they order from you, you then forward the order on to your dropshipping supplier.

The supplier then makes or prints the product. They then send that product to your customer. You never actually see the product. 

Australian invention Facebook Post

Your profit comes from the balance between the supplier price and the price the end shopper pays. This profit only needs to cover the cost of the website and any advertising and media spend to drive the sale. Plus, it needs to cover any refunds.

The appeal of the dropshippng / POD model is that you use the dropshipper to manage stocks and delivery. Products are sold “to order”. So, you don’t pay for any items until you order them. This means you don’t have to tie up money in storage costs.

Control over the selling experience

And, unlike all the previous channels, you have more control over the front-end of the selling experience.

You set up your own store front and sell to the consumer. You then piggy back on the services of the drop shipping supplier to handle the delivery of the order.

This is a halfway house model between working with an online retailer and running your own full direct to consumer store.

You become the online retailer, but you outsource the back-end functions to create the products and deliver them to a third party.

This gives you more control over the selling experience since you create the advertising and media plan, you set up the online store and you manage the payments and the interaction with the individual shopper.

Of course, with this extra level of control, also comes an additional level of complexity. While you may not have to physically produce or ship the goods, you are responsible if anything goes wrong.

It’s important to review who your suppliers are, and to make sure they have good quality systems and customer service processes in place.

 

Three-brains online shop screenshot

On sites where you can find dropshipping suppliers like aliexpress. com for example, you should always look at reviews and comments about the suppliers you want to use.

When you plan to operate this way, you need to map out all stages of the order to delivery process, as if you were setting up the whole online store yourself. You then need to identify at which stage the order passes to the supplier to complete. It’s important to plan for any issues or queries that might come up.

While this added complexity is less than running a full D2C store, it can still be challenging when you have to work with third parties, You want to identity partners who are reliable and have a proven track record of delivery.

Dropshipping pros and cons

But obviously on the upside, you have more flexibility to adjust pricing and manage costs than you would with a marketplace, bricks and clicks retailer or pure player. You have the most control over the whole online shopping experience, and take ownership of the payment.

So, from a commercial point of view, it’s an attractive model as long as you can manage the difference in costs between what the online shopper pays and what you pay the supplier. And obviously you need to allow for operating costs like the store set-up and maintenance, advertising and media costs and the costs of dealing with any customer complaints. 

You also need to factor in that you have no control over shipping times and tracking. Those come down to the supplier.

So, as we cover in our article on Print on Demand shipping times, for example, this can have an impact on how much the online shopper has to pay, and how long they have to wait for deliveries.

Key skills to support your online retailer strategy and plan

In this guide, we’ve covered the different types of online retailers you should consider as part of your online retailer strategy. But you also need to consider how you will work with them. There are a number of skills you need to build to have a successful selling relationship with online retailers. 

Digital performance management

E-Commerce stores are “live” sites, where information updates on a regular basis.

You need to be able to check that all your products appear correctly, and that there are no mistakes. 

So for example, is the product / range in stock and available to buy? Where does it sit on the digital shelf compared to competitors? Are your competitors running promotions, and if so, what is the impact? 

If you have a small range, and a small number of online retailers you can check these sorts of areas manually.

Marketing technology dashboard example on a laptop

But increasingly, these sorts of online store checks are being automated by companies like Edge Ascential.

For a fee, they will set you up with an online tool, that automatically scrapes online retailers sites and answers these types of questions.

You can then identify any issues and act to fix them quickly.

Digital marketing

All of the skills that we cover in our digital marketing guides play a role in helping to drive your performance in e-Commerce. 

So, for example, understanding how digital media channels like search, social and display helps you drive shoppers to online retailers and product pages. 

Understanding how websites work, helps you optimise and make recommendations about product pages and site navigation.

digital marketing

It helps you make sure all relevant marketing technology systems are in place to manage the different processes needed to sell online.

When you understand how data and insights work online, you can build better insights and make more targeted offers to online shoppers.

Combining all these types of skills for e-Commerce ultimately helps you improve the overall Customer Experience. And that means, more online sales.

Account management and commercial negotiation

When you work with online retailers, you also need skills to help you build strong working relationships with them. You need to be able to negotiate agreements that let you both grow profitably. 

It’s important to understand their business objectives. It’s important to understand what they need to drive their own customer experience.

If you don’t sell direct, they will have more detail about online shoppers than you. So, it’s important you try to bring something additional and valuable to the table. 

 

Handshake to symbolise agency relationship

You need to be able to create strong business plans. It’s important to be clear on what you want the online retailer to do, and what’s in it for them. And importantly, you want to make sure that both parties feel they are getting their fair share of all sales, investments and profits.

Business Systems – Finance and Supply chain

While it’s clearly possible to sell online without knowledge of the finances or supply chain set-up of the online retailer, it can be a real advantage to have this expertise. . 

As we cover in our guide to the functions of e-commerce, after marketing, these are the two key other functional skills to be strong in e-Commerce. 

When you are clear on the sales, cost and profit breakdown for example, this puts you in a better negotiating position with the online retailers.

 

D2C coins

You can build your online retailer strategy with a better commercial understanding. You can make sure you price your products at the optimum level to drive sales. And, you can manage your costs to improve your profitability.

When you understand how products move through the supply chain, you can look for opportunities to improve the customer experience. Look at adding better services like order tracking and faster deliveries, for example. Or you can identify inefficient handling or delivery practices, and eliminate these to lower costs.

Creativity and perseverance

The final two skills you need to drive your online retailer strategy are more about how you work. e-Commerce is a fast moving channel with potentially lots of complexity.

You need to have solid marketing skills, but also be able to pull in skills from creative thinking and from innovation to come up with new ideas.

These are important skills to keep winning over online shoppers, and therefore winning over online retailers. 

The nature of e-Commerce is that it’s a lot of trial and error.

Post it on wall with light bulb illustration to highlight creative problem solving

You need to be unafraid to test new ideas, and be prepared to follow up on the ones which work. And throw away the ones which don’t.

It takes a lot of resilience and perseverance to succeed with your online retailer strategy. But if it was easy, everyone would do it.

And what would be the fun in that?

Three-brains and e-Commerce

We have worked on many e-Commerce projects and have good experience across the e-commerce planning process. This includes working with online retailers and building D2C stores and operations. We know how to connect these expertise areas back into driving your brand marketing and growing your sales. 

If you want to know more about how we can support your e-Commerce to grow your business through our coaching and consulting services, click the button below to send us a message.

We can coach you to reach the top of your competitive game.

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