How to Build a Sales Channel Strategy For Your Online Store
New entrepreneurs often put together a simple online store and a small handful of social media channels and then just call it a day. But if you’re relying on just one sales channel to grow your business, you’re actually leaving a lot of money on the table.
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Instead, the key is to diversify. To grow your audience and boost your sales, you’ll need to invest time and energy to build out sales channels that compliment your online store. The good news is that most of these channels are super simple to manage and can help you drive traffic to your products without much additional effort.
That said not all sales channels are created equal, especially when it comes to your unique business. In this blog, we’ll be talking about what a sales channel is and why it’s important to have more than one set up to grow your online sales. Then we’ll look at 11 sales channel options, that could be a great match for your business.
I’m also going to be sharing some of the pros and cons of each channel to make sure that you’re choosing options that are the right fit for you. By the end of this blog, you’re going to understand how to diversify the way you sell online so that you can grow your business in a profitable and sustainable way.
Let’s get into it. Having several sales channels in your business is what’s known in the industry as a multi-channel sales strategy, which is really just a fancy way of saying that you don’t have all your eggs in one basket. So instead of selling only through a brick and mortar shop.
Only through an e-commerce store, your products are being sold in other places as well. And there are several types of these online marketplaces where you can sell your products to people who otherwise might not find you using a multi-channel strategy has a lot of advantages.
First of all, these platforms are usually really easy to set up because their goal is to streamline the entire shopping experience for both buyers. And sellers. So you won’t need any fancy skills or technical know-how to get started on most of these sites.
Not only that, but sales channels usually come with an existing customer base, which is awesome because it lets you connect to people who would not otherwise have found you. And you’ll always get access to the channels built in marketing tools and search, which you can leverage to increase your reach based on your keywords and positioning.
Lastly by selling on different platforms, you’re also giving your existing customers multiple ways to interact with your company, which can reinforce their brand loyalty to you, and sometimes even create more convenience for your buyers. For example, if someone is used to placing orders on Amazon every few weeks, it might actually be a lot easier for them to purchase your product through that site, rather than needing to make a whole separate purchase on your online store.
Of course, there are always going to be trade offs because individual sales channels are going to have their own rules and their own guidelines for how you can market your products, which can really limit your creativity and possibly your success on the platform. In certain marketplaces, you could face restrictions like with the number of product photos or what you can put in your listing descriptions, things that you wouldn’t encounter on your own online store.
When you sell on an external platform, it’s also going to be more difficult to create a branded experience for your customers because your store’s logo and fonts and colors are all replaced by those of the marketplace you’re using, which can actually make it harder to stand out and be noticed. And it goes without saying that almost all sales channels are going to charge fees, whether that’s to list your product initially, or as a commission for every successful sale you make.
In most cases, this is just the price you pay for access to the sites customers, because they know and trust the platform and its products, but even with these restrictions and downsides, featuring your products on these kinds of websites is a really good additional strategy for most online business. Notice that I said additional that’s because I think all product based businesses should at least start with their own online store in order to maintain total creative control over your brand, your policies and your marketing.
With this approach, you’re going to get the best of both worlds because you’ll have your own branded store plus access to a broader audience through carefully selected sales channels. So while I never recommend relying exclusively on external, online marketplaces, they can be a really great addition to your overall e-commerce strategy.
Now with that in mind, let’s talk a bit about how to choose an online sales channel based on your unique business model while I can’t tell you exactly which one will be right for you, I can tell you what you should be thinking about as you make your decision. And if you haven’t already written up a business plan for your store now is a great time to do so to choose a sales channel, you’re going to need to have a solid understanding of your audience and your systems and your goals. So if you don’t have a business plan yet, be sure to watch our blog about writing one, using the link below.
Choosing the right sales channel goes beyond the pros and cons of every platform in and of itself. It’s much more important to make sure that the channel you choose is aligned with your business as a whole. So here are some factors to consider. Business model. Make sure that your sales channel is compatible with your business model and your manufacturing.
For example, if your business relies primarily on drop shipping, you need to make sure that your chosen sales channel can connect to the system you’re using to drop ship your products. The same is true if you manufacture your products yourself, new sales channels can bring increased demand and require a lot more inventory management. So you need to think carefully about whether the option you choose is a good fit for your manufacturing process and your delivery systems.
Do some research into how you’ll get paid out by your chosen sales channel. Are you going to need to set up a new payment processing service or can you just be paid into your existing bank account? Also think about how sales work on this platform. On eBay for example, sellers, can’t set a fixed price and won’t be paid until the auction closes.
Whereas on other platforms, you’re going to need to pay a commission fee for every sale. So in both cases, it’s important to consider your profit margins and your cashflow to make sure that your business can handle this kind of payment structure. Based on what you already know about your ideal customer, what sales channel do you think they might already use and love?
For example, if you sell beautiful custom jewelry, your products are probably a perfect fit for a platform like Etsy, which is full of people, looking for unique and handmade items. And since you’ll want to leverage the audience of your chosen sales channel, it’s really important to make sure that the platforms customers are a good fit for the products your selling.
And the same is actually true for your existing customers. Can you partner with a site that creates more ease and convenience for the people who already buy from you? If so, that channel could be a great addition. Such as in the Amazon example that I gave earlier, not every sales channel is a good fit for everyone. For example, if you sell luxury products, you may not want to use a marketplace that specializes in used or discount items. And similarly, if you sell quirky or unique gifts, you probably want to avoid sales channels that rely on mass produced products.
Make sure that the platform you choose is a match for the products you sell, both in terms of merchandise and positioning. Okay. So now that we’ve covered some of the major factors to consider, when you’re choosing a sales channel, let’s take a look at the options that you have when it comes to selling your products online. Number one, general marketplace. A General marketplace is a site that sells a wide variety of products that appeal to lots of different customers.
These sites have a huge audience of people who already use and love the site, which can be a big advantage for entrepreneurs who are just starting out. But on the other hand, these platforms come with competition from other sellers who are probably offering the same or really similar products to yours. This is also not where buyers are going to come to find anything unique or vintage or handmade.
This kind of platform works best for selling like mass appeal products, things like electronics and books, household items, and other gadgets. And of course, as with many sales channels, when you sell on a general marketplace, that you’re going to be limited in terms of your own branding to the customer, your product is going to totally blend in with the platform’s design. So you need to keep that in mind, if strong branding is an important part of your business.
Amazon is of course the most popular and well-known general marketplace, but other similar websites in this category would be Alibaba. wish.com, sears.com or Walmart. Number two auction market. These sites specialize in one of a kind items. So they’re really perfect for those selling unique or vintage or collector’s pieces. Popular categories include limited edition fashion or furniture, rugs, art and things like action figures with engaged buyers who check back pretty often looking for a particular piece.
Now, as I mentioned before, one downside to the auction model is that you’re going to have pretty limited control over your pricing. You can’t set the price yourself. And if you’re bidding happens to be low, you might not even receive the full value for the item that you’re selling. But that being said, if you have rare or high quality products that are in demand from buyers, the auction format could actually work to your advantage by pushing your prices even higher than they otherwise.
Either way. You’re also going to have to wait a certain amount of time after your sale goes through in order to be paid for your product, which can lead to cashflow issues for some types of businesses. Now, the most popular option in this category is of course, eBay, but there are others such as Ebid and auction, zip, which you could explore if an auction marketplace is the right sales channel for your store.
Number three, social media. If you already have a large following on a particular social media channel, then setting up e-commerce through that platform is a pretty smart way to leverage your existing audience sites like Facebook and Instagram and Pinterest all offer you this kind of shopping functionality. And we’ll let you create an online storefront to sell directly through that platform. They’re also always expanding the kinds of tools they offer in ways that will help you sell either.
For example, Instagram offers you the ability to tag products in your posts and in your stories, and now has created an entire shop tab where they’ll have a tailored experience for shoppers based on their preferences. This means that your products are not only shown in a targeted way to your existing fans, but they’re also introduced to new people who have a pretty high chance of being interested in the products that. Some social media sites also have larger platforms where people can sell products themselves, such as on something like Facebook marketplace.
And while this platform is a little bit more like a classified listing site for people to sell things locally, it can also be a great tool for business owners. If you use it strategically, because there are lots of engaged buyers using the platform every single day, it’s a free and easy way to feature your products in front of brand new customers. Number four, handmade and crafts marketplace. Etsy has known online as the place to go for custom handmade products, so it’s going to give you a really good audience base of engaged people who already use and really trust their platform.
Users tend to be repeat customers and they’ll come back to Etsy again and again, to find things like gifts and vintage pieces, or really beautiful bespoke items. And while you will face competition on their platform from lots of similar products in your niche, they do have a really great search function, which you can use to reach new buyers. If you’re optimizing your listings.
Etsy, we’ll charge you for every product that you list. And we’ll also take a percentage of your sale price as a commission, but they make selling pretty easy by accepting lots of common payment methods, integrating with shipping solutions and they offer ways for your customers to personalize their products. All of which makes your job a whole lot easier. Now there aren’t very many other sites competing directly with Etsy in this category, but Amazon handmade and art fire could be worth exploring. If you’re looking for a handmade marketplace to expand your business.
Number five on demand production marketplace. These types of marketplaces are particularly cool for artists and designers who want to sell their work in ways that might otherwise be kind of cost-prohibitive to create for beginning entrepreneurs. For example, let’s say that you wanted to put your design on a mug. Normally you would have to order a lot of mugs upfront and then pay for all this inventory that you might not even sell. But selling your work through an on-demand platform means that you could print any number of designs on a mug or a t-shirt or anything else based on your individual sales. So you don’t have to incur any upfront costs.
The platform handles all your payments, all your production, and of course your order fulfillment and all of this happens on your behalf, which means you can sell your designs on a really wide variety of products, everything from mugs to t-shirts to stickers, but you never have to worry about your inventory or storing your inventory. In fact, you may not even have to pay to set up your account in the first place because most of these sites will just pay you for royalties on every successful sale.
Usually it’s free to set up your store and upload all your designs, and then you’ll get a commission on any sales that you make. Now this commission will probably be lower than the profit that you could earn by creating these products all by yourself. But it’s also a lot less work. And as we’ve mentioned, it will allow you to hugely expand the number of products types that you can offer without any additional overhead. Some really great options in this category are Zazzle, society six, red bubble and cafe press, as well as sites like Lulu and blurb for creating books or magazines.
Number six unique items marketplace. Platforms in this category are usually lesser known than a marketplace like Amazon or eBay, but they’re pretty great for shoppers looking for quirky options that they’re not going to find anywhere else. Some of the most popular categories on marketplaces, like this include interesting home goods or unique fashion and specific movie or TV memorabilia, but the sky is the limit in terms of the unique products that you could sell on these kinds of things.
Usually these sites are free to set up, but we’ll take a percentage of your sale price as a commission, instead of something like a product listing fee. That way it’s fairly low risk because you only have to pay if you make a successful sale. So if you’re interested in selling on a marketplace designed to feature a specifically unique items, you’re going to want to check out store envy or Bonanza whose slogan is ‘everything, but the ordinary.’ Number seven niche curated marketplace.
Unlike most of the other options on this list, a niche curated marketplace is a bit of a trickier sales channel to set up because they’re not just open to everyone. These sites are curated so they’re a lot pickier about who can sell on their platform. And you’ll usually have to submit an application to even be considered. You might also have to pay a joining fee to sell on the platform, or you’ll just be charged commissions for any of your successful.
But despite the slightly more complicated setup process, the advantage of these sites is that they’ve already built a lot of trust with their ideal customers, because these platforms are curated to a pretty high standard. They’re usually going to attract repeat customers who are looking for a variety of thoughtful and interesting things in one convenient place.
So as a seller, you’re going to reap the rewards of this established brand and then get some really great marketing and additional sales as a result. A few options in this category are uncommon goods for cool gifts, ASOS marketplace for fashion boutiques, and not on the high street for sellers in the UK. Number eight subscription boxes. Speaking of niches, this next category of online marketplace is only going to be relevant for people who sell subscription boxes.
But if that’s you then joining a marketplace that showcases a variety of interesting subscription boxes is a really cool way to expand your reach and grow your substance. You’re going to be listed on the site alongside many other boxes in your category. So it’s really important to distinguish yourself through the quality of your products, your photos, and your descriptions, so that you can stand out and be featured on the sites, curated lists and in their search results.
The best option in this category is crate joy, which lets you list your subscription box in their marketplace for free to reach an audience with over 4 million views per month, which is really good. You are going to pay a high transaction fee per sale in addition to your payment processor fees.
But if you’re just starting out and you need to reach, engage shoppers who are looking for a subscription box, this is a really great exchange for the value you’re getting in terms of brand exposure. Number nine classified listings website. Now, even though classified listings websites are yes, primarily designed for people to sell used things that they no longer want.
They can actually be used as a sales channel for savvy entrepreneurs, trying to find new customers just as long as your products are the right fit for this kind of plan. Selling on a classified site like Craigslist or Kijiji is free because you don’t have to pay any fees or commissions to use the platform.
And the really good news is that lots of people turn to sites like these to find good deals on things like furniture or electronics. So if you sell in some of their more popular categories, it’s actually really easy to get your products in front of a lot of new people.
That said selling on this kind of site does have its downsides. Firstly, since these platforms are primarily for pre-owned items, buyers are usually expecting to pay lower prices than what you might typically charge. Also, you’re going to be responsible for all of your payment processing, all of your shipping because these sites are only listings.
They don’t handle any other logistics. And lastly, of course, selling on these kinds of platforms can be risky because there are very few policies in place to protect either buyers or sellers from getting scammed. You’re going to need to be careful and set up your own systems to make sure that selling is a stress free experience for you on these kinds of platforms.
Another really great option to get your products in front of new customers is to take advantage of comparison, shopping search engines, such as Google shopping. This feature lets customers search by keyword across lots of different online stores all at the same time. And this helps them find the exact product that they’re looking for.
These tools are obviously incredibly useful for buyers because they can easily compare products and discover new brands all in one handy spot. But they’re also really great for sellers hoping to be discovered for the first time. One obvious downside to these marketplaces is that your products are going to be directly competing with other options that are very similar or in some cases actually kind of identical to yours and customers are often looking for the best price rather than the best product when they do this side-by-side comparison.
So keep that in mind, especially if you’re selling luxury products or if your brand depends on really specific positioning and branding to drive. That being said, it’s now free for sellers in many countries to list their products on Google shopping, so there’s actually pretty little risk to trying it out for yourself. If you’re not sure how to get started, check out our blog post all about getting your products listed for free on the Google shopping tab, by integrating the Google channel with your Shopify store.
Number 11 daily deals sites. Last, but not least another option for diversifying your sales channels is to share your products or services on a deal site, such as Groupon. When you list your product on this kind of website, your deal is then promoted through their site and their email list, especially to local buyers looking for deals in their area.
This can actually be really great marketing and exposure to help you build up your brand awareness and grow your reach with a new audience. The downside is that you will have to offer a pretty big discount in order to be featured on these sites. Usually upwards of 50% off your regular price, that is a hefty cost to pay, especially since you’ll also be charged a commission for every sale you make through the.
So before you commit to joining a deal site, you need to make sure that your profit margins are going to be wide enough to account for all of these fees. And it’s also a good idea to think through whether your products are even a good fit for these kinds of sites. The best options are going to be things that encourage repeat shopping once a customer has already bought in.
So for example, things like massages or beauty products or vitamins supplements are good picks because people need to buy them repeatedly. Now. Even though it’s a great idea to diversify, remember you don’t have to be everywhere all at once.
My advice is to build out your sales channels slowly one at a time so that you can make sure they’re a good fit for your business model and margins. Before you continue to expand, you need to choose your channels carefully based on the factors that are most important to you, whether that’s your brand positioning, your profits or the potential reach you could have through any given platform, then track your results if you’re going to be paying fees to other platforms in exchange for reaching their customers, it needs to be worth it to your bottom line.
You need to monitor how many additional sales you receive and then fully evaluate whether the sales channel is even right for you. You need to make sure it’s a good investment in your business. And regardless of how many sales channels you choose to add, remember having an online store of your own as a home base for your business is essential for your success. And if you haven’t yet set up your shop, I think you should come check out Shopify.
We think that Shopify is the best option for entrepreneurs at all stages of growth. And we offer all the e-commerce and point of sale features that you’ll need to start, run or grow your base. Plus our platform integrates with lots of awesome sales channels. Like the ones I’ve mentioned today to help you boost your sales even further. And we offer a 14 day free trial so that you can experience Shopify for yourself and be sure that it’s the right choice for your business.
Before you commit click the link in our description box below to activate your free trial and get started on building your online store with Shopify today. Okay everyone. So let’s take a look at some of the comments. This one comes from a previous blog from my colleague, Michelle. It was a blog called how to start a business with almost no money and diaries from the heart said, loved the blogs. What’s your take on podcasts and book publishing now, because this blog was about how to start a business with very little money.
I’m going to answer it from that perspective, which is to say that I don’t really consider podcasts and book publishing to be really good income generating strategies, especially if you’re just starting out as an entrepreneur, you really need a large audience to be able to monetize those kinds of channels because they’re long-term marketing strategies rather than money-making machines. So if you’re starting out and you aren’t really sure where to put your time and energy, I would really focus on creating products and services that are right for your ideal customer. And wait on some of those longer term marketing machines, like a podcast for the long run.
Now, if you can create a business model, that’s going to run and work for you and generate income and you have time left over to devote to marketing, then yes, you can use podcasting or creating a book as one of those marketing streams just don’t depend on it to make you money. Okay. Thanks again for the great question. If you have a question, be sure to let us know down below and we’ll try to get to it in an upcoming episode. Not all sales channels are right for all businesses, but chances are, there is at least one option on this list that will help your business find new customers and scale over time, which of the sales channels that we listed today sounds like the right fit for your business. Let me know in the comments below, I would love to hear more about your business and your plan to expand it. And if you’re still new to e-commerce and want a full rundown on how to build your first online store.