How to choose the e-commerce platform optimal for growing your brand

E-commerce today consists of hundreds and thousands of trading platforms scattered around the world. Choosing the right trading platform based on product type and the target audiences will enable us to channel our products to the optimal trading platform.

Want to know how? The following are 3 iron rules for identifying the right trading platform for global growth:

Choosing a platform

Using international platforms for the sale of products online that serve millions of users every day – we are obviously talking of eBay and Amazon. The benefits are great – no need to deal with marketing (Amazon, for example, has over 400 million active customer accounts, eBay has about half of that – 200 million active buyer accounts), no need to set up an independent sales platform (both Amazon and eBay allow you to set up a sales platform, an online store so to speak, at low cost – paying only a symbolic monthly payment for hosting the store and commissions on every sale).

The main downside – these are bustling marketplaces, where to be successful, you will have to place an emphasis on strong branding, quality differentiation, and mastery of each platform’s relatively unknown promotion mechanisms.

A few words about Shopify – an independent trading platform

Another trading platform that has become widely known in recent years is Shopify. The following is some general information about this e-commerce platform:

• Shopify’s market value is 175 billion dollars, whereas Amazon’s market value is 1.65 trillion (Amazon is worth almost 10 times as much), so power gaps between the platforms are still substantial.
• Shopify has ended 2020 with a sales volume on the platform (GMV) of more than 120 billion dollars (double that of 2019), so in effect its GMV is almost 50% that of Amazon’s marketplace.

• This platform is fundamentally different from Amazon or eBay in that it allows a brand to build its own freestanding trading website. Using Shopify’s website builder, the process is simple, easy and no programming knowledge is needed to achieve a well-designed independent trading website.

The advantages of a freestanding trading website on the Shopify platform are enormous; Here we are not subject to the rules and commissions dictated by external trading websites such as Amazon or eBay, and most notably, we can sell our products on our freestanding website, which cannot be closed or adversely affected by any rule imposed by some trading platform.

A freestanding website on the Shopify platform gives us an opportunity to become a “mall for other brands”. On Amazon or eBay, a customer who wishes to buy our product will be exposed to hundreds and thousands of similar products too, and sometimes at prices more attractive than ours. Conversely, when we sell products on our website, which is devotes solely to our own brand, as in Shopify, we can sell these products at higher prices, because the customer entering our website is exposed only to our products and is free of the distractions posed by other competitors.

Additionally, a freestanding website makes it easier to “cross sell” and “upsell” – what are these terms, you ask? We will not only explain, but also illustrate how we use these functions at TCM to boost sales volume from purchases of customers buying on our Shopify websites:

“Cross Sell” – is intended to encourage customers to purchase items related to the product or products that supplement it. As it relates to our business, on our own website it would be exceedingly easy to suggest additional and related products to those that the customer has placed in the shopping cart. Let’s say a customer is buying a luxury fountain pen from us, we will recommend adding ink for that pen in more colors, or a luxury notebook that would work well with the pen. Furthermore, we can offer these supplementary products at a certain discount to increase our chances of making the sale. We quite often see customers looking for one product that thanks to effective Cross Sell end up purchasing three and even four additional products.

“Upsell” – is intended to encourage customers to buy a luxury item that is more compatible with their preferences than the item they had originally selected. For our purposes, if a customer wishes to buy a quality fountain pen from us, we will offer him a fountain pen that is very similar to what he means to buy, but of even higher quality and more high-end. In this way we encourage the customer to upgrade from the product he intended to buy to a similar but better product.

International shipping

Before we dive into the infinite world of international shipping, we should become familiar with some general terms that every trader worldwide needs to know in order to conduct an effective dialogue with suppliers and courier companies from all around the world.

 

•       EXW price (EX-Works) – is the cost of manufacturing the goods and making goods available for pickup by the courier company from factory’s location
•       FOB price (Free On Board) – is the cost of manufacturing the goods + transporting goods to the port / airport from which they will be shipped to Amazon USA
•       Proforma invoice – an initial version of the invoice specifying all information relevant to the order, that suppliers send to buyers prior to shipping goods as an agreement and a demand for payment
•       Commercial invoice – a tax invoice received after payment. Commercial invoices are to be kept and submitted to the accountant as documentation of business expenses
•       Forward agent – a shipping agent
•       Packing list – a document that accompanies shipments and details the contents of the shipment (Quantity, size, weight)

 

What are the main parameters to consider when placing an inventory order?

•       If you are ordering a product for the first time, be sure to order the minimum production quantity allowed by the supplier, as you will want to use it to test and understand if this product is in fact compatible with your customers’ preferences and expectations; a minimum quantity order is a great way to test the product at relatively low risk.
•       You should know that production lead-times could take a while (sometimes even up to 60 days for some products), and therefore this should be considered. If you want to order a product that is specifically suitable for Halloween, for example, take into account the production lead-time so you can make sure that the product arrives on time.
•       In addition to the production lead-time, delivery times must also be taken into account. Post covid-19, shipping prices have risen, and we are experiencing longer delivery times. It is preferable and highly recommended that you check with the courier company how long it will take for the goods to reach their destination and what shipping costs will apply.

The following is a formula to help you calculate how many units you should order each time and when to place the order:

For example:

(Average daily sales = 10 units) + 100 units for marketing

(Production lead-time = 10 days) + (delivery time = 7 days) = a total of 17 days

(10 pcs/day X 17 days) + 100 units for marketing = 270 units (minimum)

 

Congrats! The product of your choice has arrived at Amazon! Now let’s learn how using a sponsored campaign we can expose your product to Amazon’s infinite marketplace

When a product first arrives at Amazon in most cases it will be very difficult for customers to find it, as it is a new product, not yet reviewed by customers and Amazon does not know the product well enough to display it on the first pages of search results.

What cand be done so our new products will be exposed to customers on Amazon’s first search pages?

First, it is always advisable to increase the number of reviews, in order to boost product’s rating (a good product rating on Amazon is higher than 4.3 stars) – one way this can be achieved is using tools that Amazon makes available such as Amazon Vine and Amazon early reviewer program. The idea is to get at least 5-10 good product reviews.

Once we have accumulated enough product reviews, we highly recommend starting a sponsored campaign within Amazon to push our product to the first pages of the search results and gain product exposure.

We will learn which search words are relevant to us and later use them for the purpose of optimization thereby enabling us to achieve more sales at lower costs.

We will get to know keywords that boost conversion as well as any search words that Amazon advertises the product in the results of yet are not actually relevant to our product, so we will delete such search words (this action will help teach the Amazon system about the product and encourage its display in more relevant places).

 

What are the elements of a campaign?

A daily budget – You determine your daily budget when setting up the campaign.

Click Cost – The amount you pay each time a customer clicks on your ad and enters your sales page; Pay Per Click (PPC) – you determine the bid amount per click.

When starting out with your first campaign, our advice is to go for what’s called an automatic campaign. This type of campaign makes it possible for Amazon, rather than you, to do the work needed to conclude what keywords your customers use to get to your products.

Once this campaign has run for a week or two, the keywords successful in prompting sales of your products can be taken and placed in campaigns focused more accurately on these keywords.

For example, if you’re selling a set of drinking glasses made of glass, and based on the results of an automatic campaign have concluded that customers buying this product of yours have reached it using the following search words:

–  drinking glass

–  glass

–  drinking glass set

You can now take these key words and place them in a campaign in which you set a budget for specific key words. This will boost your product’s visibility pushing it, as a paid listing, into the first search result pages to come up whenever a customer enters the following search words:

–  drinking glass

–      glass

–      drinking glass set

 

What else can improve your listing and increase sales on Amazon?

A quality listing page – keep in mind that unlike at a mall or a market, on Amazon the customer has no physical contact with the product until it arrives at his/her home. Therefore, it is imperative to make sure your listing page does the job; it should display a clear title that aptly describes the product, images that illustrate and show both the product itself and its uses, a product description complete with instructions how the product is to be used, and how, thanks to its advantages, it can benefit those who own it and make their lives better.

 

About the Authors: Gabi and Shani Bar are founders and Co-CEOs of TCM Digital and manage international brands generating tens of millions of dollars in annual sales.