Online selling has seen phenomenal business growth, particularly in the past couple of years, hastened primarily due to the worldwide covid pandemic. For the most part, the growth has been largely vis
Online selling has seen phenomenal business growth, particularly in the past couple of years, hastened primarily due to the worldwide covid pandemic. For the most part, the growth has been largely visible due to marketplaces like Amazon, Walmart, Flipkart (India) and even eBay (online auction portal) to name a few. Additionally, there has also been awareness among sellers to look for sales channels beyond Amazon. (For this discussion, I will use Amazon to label most marketplaces, such as Walmart, Flipkart or eBay). Those inquiries and demands have also grown significantly, during a covid pandemic. Dominating those discussions have been eCommerce platforms like Shopify, Magento, WooCommerce, BigCommerce and Salesforce Commerce Cloud, to name a few.
The underlying reasons for the increase in inquiry, and subsequent demand, could be varied. Be it expanding existing customer base, improving margins, enhancing customer experience, branding, or even the most obvious, mitigating the risk of having all eggs in one basket (or channel).
In this discussion, we will discuss and compare existing marketplaces, like Amazon, with established eCommerce platforms like Shopify (For this discussion, we will use Shopify to label most eCommerce platforms, including Magento, WooCommerce, BigCommerce and Salesforce commerce cloud), and also how to go about it. We will compare individual eCommerce platforms for a later discussion/blog).
Amazon and Shopify, a brief comparison
Amazon (and similar marketplaces)
More notable observations, for a seller
· Amazon has a single-minded focus on sales and higher revenues. With Amazon, you are investing in growing your ongoing sales. Immediate gratification which is hard to ignore; but comes with its consequences
· Oftentimes, there is not a significant opportunity to differentiate yourself from the competitors, apart from the price of course. This till the relationship with the end customer is established as a preferred vendor, which often is not guaranteed. Price oftentimes end up being the driving factor.
· Amazon would typically charge 15% for its service charges, or sometimes even higher, based on products and offerings. Not to mention Amazon Ads, all of which add up to the overall cost.
““With Amazon, you are investing in growing your ongoing sales. Immediate gratification which is hard to ignore; but comes with its consequences””
Shopify (and similar platforms)
Ecommerce platforms, where you can build your own portal and services.
More flexibility and independence to build a unique customer experience and brand value, using various tools, to highlight your offerings.
Most importantly, with Shopify there is a greater focus on acquiring customers and loyalty, resulting in higher margins; rather than short term sales and immediate gratification.
More notable observations for a seller
Takes time, effort and cost, to build the experience. The investment includes planning, development, acquiring people with certain skills-set and other assets. Typically, limited immediate gratification, similar to an Amazon (or other) marketplace.
““With Shopify there is a greater focus on acquiring customers and loyalty, resulting in higher margins; rather than immediate gratification.””
Why the need for eCommerce platforms, when you already have a marketplace
For a seller, rewards from both (marketplace and eCommerce platforms) are quite different and hence needs to be valued differently. The key is being aware of the differences.
While interacting with sellers, I have often heard this phrase, "With Amazon, my sales have increased significantly, but there has not been a comparable uptick in my bottom line or profits"
With marketplaces such as Amazon, there is a notable difference between the top line and bottom line, which as a seller you need to be aware of.
In single-minded pursuit of sales, bottom life profits often get missed out. Sometimes in the hope that eventually things will level out, but oftentimes consistent growth overtime is not guaranteed, because, at Amazon, you are largely competing with your competitors on price. Kindly note, this doesn’t mean that all sellers on Amazon are at loss or not profiting at all, but a comparative understanding of the bottom-line profits is critical if you plan to stay and think long term.
I always tell my customers, that Shopify (other ecommerce platforms included) is money spent to acquire customers, while with Amazon, it is money being spent to acquire immediate sales, of course, the choice is eventually yours to make. To summarize, you need to have a different mindset when working on Amazon and Shopify, they are different ecosystems in themselves. This needs to be sorted out before you decide to march in, else you will endure confusion followed by frustration.
Reluctance to move into eCommerce platforms
Though there has been greater awareness and inquiry on e-commerce platforms, however, our data also indicates that there has often been a reluctance to march forward wholeheartedly, on implementing eCommerce solutions. This is notably, for me, with Small and Medium Enterprises (SM&E’s) in emerging countries such as India. The reasons are often varied, but I will highlight some of the key ones, encountered in my discussions with sellers; for those who already sell via amazon, and want to sell online using eCommerce platform. Highlighting the top three
1. Initial CAPEX Investment- An initial investment is required to plan, assemble and implement the solutions, requiring effort, people and investment.
2. Lack of Understanding- Within this, I will highlight the top 3 based on my discussion- technology, digital marketing and process (ways of working). This, I believe, is often the one that results in the “NO-GO” decisions.
3. People- Given the nature of the platform, identifying and onboarding people with the right skills-set is obviously critical.
While I do believe the initial resistance has an argument, I know, based on prior implementations that, there is a way to successfully address the above, only if you know how to go about it.
Sellers agree on the benefits of platform, but not sure how to get there
Due to prior experience implementing eCommerce platform solutions, like Shopify, Salesforce cloud, WooCommerce or Magento, I don’t doubt the value of adding eCommerce platforms into the mix, not just in long term, but also in the near term. However, I would like to caution on getting your understanding and process right during eCommerce platform implementation. Though there is a lot to write, I will highlight 3 areas.
• Strategy: Obviously is critical while implementing eCommerce solutions, I see it as a compass to navigate yourself, during high seas, as you define the NorthStar for your business.
• Setting realistic expectations– Outlining expectations, not just at a high level from the eCommerce initiative, but also around people, processes and technologies.
• Implementation– If you have capable people, aligned on the strategy and onboard the right mix, on the technology front, with the prior 2 pointers, the implementations would not just be worthwhile, but open new doors.
Should I have all my eggs in one basket?
Notable aspects of Shopify
When we discuss eCommerce platforms, there is a lot to explore, in terms of options, be it customer experience, branding, 3rd party integrations, as compared to selling on Amazon. I will attempt to list a few
Comparative benefits of Shopify
Approach, recommendation and next steps
I am often inquired, particularly by existing sellers on amazon, (or Flipkart, eBay etc), if it should be either Amazon (or its likes) or Shopify (Magento, WooCommerce, Salesforce cloud or others depending on budgets). My simple answer is BOTH, at least in the initial phases, emphasising again that Amazon and Shopify are not the same. Though both help you sell products and services online, their similarity ends just there, anything otherwise would be misleading.
Both marketplaces and eCommerce platforms have their own importance in the eCommerce domain. However, as a seller, you need to reflect on your goals, existing situation and where you would like to be, maybe 1-3 years down the line. In my experience, often in urgent, and short-term pursuits, the important long-term goals get blurred.
Our general recommendations, for SME’s, exploring eCommerce platforms, is as follows
Next Steps
All these points are kept in mind by the web development company in pune.
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