The strategy of selling on multiple online stores like Flipkart, Snapdeal, Shopclues, Tradus, etc is known as Multi-Channel Sales. As mentioned in an earlier article, Multi-Channel Selling is a good strategy in order to maintain Business Continuity. However, there are a few things that one must keep in mind when thinking of selling on more than one B2C website. Mentioned below are a few such key concerns.
Here are 5 things that you need to keep in mind when doing Multi-Channel Sales:
Central Inventory: When you start selling on multiple channels, orders will come in from various places at the same time. You will need to be careful about splitting your inventory and putting just enough on each channel so that you don’t sell more than what you have in-stock. If you have a just-in-time or back-to-back inventory model (where you source products after getting the orders from marketplaces), then make sure that you are working with reliable and efficient suppliers who can provide you with the stock on time. If there are delays or cancellations, then the marketplaces levy penalties and your stores get a bad reputation.
Shipping: When you increase your visibility by going multi-channel, you will start getting orders from various parts of the country. This is specially because many of new eCommerce marketplace companies are marketing themselves in Tier-3 and Tier-4 cities like Pune or Agra. Most courier companies in India are incapable of servicing all the pincodes of the country. This means that you will need to maintain relationships with multiple shipping providers. This is also beneficial since pricing will vary from company to company for the same pincodes. For example, out of the 7,500 pincodes that FedEx covers, 1,500 are ODA (Out-of Delivery Area) and delivering to these places incurs extra charges by them.
Shipment Tracking: You will need to keep track of the shipments for various marketplaces since each come with their own packaging material and logistics provider. You might have to divide the packing list by the marketplaces so that the packages don’t get mixed up. Also make sure that the guys picking up your order from the respective shipping provider sign the manifest (a list of packages that are picked for courier) because if you don’t keep tabs, it will be very difficult to place a package when it goes missing. For this usually you would need to maintain a separate excel sheet with tracking numbers of all orders. In addition, or alternatively, you could file all the signed manifest sheets for future reference.
Profitability – Different channels have different fee structure and charges. Some marketplaces (e.g. Naaptol) charge the VAT on the final Selling Price (the price a consumer pays to buy the product) that they sell on rather than on the Transfer Price (the price at which the marketplace commits to buy an item from you) that you provide them. Sometimes this even leads to selling items at a loss. This seems counter intuitive but that’s how it plays in some cases. On the other hand eBay is highly price competitive but sells more, hence you might want to sell only those products there which don’t otherwise sell on other sites or the ones that you would like to sell fast and make a small but quick profit. And some other sites give you good profits even if you sell slow. The key is to strike a balance among these and sell some inventory on all types.
Branding: A big benefit of selling multi-channel is that you start building a big customer base. You could utilise this to your benefit when you ship your items. You could add a flyer or a business card inside the package. The next time the customer thinks of a similar product to which they ordered, then he might come directly to one of your stores and place an order. This could be slightly controversial though if it is against the terms of the marketplace, so read their terms before doing so.
As mentioned earlier, multi-channel sales are an important means to maintain business continuity. Despite the challenges involved, it is vital for you to grow your sales funnel by doing multi-channel sales.