The E-commerce Leader

[00:00:00] Jason: if you’re competing on any marketplace against marketplace sellers and their whole mindset is how do I use this marketplace only, and its tools only and you can actually bring other resources to bear
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[00:01:14] Michael: Many eCommerce operators have the dream of being multi-channel sellers. And there is a powerful logic in that, whether it’s business, defense ability, new potential revenue, new types of income streams, there’s a lot in its favor.
[00:01:27] However, there are some classic errors that Jason and I have seen when entrepreneurs launch in a new eCommerce sales channel. And today we’re gonna talk about five classic errors and what to do. Instead. So Jason, I know you’ve got a huge amount of experience now with coaching and consulting with people over years of changing, or adding, should we say eCommerce sales channels?
[00:01:48] What are your insights on this one to start with?
[00:01:51] Jason: I love the topic it’s, it, we changed our company name, to winning online, to, to Omni rocket, because omnichannel selling is really the frontier of eCommerce in many ways for all of us. Most of the clients that we work with, their, they’re thinking a process goes something like this, Hey, I’m doing well on Amazon.
[00:02:08] I better do well on another channel too, cuz I don’t wanna be shut off on Amazon, and. That’s like very common, mental mind mindset that we hear people express. And so Shopify is one of the channels, but there are certainly many others that are just coming into prominence and people find their way into selling effectively on them.
[00:02:28] You’ve got just in the Amazon ecosystem. All the other countries, which really are like launching a new channel, if you wanna launch in Amazon, Japan, or, on and on. And, but then, you’ve got Etsy and eBay, which is where we started. We started on eBay and we still sell on Etsy.
[00:02:43] It’s our secondary channel. Of course, Shopify to certain extent is a channel. If you wanted to call it the direct to consumer. Via your website channel, click funnels is really a unique tool. That’s almost a, you could consider it a sales channel if you wanted to for, how it works. You’ve got, second year seller apps in marketplaces, like real posh mark, Facebook marketplace Craigslist offer up.
[00:03:06] Of course you got Walmart in the mix. You’ve got local selling like local retail. You’ve got, popup shops that you can do. You’ve got farmer’s markets that you can do. You can warehouse sales, you can do affiliate channels. You can do B2B, whole selling, which is really, a a channel in itself.
[00:03:20] And on. For goodness sakes, there’s no shortage of sales channels in the eCommerce. Now it’s really quite amazing ISN. There
[00:03:27] Michael: is certainly no shortage of options. And I guess when people have a lot of options, there are two options. You have a as a, an information provider podcast, a coach, which is to a throw out a video a week, on YouTube.
[00:03:40] I’m going by what I see out there. That makes the latest channel sound incredibly sexy and you get fear of missing out. So TikTok have been all the rage for fear of missing out for e-commerce sellers this year. Or I think you can do what you know. Frank, Chris green has often mentioned on our, hot tag show, which is.
[00:03:55] More responsible, which is to help people navigate between the different options. I don’t think we need any more options in our lives. What we need is the ability to choose between them in my opinion. And so hopefully today’s show is part of that. And yeah, I think, the more options you have, the more mental work you’ve gotta do to make some choices.
[00:04:09] So let’s kick off with some areas. First. I I like to turn the knife, maybe that’s my marketing sort of pedigree. I was brought up to bring up. Seven mistakes you’re making with X, Y, and Z. So not so much fear of missing out. It’s just straight up fear. So let’s just start with fear and then let’s work towards some positive solutions.
[00:04:23] So the first thing is an era of not understanding the different dynamics and cultures of different sales channels. And to your point. Even different Amazon marketplaces can feel like a different thing, even though the backend and the mechanics are the same and it looks the same. But if you’re trying to sell on, I’ve worked with the odd person who’s only sold on Amazon, Italy or something.
[00:04:42] And they start to try and sell on amazon.com in the USA, the level of competition and the level of demand are so much greater on both sides of that equation. That it’s a completely different experience. The budget needed, the mentality needed. The skillset needed is very. Even though it’s just within the Amazon marketplace.
[00:04:59] So that’s the first thing that I see out there. Not
[00:05:01] Jason: understanding the difference between the cultures and dynamics. Yeah. I totally agree with that. They are very different animals, aren’t they, Etsy is our secondary sales channel and then Shopify’s our primary, but. The, just those two by themselves have interesting differences.
[00:05:15] Of course, if you, in your context, go from Amazon to something else, it, it can feel like a complete different operating system, cuz it is . The back end is a different operating system, and you have to learn it and, appreciate the fact that they’re gonna be a lot of nuances and differences in terms.
[00:05:30] How customers behave and customers expectations, but also how the company that’s managing it behaves, the backend rules and process, those nuances are the first things you start to bump into and you can be incredibly frustrating. And until you learn the rules of the road, On the new place.
[00:05:49] And, and then you start to get comfortable with it. Not dissimilar to when I was in England last month and had to drive on the wrong side of the road for a week. And I did hit a curb and it cost me $250 to get the rec the rim replaced or repaired. But, I learned after the first day I got better at it.
[00:06:08] And it’s similar, I think in terms of learning new marketplaces.
[00:06:13] Michael: Yeah, that’s a good analogy actually, cuz I recently drove in France, but I drove in Germany when I was, like about 19. So I just passed my test and I did a gap year, which makes me sound like a bratty middle air, middle class kid, I guess cuz that’s what I am.
[00:06:26] But I, so got used to it an early stage, but there was something very disorientating about something as physical, as left versus rights. Changes and there is something, it feels. Like that, doesn’t it, when you change culture in a marketplace’s surprisingly visceral experience of confusion and, oh my goodness.
[00:06:41] I’m used to pulling lever a and I didn’t even realize you used to living, pulling lever a cuz I’ve done it a hundred times and I’ve forgotten that I got used to that until it isn’t there anymore. Yeah. So if you are an Amazon base or marketplace seller, and you got your Shopify store sitting in the corner of the internet, you’re used to pulling the lever of Amazon ads, which don’t just get you awareness, but get you sales and suddenly.
[00:07:01] If you’re trying to do Google ads, you’re not gonna automatically just make sales on a site never I’ve ever heard of and has media branding maybe. And then you’re in a different world, right? Disorientating. So I think you’re right.
[00:07:11] Jason: Yeah. I think for this one, I would just say the error in.
[00:07:15] In it, if there is an error is just not appreciating the fact that it’s gonna be painful learning curve. And, anytime you go into a new situation and you say to yourself, this is gonna be a painful learning curve. I’m gonna have to muddle through for a while. It does something to your mind where it just gives you a piece about, okay, I’m just in the pain zone.
[00:07:32] I’m just in the painful. Bits of this with, but we’re all mature enough to know that you can work through stuff like that. But if you go into it and think, one’s gonna be like the other, especially like on the Amazon side to your point earlier, I think that’s where you can probably just get frustrated.
[00:07:47] And if you get frustrated and you quit, then you’ve wasted the time and energy of trying and you didn’t get any fruit or benefit of the outcome. So that’s obviously the thing to avoid is get in, get frustrated, leave, that doesn’t serve you well at.
[00:08:03] Michael: Agreed and you are absolutely right. That actually in a way.
[00:08:06] That’s probably more pernicious than doing something that isn’t right. Because if you follow through enough, your discovery of a sales channel works for your business, your product, your type of customer, et cetera. Maybe your customers aren’t on that sales channel. Or not in very great numbers, but you’re right.
[00:08:19] I think I see a lot of that. I see a lot of premature use of sales channels that it’s not right time for somebody to be doing that cuz they haven’t stabilized their product and the pricing. But also yes, I see people dabble and then get put off and you. I guess that, if you you expect to hit a curb and you know that it’s weird to drive on the left and you you’ve made your peace with the fact that it’s a foreign country and it’s foreign and yeah, that’s an important, I think you need to relish that when I go to France, I relish the fact that I drive on the right and that everything’s different.
[00:08:45] And I think, yeah, you need to make peace with. Being in a foreign country as it were well, the second, I think the next classic era for me is very related, but it’s more of a backend business model error, which is assuming that you’re solving the same equations and the classic way, this shows up for me, time and again, with otherwise highly experienced seven fake Amazon sellers is this, they sold on Amazon.
[00:09:05] They’ve made profits, so they’re not just making sales, they making profit. They understand how to do that, how to make, spend money on Amazon ads and you have your cogs and you. Outgoings and you have your incomes and they make it profitable. And then they add a direct to consumer site without necessarily huge amounts of thought and understanding, but maybe a certain amount.
[00:09:23] And then certainly they’re wondering why they’re making a loss when they’re spending money on ads like they have on Amazon, but the conversion rates lower. And they’ve got a cost of requiring customer of say $20, and then they’re making $10 gross profit. And of course, they’re trying to solve a different equation because on Amazon, the downside is you don’t get to upsell down.
[00:09:40] So cross sell and sell to the same person for the next five years. Okay. But the upside is that it’s incredibly high conversion rates cuz it’s this trusted shopping channel and on Shopify, your own due to see it’s the opposite. So yeah, that’s a cultural thing. That’s an equation business model shock.
[00:09:54] I would say what you’ve got tons of experience with this. What’s your experience?
[00:09:57] Jason: Yeah. I didn’t know what you were meaning by that when you first had it, like in our little, notes that we do together, pre-show notes, assuming you’re solving the same equations. I didn’t quite catch the nuance there, but you’re totally right.
[00:10:07] And I totally get what you mean. And I, so I guess what you, the way I would say it is each marketplace has a different, cost model. And profitability path. And if you apply one pro profit model, profitability path and cost model to a different marketplace, assuming that it’ll be similar, you’re gonna be it’s recipe for disaster.
[00:10:29] Yeah. So take your point completely on this one. And it’s totally right. The simplest way to point that out is when, and when I do this all the time, when Amazon sellers who are successful, they have. A great six or seven or eight figure Amazon business. And then they say they wanna build a direct to consumer Shopify site.
[00:10:44] I say, most consumers package, good companies, spend, about 15 to 22% on marketing, 15 to 22% of their top line revenue. So are you prepared to do that? And I’m like, whoa, no, we don’t spend any, we only spend a little bit on EMS ads on our Amazon sales channel. That’s the difference between direct to consumer and, and Amazon, you have to find the consumer.
[00:11:06] So the math is totally different. And, and then we walk through that. What does that look like? How much do you have to spend on this and that what goes into that, 15 to 22%, and on. So walking people through those math differences, I think to your point is, a part of learning the new channel and.
[00:11:23] And learning the nuance of it and every channel’s different, we at selling Etsy’s totally different than Shopify. And so it is an interesting thing to think through. I completely agree with what you’re saying there.
[00:11:33] Michael: I think for me, the important thing is to have thought it through and have a basic, concept, probably learning from other people initially probably smart enough to come to you for Shopify advice.
[00:11:43] If they’re a marketplace seller, for example, , So that at least conceptually, they understand that it’s very different a bit like you went to, Germany expecting everyone to speak English and maybe you’ve ended in rural Germany and everyone speaks German. Actually, if you know that in advance, even if your German’s terrible, you can at least be prepared for the fact that maybe you’ll hire an interpreter if you’re at a business conference or, some work around.
[00:12:02] So I think you’re really right. Going in mentally prepared for that is important. That’s where a coach can be invaluable. I think for me. The third era is again, quite related. It’s trying to use inappropriate strategies for the channel. Now this is more the flip side. A lot of people have been, Amazon have been listening to, sell on Amazon, primarily have been listening to people, talk about Shopify type strategies and they’re getting it very, by curious if you like about, oh, I could send Google ads or Facebook ads and all the stuff that everyone who’s got a direct to consumer site.
[00:12:28] Kind of has to do, but is also an opportunity because their math, if you like of their business, makes sure that if you acquire a customer, it’s very expensive, but you do have the opportunity to sell to them again and again, over time. Whereas I’ve seen a lot of people, like even in the last one on Wednesdays, there may be a sort of high six figure sellers.
[00:12:46] So not quite as big as some of the other sellers, but was really asking the question initially in the mastermind, something like how can I use external traffic to drive a bunch of sales on Amazon? I’m very glad that I’ve got into the habit now of asking what we call clarifying questions, which we have as part of the discipline, the ma buy now.
[00:13:01] And I said, okay, so what is it you’re trying to achieve? And when we peeled back a couple of the layers of the onion, it was clear that what he wanted to do was he felt he was overstocked and wanted to clear some stock. And so we all agreed, put the price down and spend some money on advertising on Amazon.
[00:13:14] So in other words, he was trying to use a tool that was appropriate in one type of context, one sales channel to solve a problem in another sales channel. And it was just the wrong tool for the job. But at least we concluded that as.
[00:13:25] Jason: Yes. I completely agree with that. Although your example begs the sort of question, which is, if you have competitors on Amazon who are playing inside that games box and you can draw outside lines, those, the, that.
[00:13:41] Example where there’s solve this, connect these four Dotts with three lines or whatever it is. And then you try to do it and you can’t, but somebody draws outside of the grid and it easily is achieved. That example that you mentioned reminds me of that where as it happens, if you’re competing in, in, on any marketplace against marketplace sellers and their whole mindset is how do I use this marketplace only, and its tools only.
[00:14:08] And you can actually bring other resources to bear the most obvious being your own newsletter. the email list, then you’ve got a massive advantage. So I think you’re, there’s the, a big downside and a big upside to applying additional tools because, because it can cost a lot and take a lot of money, and not work or, and just waste, time and energy be inefficient or it can.
[00:14:33] Bring new eyeballs to your listings and creative ways. And that can really be a huge breakthrough. That to me was probably our singular largest breakthrough when we launched our business in 2008, 2009 on eBay, because we, we immediately started doing YouTube videos. I know, it sounds like a funny combo , but we did eBay auctions and we did YouTube videos and, and contests, and we created our own, our own audience quickly.
[00:15:04] And what happened was that audience then ratcheted up our auction prices so much. We would sell an item for three, four, $500 and the competitive items were selling for eight, nine, $10. And then that created its own buzz inside the marketplace. Oh my goodness, what in the world? How are these people, doing this what’s happening.
[00:15:27] So anyway, not to, go on and on about it, but I do think this is a really important error, but also opportunity, which is considering the tool sets for the marketplaces.
[00:15:37] Michael: So let’s, there’s a great nuance. It’s not a subtle nuance, like $500 versus $8 is a huge, measurable difference.
[00:15:43] Yeah. But I would say what may be, what I could, I should refine what I was saying to. Not even as general as using paid external methods that aren’t appropriate to your business model as wrong. That could still work depending on the equation. If you’re selling something for a hundred dollars and the conversion, rate’s 30%, you’ve probably got quite a lot of wiggle room to drive a lot of external paid traffic.
[00:16:02] But to your point, you were talking about building community, which is a different skill set and a different mindset as well. He would, he, in a sense, this is interesting. So in a way, I think he was approaching an Amazon sort of marketplace type problem with a mechanistic, Amazon seller type mindset, which I can relate to.
[00:16:16] Whereas what you did is had more holistic mindset of creating a community and that’s probably more effective and sustainable. And then the other thing is, and another thing is that you were selling. Could your dolls close, which is super niche. So presumably the people who like it are really passionate, whereas that doesn’t happen to apply to my client’s product.
[00:16:32] Maybe why he’s not too much stock. Yeah. Generics problem. But the other thing is the difference between organic and paid, obviously, without trying to be, too obvious captain obvious about it, that you developed a strategy that relied on organic traffic, which means that obviously the cost structure is very different again.
[00:16:47] Jason: Yeah, totally. But all that goes into this third idea, which is you’ve gotta marry the tools and strategies to the marketplace appropriately in the most optimal way for your outcome, successful outcome. And that’s the gist of it. Yeah. Okay, great.
[00:17:02] Michael: Yeah. So I know you’ve got a couple of areas that you’ve seen, around this area.
[00:17:06] What would you say is error number four or error, as you say in the states error
[00:17:10] Jason: was error four. Yeah. It’s really E this one’s really easy and that’s just underestimating the work involved and getting the new marketplace up to speed. And, you, we all do this, we hear about something and we get sold on it.
[00:17:21] Maybe we watch a webinar or see some kind of amazing, sales video or something like that. People sell us on the idea of you. Posh mark being the next huge, opportunity or whatever it is. And, and so we get into it because we are drawn to the, the opportunity. And then we quickly run into some barriers and then we just don’t, we just don’t fully understand the.
[00:17:46] Cold start problems that can exist as Amazon employees call it on Amazon platform to, to get your velocity going of your product sales and to actually make a meaningful number, start to occur so that you can then justify in your mind why you’re operating in the platform. And there’s a real, concern with launching a new platform and that’s that you can get into it and you get on the platform and do make some sales, but it’s not enough to interest you.
[00:18:13] Or to really get your creative energies and investment of time and money and effort into it. And then you abandon it ish, but you’re still there. Ish. And then you have the zombie channel where you’re like, we sell on that, but yeah, we, we do $300 a month and no one cares about it and that’s no way to do a channel.
[00:18:33] And so I think underestimating the work involved, is. Is a significant, mistake and you need to treat these, like they’re launching a, almost like launching a new brand or a new company almost. You have to come at it loaded for bear, as they say in the hunting world. And it, that way you really say.
[00:18:55] I’m gonna come after this and I am gonna just grind obsessively. One thing, this is my big thing for the year is getting Walmart up to, $5,000 in sales a month, or like whatever your goal, would be. And I think that’s an important, thing to bring to the party.
[00:19:10] Wrapup: Hey folks. Thanks so much for listening to the e-commerce leader. We hopefully have touched on a nerve here. I think the reason this topic came up between us is because we’ve seen this a lot with our clients launching an e-commerce sales channel is a great opportunity, but it does come fr with a few dangers.
[00:19:27] Most of which is strategic or principle or mentality based. Actually the one thing I’d like to say is. To pre echo what Jason said at the end of the whole of this sort of section. This interview was this, that there is a great argument for multichannel. You should really be looking into omnichannel strategy because so Jason’s metaphor to steal this from the end of the next show.
[00:19:52] It’s a legged stool. If you’ve got one solid sales, Say it’s Amazon. Your one account closure away from no sales in your entire business. Whereas if you’ve got two then say warmup, you’ve got two things to lean into and you’ve gotta back up a secondary channel. If the primary channel goes down, if you’ve got three, say you add a direct to consumer or Shopify or WooCommerce site, then suddenly you’re much more stable.
[00:20:14] And it’s the kind of business you want to run. And I would say also it’s the kind of business increasingly that will be more sellable. There’s been a big. In recent couple of years are very sellable Amazon businesses, but that wave has come to a bit of a crushing close for the moment because the aggregators have stopped buying to the most part anyway.
[00:20:33] And so having a more stable sellable business I think is gonna become ever more important. Especially if we’re going into slightly tough or even really tough economic times, the people out there with serious capital will not stop buying businesses. At least they might for a time, but they’ll start again.
[00:20:51] And the safer and more secure business is the more that’s gonna chime in with perhaps a different mentality of more cautious investor, mental out. And indeed, if you are going to stay the owner of your business for a long term, then you also want a really stable business for yourself. So either which way don’t let, what either of us said today, put you off starting a new sales channel for your business on the country.
[00:21:16] We both would strongly encourage it, but just make sure that you avoid falling into the traps and the best way to avoid that is to work with somebody. Who’s seen all this stuff before. And it’s talking the next episode about a little story with a client of mine who’s sold in other channels successfully and is just about to launch on Amazon.
[00:21:34] I must have done, I dunno how. Probably well over a hundred Amazon different businesses over time that have launched nevermind a hundred product launches that I’ve been involved with another way, one way or another, my own business partners, my clients, coaching clients, whatever it may be. And Jason would have similar stories to tell about Shopify store ownership, which is to say that people have started on the Shopify, moved to Amazon all the other way around.
[00:22:01] So there is help out there. If you wanted to reach out to myself or Jason, if you feel that we have the appropriate business knowledge, you’re very welcome to, but whoever you use amazing FBA for me, by the way, Michael, and Omni rocket to just Google it. Om. For me, mother N for November, I Omni rocket is Jason and Kyle’s business.
[00:22:23] But whoever you use, I would so strongly advise you to mentally play out the game, avoid the tracks before you even start falling into them. And that’s the smart money so much, that’s frustrating and so much quicker success. And hey conclusion, go multichannel. Just don’t fall into the obvious errors.
[00:22:39] Get some advice before you go launching and you should be well set to grow a lovely stable business. That’s attractive and gonna be around for years to come. Thanks for listening. Look forward to seeing and speaking to you soon.
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