Guest post by Augustin Kennady
eCommerce continues to grow in 2018 at an alarming rate, and with this growth comes the opportunity for more entrepreneurs to benefit by taking their share of the market. Historically, drop-shipping has been the most cost-effective way for aspiring entrepreneurs to dabble in eCommerce.
However, as competition causes margins too thin and oversaturation makes securing a competitive advantage even more difficult, these same entrepreneurs who would have been dropshippers a few short years ago are transitioning into launching their own branded eCommerce line. With a higher upside, more product control, and the chance to actually meaningfully engage with your customers, branded eCommerce has a lot of selling points. Here are 5 keys to succeeding in branded eCommerce.
Know your Product
Truly knowing your product transcends knowing its design and function specifics. You have to know how your product fits into your customers’ lives, what the competitors are, and what related products could end up influencing its popularity and profitability.
For instance, a computer mouse is a popular device peripheral. However, its popularity has waned somewhat in recent years, since tablets, laptops, and smartphones have lowered the demand for computer mice. If you were creating a computer mouse, it would behoove you to understand the interdependency this product has with desktop computers.
On a similar note, you need to understand how your product fits into your customers’ lives. Grooming products from companies like Beard King are often used in the morning, and thus partnerships or cross-marketing with companies that focus on bathing goods and toiletries might be a sensible course to pursue. The more you know about your product and how it is used, the better prepared you’ll be to create a meaningful branding and marketing strategy.
Scout the Deal
You still need to get your product manufactured. This is where branded eCommerce is fundamentally different than dropshipping. In some dropshipping cases, you will be shipping products from well-known and established brands. In other cases, you will simply be reselling cheap products mass-produced internationally with no discernible brand.
With branded eCommerce, you are going to hire the manufacturing company to create your product, which will likely include branding it as well. For example, imagine if you are selling wool sweatshirts. You will now have complete control over the look, style, and design of these sweatshirts.
This level of control and customization is extremely exciting. It is also, as you might suspect, stressful and frequently expensive. Your task will be to find the best deal. Note that the best deal often is not the cheapest. You will want to know what the turnaround time for the facility is. Be sure to ask to speak to another one of their clients. Ask what resources are available to you should anything go awry. And, especially important if you are working with an overseas company, ask about incoterms. Essential to the manufacturing and logistics industry, incoterms dictate which company (them or you) is responsible for the product at various times throughout the process.
One of the biggest mistakes neophyte entrepreneurs make is that they sell exclusively on a particular platform. The best way to reach the widest number of people is to sell on multiple channels. Sure, you can sell on Amazon FBA or eBay, but you also want to be sure that you have a shopping cart like Shopify linked to your site so that customers can purchase directly through your site. If you have a blog, you can consider WooCommerce.
There are two important reasons for this. First, you want to ensure that everybody who encounters your product has an opportunity to buy it quickly and easily. Second, it is essential to your brand’s identity that you cultivate that identity with your customers. If you were to sell on Amazon, your customers might buy and love your product and have no idea what your website is. Their loyalty will be to Amazon. Selling across multiple channels is a great way to boost or retain loyalty.
At a certain point, you’ll want to address the fulfillment question. Fulfillment is all about “how do I take my inventory and ship it out to customers?” In most cases, this question doesn’t really come up in dropshipping. But now you have the inventory, and it is your responsibility to get the product out to customers.
The good news is that you won’t be alone during this process. Generally speaking, the magic line seems to be anywhere from 20-30 orders per week. If you’re doing that much business, it might be worth it to outsource fulfillment to a professional fulfillment center so as to preserve your time and enable you to focus on other aspects of the business beyond rote fulfillment.
The issue, of course, is that no fulfillment partner is the right choice for everybody. There are a lot of variables that come into play in deciding what the best option is for you. This can include questions about where you ship most frequently to inventory rates, all the way out to random things like “minimum monthly usage fees”. Outsourcing fulfillment can give you a major head up, not to mention profound peace of mind.
Of course, all the feedback in the world means nothing if you don’t also have the ear of your customers. See what it is they are writing about you! Engage with them online. Offer promotions and exclusive deals through your website or social accounts to keep them engaged.
And above all else: listen. Your customers will tell you what you want to know, and they will speak with their wallets. Look for idle inventory and think about how to repurpose it. Speak at conferences and mingle with customers, partners, or even your boss!
These tips are by no means exhaustive. However, if you follow them, you just might become successful in branded eCommerce.
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