|Image Credit – Neil Patel|
Hey, everyone, it’s Neil Patel, and today is another day of eCommerce Unlocked, and today we’re going to be diving into sales channels. But before we really dive into the current landscape, let’s go back into the past so we can see how eCommerce has evolved, because that will gives a good understanding of where it’s going and what we need to do to succeed.
So let’s first start off in 1979. Aldrich connected a television set to a transaction processing computer with a telephone line and created what was he coined as telescoping. Meaning shopping at a distance. And if you fast forward,France launched Minitel. In essence, it was through telephone lines, and it connected telephone subscribers to millions and millions of other users.
Over nine million Terminals distributed connecting 25 million users. It peaked around 1991 and then pretty much the Internet took over, which killed it. And then if you keep fast forwarding into the early ’90s, you now have SSL. SSL is what encrypts data being processed online so that way, in other words, it’s secure and you can swipe your credit card.
And really first started coming coming about in 1994 with Netscape, and that really helpedpush eCommerce forward. In 1995, Amazon ended up launching an online bookstore. Brick-and-mortar stores were limited to roughly 200,000 titles. And that may seem like a lot, but Amazon could prettymuch have every single title because they weren’t limited by the size of a store. In other words, anything you can imagine when it related to books, Amazon carried.
And now if you think about Amazon, they carry way more than books, way more than apparel. Heck, they even offer things like food. Then, with eCommerce, Amazon started offering reviews, and people thought this was crazy. Hey, you could go on Amazon and leave a review? Why would people selling on Amazon want that? Well, it provided a better experience to users, which made Amazon more popular, and then companies who were selling products eventually figured out, “Heyif we create a better product, “we’ll have better reviews and we’ll generate more sales.
” And in 2005, Amazon took it one step further and they announced a Prime membership, which was free two-day shipping for an annual fee. Eventually, the Prime memberships kept going up in cost,but it’s still cheap. Nowadays, you can get sometime seven next-day delivery free included in your Prime membership. Of course, then there’s also eBay. It came out in 1995.
In 2005, then you had Etsy, which is a different version-of eBay but for handmade goods, which has done over a billion dollars in global sales. In 1998, PayPal opened its services. PayPal really got popular through eBay because anyone who bought oneBay ended up using PayPal, and now PayPal, funny enough,is a bigger company than eBay.
In 2001, Amazon launched the first mobile commerce store. 77% of Americans own a smartphone. If you think about it, in 2018,during the holiday season, which is one of the peak times, 40% of all eCommerce purchases were through smartphones. Nowadays, smartphones make up the majority of eCommerce transactions. More people are shopping through smartphones than they are from their desktop computers. So what’s going to happen next? What do millennial want? What do people want? Well, trends continually change, and if you adapt, that’s how you win.
And before we go over the sales landscape, I wanted to first breakdown some of the history so you can see how eCommerce has adopted over time. Trends are very important because if you ride the trends, you can ride those waveband catch a lot of sales.
So what’s working in eCommerce right now? Well, if you’re not paying attention to other businesses out there, products that are working,the marketing tactics, you’re going to be in that 80% just like everyone else, where you have this eCommerce store and you’re not really generating any sales. Most marketing tactics don’t work. Following what everyone else is doing is going to lead you to fail because most people fail when they create an online business.
It’s usually due to low sales, or lack of experience,or tons of competition. No matter what your businesses, if you make enough sales, everything else prettymuch takes care of itself. So let’s look at the top retailers in the world so we can learn from them. Amazon, Walmart, Macy’s,all examples of people who are generating a lot of sales online.
Go look at the top players in your space and see what they’re doing well. See, in eCommerce, you don’t just have to sell products on your own websites. You could take some of these other stores that are really popular,like Amazon or Walmart, and start selling production these sites as well. With Amazon, yes, they take percentage of the transaction, but at the end of the day,you could end up making a lot of money by just having your products on Amazon.
When you choose the right sales channels for your business, you can leverage their infrastructure and allow you to get more visibility and generate more revenue. There are a lot of different sales channels out there, and each one has their own pros and cons, and we’ll cover most of them, but I want to dive into few of them right now. So Amazon, of course, is the number one site out there when it comes to eCommerce. According to research, 55% of Americans begin their product search with Amazon. It’s easy to use. They have a huge multi, you know, billion, actually, trillion plus dollar market cap, and they’re continually growing at a fast pace. Then there’s eBay.
It’s a marketplace that connects buyers and sellers directly together. Auction-based system. You can have a buy-it-now option. There are no fees unless you lose more than 50 items per month, and again, it’s an auction style. So things like vintage,rare collectible items, also do really well on eBay. And if you’re going to do handmade goods, Etsy is the place to go. They charge a listingfee plus per transaction. They also have amulti-billion-dollar market cap.
If you have a technology company and you’re selling technology products like, let’s say, computers,you can go to New egg. It’s a great channel for that. They have billions of dollar sin transactions on New egg. It reaches more than 20 countries and more than 40 million customers. There is a standardfree program for sellers along with two paid options,and they both work well. The paid options, of course,work better than free, but you can check them out.
So when you’re leveraging sales channels out there, you got to figure out what ones right for you, what ones work well for your space. For example, New egg works really well if you’re selling technology, but if you’re selling clothing, Newegg would be a terrible channel.
So it’s not just about picking popular sites. You got to look to see where customers are and what other competitors are selling, right? If they’re selling on that channel, and many of them are, chances are that’s a good place. And if they have a lot of reviews, that means there’s a lotof customers to be had on those channels as well. But understanding these channels, you can figure out, all right, how do you want to position your brand? Do you want to be handcrafted unique product, or a luxury vintage product,or expensive premium brand? Because for handcrafted products, Etsy does really well. Vintage products, I found that eBay does really well.
For example, I wear the same sunglasses. And every time my baby breaks one of my sunglasses, I go to eBay and buy the same old sun glass all over again, and I get it. I find it at a great price on eBay, and it’s one of the only places where I can get it. If I look on Amazon, I know I wouldn’t find it there. So you got to look at all these channels. And also figure out, “Hey, my product, is it right for that channel, “but also, can I make good money on that channel?” Because sometimes their listing fees may be too high based on your margin.
You got to take all those things into account. So when you’re developing your eCommerce strategy, you need to look at things like your audience, where are they, the payment processing systems. Does your audience prefer Apple Pay or PayPal or Google Wallet? And how do those payment processing channels interact with some of the platforms out there? All these things will affect where you need to list your items. Most people will start with their own website, and that’s fine. But remember, if youlist on your own website, you have to do your own marketing.
When you list on one of these other websites, they already have visitors. Sure, you may have to do marketing on their own platform, but they already have the eyeballs. You just got to convince those eyeballs to go to your product instead of someone else’s.
So some action items for you. I want you to download and understand the emerging eCommerce Trends and download the Marketing Acronyms Glossary. You can find these at neilpatel.com/training, click on eCommerce Unlocked, and go to Week One Lesson Two. At the very end, I want to leave you with this. I know we’re just starting, there’s a lot of channels out there.
Within eCommerce Unlocked, I’ll cover them all step by step so you don’t have to worry.
We’re just getting started. As we dive into week two,week three, week four, I’ll go into them in much more depth. I look forward to helping you grow your eCommerce traffic and revenue.