Multi Channel Sales - Sales % per platform

[RedKamo]

Hello all,

New here. I am currently doing market research into a product i can manufacture and sell online.

We are trying to create our online presence through developing our own website, and through ecommerce platforms such as Amazon etc, as well 3rd party sites

I am trying to find out very approximate figures for the size of the market, and the size of my own potential sales, in order to justify going online.

I currently use 'junglescout' to get approximate figures of different sellers in our industry (car care products) on Amazon. However, i would like peoples advice on, APPROXIMATELY, how much of a serious sellers sales would go through Amazon, and how much would go through other channels.

e.g. if i see someone is selling 10 units per month, can i assume through their multi-channelled approach, they should be selling 100 units overall? or 20? or 15?

I understand that this would vary with everybodys particular sales strategy, but is their an industry standard that says "well as a serious ecommerce seller, usually only 30% of sales typically go through amazon"

I know i can just start selling and see what happens, but we need to make some capital asset investments (to do with new moulds for bottles) to start selling. I would like to know if this market is worth developing basically.

Any views, opinions or past experience would be greatly appreciated!

 

[Page]

You are wasting your time beyond it giving you a rough feel for there being a market out there

And if so get on with it

All the rest depends on so many variables that it is near pointless - and will waste your time

Unless you are going to be spending big sums getting going - but I have assume this is not the case because if so you would not be on this forum asking that question

Is it the bank asking you waste time on doing this - if so let me know and I will have my banks are stupid it is pointless information - but also why they ask this rant

 

[RedKamo]

Hi there,

Thanks for the reply. No, the need for this information is just for my personal knowledge so that i can get a better understanding of what the market is.

My investment isnt astronomical, but it is still in the 40k mark, and i dont think looking at only amazon sales figures is an appropriate method for me to feel confident enough to get into this channel of sales. It still feels like a stab in the dark. And yes i understand that nobody will ever know 100% chance of their success rate, but going in guns blazing and hoping for the best is a waste of money, and much more important for me, a waste of time.

Thanks,

 

[Paul Kelly ICHYB]

As mentioned, this might be a nice thing to know, but impossible to estimate.

There are too many variable, not least everything to do with your website!

The only way to see is test!

 

[RedKamo]

Im not sure how it is impossible to estimate.

If the general trend lets say is that e-commerce for online sellers is 20-30% through Amazon, then if i know 100 units are sold on Amazon (as i can find out using JungleScout software) i can see approximately that total sales should be around 300. Now this figure could also be 200 or it could be 400. However, i can find see that it wont be 2,000 or 120.

Hence approximate, surely.

 

[Pish_Pash]

There are a few ways of selling via Amazon ...self fulfilled, fulfilled by Amazon ...or even supplying Amazon direct for them to sell (Amazon Vendor), so if I said it was X% via Amazon...it wouldn't mean much unless I also said which method I'm selling on that channel. (& different methods suit different products)

So whilst I won't give percentages (due to the variables they'd not mean much anyway), suffice to say, that if you get Amazon right, it'll dwarf ebay & your own website for sales acheived.

 

[Iain_Henderson]

What he (pish_pash) wrote! If you get Amazon right it will dwarf the rest..after a couple of years my split is roughly 80% Amazon, 15% eBay, 5% website.

However, you have no way of knowing without actually selling on these platforms what your split will be...and I'm fairly sure any comparison site/programme will use the public feedback stats as the basis which tells you the feedback 100% reliably but not the actual sales (and certainly not the sellers profit)

 

[RedKamo]

Hey,

Thanks Pish_Pash and Iain, thats the sort of information i was interested in hearing about, to sort of put together the jigsaw of market research into the likelyhood of sales.

I originally believed it would be more of a 30-40% split of sales on Amazon, and the rest on our own site, perhaps a small slice from affiliate sites and very little from ebay.

Im very surprised that (assuming your product is jewellery) that you'd have such high % of sales on amazon. I thought that such consumers would really want to read into the background of your products, the history, the manufacturing process etc, rather than just click and buy from Amazon, thats very surprising for me, thanks for your insight.

As i want to build my business solely online so i can control how my products are sold, and the immediate cash flow advantage of online sales, it makes me slightly less inclined to go into this project, or if i do, then maybe i should adjust my strategy to balance the lower than expected sales figures.

Still look towards other peoples experience of this process!

Thanks again!

 

[Iain_Henderson]

I think your price point is probably the most relevant factor (with regard to click and buy). I sell 'everyday' jewellery mostly so it has to be at a low price point which, in turn, exposes me to the larger 'click and buy' market segment.

If I was selling unique, diamond engagement rings I think my customer profile would be very different and, therefore, my sales platform split would be very different.

If having control is important to you be (very) aware that you give away almost all control when selling on Amazon. It's their ball, their rules, and they are prone to changing them.

Interesting read, and I now realise how lucky I was to only lose 4 hours of selling time when it happened to me in October...

http://www.thisismoney.co.uk/money/...hy-did-Amazon-close-book-selling-account.html

 

[RedKamo]

What a horror story, im trying to set up another store on amazon to supplement a successful bricks and mortar business, and the customer service of amazon is shocking. Absolutely no interest in making sure people can sign up to their service and sell through them and give them a sizeable portion of sales.

Im intending to use amazon to push sales onto my own site, and use that 15% cut to give customers extra products free, and keep them happy as repeat customers.

My price point is above the average with a product to reflect as such, as its so hard and uneconomical to try to outprice, particularly on amazon, so i am trying to build a brand too.

 

[Iain_Henderson]

Another wee bit of info then..about 15% of my Amazon are repeat customers..number I've converted to my website..about zero!

I thought the same as you..encourage them to your own site through discounts (it's hard to improve on customer service)..but it seems people are loyal to their preferred platform..

 

[RedKamo]

I think a certain amount of this % comes down to how much of an impulse buy your product is. If you need to learn more about the product, or if what your selling them isnt an item as such, but rather the experience of using a product then there is more room for your own site to have greater sales.

If your selling an eraser then i think more sales could be achieved through amazon. If your selling a swiss fountain pen with a superstrong tip handmade and all the rest of it, there is more score to sell on your own site.

Again if people identify with your product or there is a value association then again there is more scope for own site sales.

Just been doing further background reading and its all very interesting, the concept of customer acquisition cost against the value from that customer over lets say a 5 year period.

 

[billmccallum1957]

I thought that such consumers would really want to read into the background of your products, the history, the manufacturing process etc, rather than just click and buy from Amazon, thats very surprising for me, thanks for your insight.

Many consumers (I know it's a generalisation) wont be interested in background, history or process, only in the price and performance of the product they want.

I rarely buy online, but I do sell online and regularly use amazon and Ebay as a source of research for my pricing, but I would rather sell on Ebay or through our Facebook pages/groups.

 

[Pish_Pash]

Re that Amazon horror story posted above - they removed my selling privleges last year (for an innocuous reason - that I certainly hadn't intentionally done...nor was even aware of) - it took me two weeks & emailing everyone in the world (including Jeff Bezos) to get re-instated....something to think about when you hop into bed with Amazon....your whole business can literally disappear overnight.

 

[Page]

My investment isnt astronomical, but it is still in the 40k mark, and i dont think looking at only amazon sales figures is an appropriate method for me to feel confident enough to get into this channel of sales. It still feels like a stab in the dark. And yes i understand that nobody will ever know 100% chance of their success rate, but going in guns blazing and hoping for the best is a waste of money, and much more important for me, a waste of time.

Thanks,

At 40K I would do what research i could and give it a decent amount of time

The point i was trying to make is that the breakdown all depends and so you cannot work off that except with some fuzzy logic and thinking around it

Do you have to spend the 40K to get going
Or can you do tests for a fraction of the cost - my guess is that you can

What type of thing is the 40K going on

 

[amdowney]

We do most of our sales through our site and have tested amazon for some lines but with cut throat pricing and no way to differentiate yourself as a seller it doesn't suit the way we do business so cancelled the account. Depends on what you sell IMO - we do bundles based on custom requirements with tech support for added value - amazon is essentially an online vending machine at the cheapest prices. It's not always about being the cheapest.

However I am interested to hear what other shopping comparison engines people sell via aside from Google shopping with success in the UK?

 

[mtools]

Amazon is a funny one. On my site I sell around £15-20k a month, on amazon it’s around £2.5k. I’ve been selling on there for just over a year, website for almost 5 years. I did have most of my products on amazon but now only sell about 4 or 5, the ones that seem to sell well. Interestingly there’s products I sell on amazon every day that I only sell once per month on my website. Weird