View the replay and summary of the Building Your Business Beyond Amazon live webinar from January 10, 2017. This webinar featured Andrew Youderian of eCommerceFuel, Steve Chou of MyWifeQuitHerJob.com, Chad Rubin of Skubana, and Jeff Cohen of Seller Labs.
How do you know when it’s time to start your own store?
- Steve: Whenever you’re selling your own product and you’re in it for the long term. Starting your own store is a much slower process than selling on Amazon because you have to build your own marketplace. You have to build your own audience. Expect it to take longer.
- Andrew: You can start a Shopify store with pictures and listings within a few days. Start getting some inbound links and ads so people can find and see you. Use Amazon to test products and build up revenue. If you see traffic then it makes sense to move to your own store.
- Jeff: You want to grow your brand beyond Amazon.
- Chad: Amazon is like a gateway drug; it’s easy to get started and hard to leave. I think Amazon is a great place to get started. You should be taking your profits from Amazon and moving them off of Amazon. Amazon is simply a channel to sell on.
The concept of off Amazon and the concept of building your own store. Is Amazon a supplement channel or the main channel?
- Steve: Most of Steve’s time spent selling is with his own store. He put stuff up on Amazon two years ago and it sold super quick. Steve spends the majority of his time trying to build an audience for his own store. The work to improve an Amazon store is fairly simple compared to your own store.
- Andrew: Almost always 100% onsite compared to Amazon. Amazon is brutal for reselling top brands. Most people sell on their own store. Jet and Walmart are two big platforms.
- Chad: Fifty percent of all sales are happening on Amazon for Chad. Whereas, the rest of transactions are happening everywhere else. He looks at e-commerce the same way one would play Monopoly—you have to be everywhere to win. CrucialVacuum.com has been around for 8 years. He created Skubana to manage all of his inventory. His own shopping cart is where most of his margins come from.
How many SKUs do you need to expand beyond Amazon?
- Andrew: The number of SKUs should dictate expanding beyond Amazon. Instead, how well can you execute on the number of SKUs you offer?
- Steve: You can put together a great sales page for a single product with a CTA to the shopping cart.
- Jeff: Your website is a great way to brand and engage your audience with what you’re doing and selling.
What are some of the pros of building your own website?
- Steve: It’s all about getting repeat business and establishing your own customer base. Twenty-one percent of Steve’s past holiday sales came from repeat customers. You just email them and the sales start coming in. You can create a great B2B presence if you have that kind of product. Selling to a repeat customer is easier than always trying to acquire new customers. This strategy gives you more longevity for your business and creates more barriers to entry.
- Andrew: With your own platform, you have a way to merchandise and showcase your own products anyway you want. With Amazon, you’re restricted to their format. You can discover pain points within a shopping process to help educate sellers. You can tell a story about your product and create a narrative. You can sell non-commodity products off of Amazon more effectively if you have your own store as well.
- Chad: He looks at the world as selling everywhere. It’s not binary. You need to humanize your business. Amazon is like a vending machine. There is Coke and Pepsi, and there’s not much room for RC Cola. When you sell off of Amazon you have much more flexibility to tell your story. There are a lot of value props to being an expert and allowing customers to contact you because you have experience with a product.
What kind of profit margins should people expect when selling on their own stores?
- Andrew: Your profit margins should be fairly close based on the net. You need to account for advertising, packing and shipping when selling on your own store.
- Chad: Amazon has a rule in its TOS about price parity. Walmart forces sellers to abide by price parity as well. You can sell a similar product with a bundle or pack on Amazon for a higher price. There’s a lot of value to selling to your own customer. When you sell on Amazon, you’re selling to their customer. You can remarket to your customers and implement marketing automation to announce deals.
What tools do you use?
- Chad: Klaviyo for email automation, Shopify on the backend, Critio (similar to AdRoll) for display following, Facebook lookalike audiences.
- Steve: Klaviyo, AdEspresso for Facebook campaigns, Power Editor in Facebook for retargeting, Privy for email pop ups
- Andrew: Shopify has become the go-to solution, MailChimp has gotten better with email marketing and segments, Yotpo and Judge.me for reviews
- Jeff: The biggest benefit of running your own store is owning the customer and telling your own story.
Cons of running your own store. What do you need to be aware of?
- Andrew: It’s much harder than Amazon. It takes a ton of work. You won’t see a lot of traction quickly. You have to build a web store that represents your brand. It’s getting harder to get noticed on Google and Facebook. Google has shrunk the above the fold results. Facebook is getting more expensive. When you advertise on Facebook you’re trying to advertise to people who are browsing through their feed. The biggest con is generating traffic and managing all of the moving parts.
- Chad: He agrees with Andrew. It’s hard and that’s why you don’t see many people starting their own stores. You can learn a lot from the eCommerceFuel forums.
- Steve: Because starting your own store is harder to do, there’s a smaller chance that a competitor will follow suite. Plus you will learn about new tools and platforms, which will help your Amazon business as well.
- Jeff: When he started Textbooks.com he owned the space upon starting. He ranked number one on Google for ‘textbooks’ within three weeks of starting. The days of ranking on Google easily are behind us. It’s much harder today. The same can be said about Amazon. It’s harder to sell on Amazon today than it was a year ago or even two years ago. Amazon will become a more difficult channel to sell on. If you can figure out how to build your own site, the longevity of your business will increase.
How do you fulfill your products?
- Steve: He has his own warehouse and employees who do the fulfillment. They stitch monograms on many of their items and send them out. This is a huge value add that’s hard to replicate on Amazon. It gives him a leg up on fulfillment and allows them to control the whole process. He uses FBA on Amazon. They portion out the inventory and send it to Amazon.
- Andrew: His previous store used drop shipping. He stopped because drop shipping is facing some strong headwinds.
- Chad: In 2012, he had a warehouse with a lease and employees. It was difficult to find quality warehouse employees. He found a different solution through a boutique warehouse. This was important because it wasn’t his core competency.
What type of challenges will you face when moving to your own store?
- Andrew: The hardest part is that you don’t have the visitors like you do on Amazon. You have to drive the traffic. Every business has a different sweet spot and marketing strategy that will be effective. You need to figure out how much it costs to acquire a customer. You can lose money on a first order if you know that customer will come back and order more.
- Steve: He sees e-commerce like a chain. With Amazon, there are only a few things you need to worry about: sourcing, perfecting the product listing and PPC. But if any of the links in the chain break with your own store, you can have real problems. The average conversion rate for a store is about 2-3%, which means everyone who visits your store, 97% of them won’t convert. This means you have to add all sorts of systems to ensure that they come back. All of the systems work together to bring people back as well as how you’ve designed it for optimal conversions.
- Chad: Know what your strengths are. Chad outsources most of his weaknesses. It’s not about doing more but doing less and letting people who are experts do it faster and better than he can do it. He uses many remote employees for PPC, Facebook and customer support.
Tell us about the Amazon/Shopify announcement and how it affects sellers.
- Andrew: The biggest thing this announcement brings is the ability to push Shopify listings on to Amazon. You can push the data and images to Amazon. You can fulfill Amazon orders within Shopify now. It’s like a mini ERP (enterprise resource planning) and order functionalities.
- Jeff: This means that the relationship is getting stronger, which means there will be more development in that area moving forward.
- Steve: It goes back to what Chad has been saying, that Amazon is a marketplace and you want to be selling on as many marketplaces as possible. Shopify makes it easier to do that.
How did selling on multiple marketplaces help Chad when his Amazon account got suspended?
- Chad: On December 26, 2016, he was notified by an employee that Seller Central was asking for an updated credit card. He updated Seller Central with a new credit card and within minutes his Amazon account was suspended. That meant that 50% of his revenue was gone for the time being. He had been suspended three times before. He spent the rest of the day reaching out to people he knew who either worked at Amazon, had worked at Amazon or were a consultant of some sort. Two instrumental people who helped him were Ed Rosenberg and FeedbackRepair.com. They worked with Chad and got his account reinstated within 30 hours.
- Jeff: What this means is that by having a multichannel approach you have more control over your business. So if you do get suspended by Amazon, you have a backup plan. But a 30-hour turnaround is impressive.
- Chad: There’s an art, and partially a science, to getting back on Amazon. He luckily had a network of experts to help him get reinstated.
How and why did Chad get suspended?
- Chad: Amazon said he had another account. He only has one master account, which is what the TOS says. But Amazon associated his credit card with another account. He received an email from Amazon the day after he escalated and kept escalating the case saying that they air on the side of caution.
What tips and tricks do you have on building a customer base?
- Steve: Make sure you get some piece of identifiable information from each person who lands on your site. He’s experimenting with PushCrew. There are various ways to get a person’s permission so you can contact them later on. Things like a Facebook pixel work.
Chad, what are the top three marketplaces to target besides Amazon?
Andrew, what are your thoughts on Google shopping?
- Andrew: Yeah, it’s still a thing. But I’ll defer this question to Steve since he knows much more about it.
- Steve: Google Shopping is his highest converting PPC ad platform at the moment. The only problem with Google Shopping is that it’s not a high-volume outreach tool. You’re limited by the number of searches available. It’s up to Google when your ads show up.
Andrew, what is the number one complaint discussed most often on EcommerceFuel.com?
- Andrew: One recurring theme I hear from many people is that it’s really difficult to find someone that you can outsource your paid traffic to and to have them do it well over the long run. You need a Facebook and Google Ads expert who can do it long term and do it well. Overall, you just need competent digital marketers. Acquisition costs are getting more expensive. It’s just going to increase, to pay to get traffic.
Chad, are you doing Amazon international at all?
- Chad: Yes. He is completely international and he has a warehouse in Ireland. Your next step beyond Amazon US needs to be Canada. After that, most people think Amazon UK is the place to go but Amazon Germany is the second largest marketplace asset that Amazon owns. Getting to Amazon Germany is harder but once sellers commit and make it happen, it’s ripe for the taking.
- Steve: He just sells to Canada, Australia and the UK.