In this guest post, Tony Kyberd, COO of ecommerce platform and services provider Volo Commerce, focuses on how the insurance policy of multichannel ecommerce pays up.

In our first post we looked at how being on multiple online channels insures you against uncertain and changing circumstances. It comes with two caveats, however, which we outline in this post. Firstly, you can’t do everything everywhere, so you need to make choices to match your resources. Secondly, you need to find a way to centrally manage your multiple presences.


Where to Focus

It was probably your attention to quality and reputation that got you this far, so the last thing you want to do is to dilute that quality as you increase the number of places where buyers can find you. 

The first thing to do is to assess your own business. Where it’s strong, where it’s weak, what the opportunities are for growth, and what the threats are to success. What the competition is like in your category or categories. Using this information as a foundation you can then set your goals for where you want the business to grow, and what might the barriers to growth be. Those barriers might be your knowledge and expertise in certain areas, the current systems you have for running your business, your current staffing, your access to product, the way you do things, and the resources you have at your disposal. It could be one of them, or a combination of more factors.

Then it’s a question of fit. Some marketplaces, for example, are better suited to certain categories, or have a stronger presence in some areas. Some marketplaces have multiple country sites and vast coverage, others specialise in a particular country or region. Some web store platforms are easier to use than others, but scale less well. Some markets are more highly regulated than others, or more competitive, and some might be culturally more removed from what you’re used to. Some regions you can service without a presence or product locally, some you can’t. Some parts of your business you may want to contract out, some you may not. 

Sometimes all this can seem a little daunting to figure out, as it involves a good bit of knowledge and time. Before you commit resources to your diversification, it’s often wise to enlist the services of a company that can manage this process for you. They have an external perspective on your business that’s usually objective and compared to what they see in the industry. Plus, they specialise in working with businesses to recommend the channel mix that fits your business and where you want it to go. 

Your only realistic approach to do well on each channel is to take a dedicated approach to each channel

How to Centralise

Once you add a sales channel to your operations you increase the places where buyers can find you and you add a fresh revenue stream that can provide you with resilience if one or more of your streams stops or reduces significantly. The trouble is, you also increase the amount of work and investment required to service that channel and deliver a great buying experience. With just the one channel you can get away with mainly manual processes, but with a second or third channel, this becomes increasingly more difficult. The obvious example is stock level, where with every sale on a particular channel you need to update the stock levels you show on all channels.

In our experience, it’s the addition of a second channel that prompts companies to contact us to provide them with a system to centrally control what’s happening across multiple channels. 

Think of all the discrete areas of your business – supply/suppliers, goods in, inventory, warehousing, listing, marketing & promotions, sales order processing, shipping, customer service, refunds & returns, reporting and analysis, finance and so on – and you’ll realise that some of these areas you can centralise more easily than others. 

The number of marketplaces across the world is in three figures. Each of them operates separate requirements for general conduct of business, listing, order processing and seller performance. Each of them also relies on its buyers coming back repeatedly to make purchases, and is therefore single-mindedly driven to deliver the best possible buying experience. It passes this burden to you. Your only realistic approach to do well on each channel is to take a dedicated approach to each channel.

Again, this makes total sense. So how do you extend the same levels of quality and detail to your processes without your efficiencies and margins mushrooming out of control? You have three options. You can automate your processes as well as you’re able, or you can sacrifice more margin to outsource the processes to another company, or you can do some of both.

You can automate to various degrees. In the area of product data, for example, you can automate feeds from your suppliers to your ecommerce system, from your ecommerce system to the specific channel, and from the channel back you your ecommerce system. There are even tools that can take a data feed from your ecommerce system, automatically optimise the listing information for each channel, and then push that back to you for you in turn to update each channel. That’s how you can increase your channel coverage, scale your growth and not sacrifice on quality.

The mechanisms for automation vary in sophistication too. You can deal in the importing, exporting and emailing of spreadsheets, or you can set up FTP (File Transfer Protocol) sites to collect and deposit your electronic files, or you can get someone to build connectors between your site and other sites using APIs (Application Programming Interfaces). Many ecommerce systems also have direct integrations to the more popular marketplaces built into them, so you don’t need to build the connectors.

As with choosing where to focus, it’s a sensible approach to enlist the services of specialists in managing projects to successfully scale up a multichannel ecommerce business. These are people who know where the banana skins are and have the expertise to guide you towards the approach that’s the best fit for your business.

We can’t ever know what’s around every corner, but we can cover ourselves and make ourselves more agile with a presence in multiple channels and the technology and know-how to bring them all together.


Looking into a multichannel strategy?