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Magento and multi channel selling

Nowadays it’s not enough to have one web site. The E-commerce marketplace keeps evolving and you need to proceed with it to maintain. When I first began 15 years ago, it was relatively new. It was an extension to your B&M shop that brought in additional income. So you’ve got two sales channels. Through the years the world wide web has grown, and some very big players are now well established. Particularly Ebay and Amazon. There are a substantial proportion of consumers that will look first at one or the other of those sites, when they’re looking to purchase. Indeed some people no longer buy anywhere else. So you’re missing out of a high number of possible customers should you not look at selling on these stations.

With multi channel selling there are three challenges

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Stock Control

It’s never a great idea to run out of stock. There’s nothing more annoying than having dictates which you can’t fulfil. It’s very annoying when such arrangement (s) are on a third party station such as Ebay or Amazon, since they actually don’t like this and will penalise you. Indeed with poor inventory control you might end up giving priority to revenue on those third party stations rather than your customers who wish to purchase either in your store or from your web site. Because you won’t prohibit yourself from selling on your own website!

That means you must either book stock for each station. Which inevitably means you’ve got to invest in more inventory. OR you utilize a central stock control system which automatically updates all inventory levels on all stations whenever you’ve got a sale on any station.

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This is where using Magento is useful. There are a whole lot of options around that can do this. Not least M2E Guru, which incorporates Magento with Ebay and has begun to incorporate it with Amazon. This is now free, largely because Ebay bought Varien (the company that develops Magento) and have subsidised this expansion. They need more people to record on both Magento websites and Ebay. I use a solution named Linnworks, since it also does my purchase processing and integrates tag printing with my preferred shipping. These aren’t the only solutions available.

The thing to watch for when assessing a multi channel inventory control solution is the way it works. Especially the time lag between obtaining an order and another station shares being changed to reflect this. If you only make a couple of sales of an item per day, then this won’t be critical, but to get a fast moving thing, even a 10 minute lag might be too long. If you get really unlucky you may sell your last couple items concurrently on more than 1 station, and be left with orders you can’t fulfil.

Data Entry

If you sell one thing on three stations, then it needs to be recorded on each channel. Thus you need to put in it three times. Now the majority of the inventory control solutions typically allow you to produce a single entry, then it’s pushed onto each station. Then there’s a fundamental stock database (Linnworks and comparable ) or Magento is used for the inventory database (M2E Guru ). There isn’t any perfect solution.

Magento has a great deal of pages of data required to be filled to completely create a product, so in case you make it on something like Linnworks, you still must go in and finish the entry.

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Amazon may have more than one catalogue entry for the product. Though it’s frowned on by Amazon, it’s foolish to dismiss these other entrances. For inventory control however you should have just 1 inventory control item and these copies will need to be linked. A similar problem exists with Ebay in which you might have a lot of listings for the identical product. Any solution should allow you to list several copies without diluting inventory control.

I don’t know of any expansion that takes listings from Amazon for entry on to Magento. They seem to do it the other way around. A gap in the industry perhaps?

See also:

https://gritglobal.io/blog/enterprise-ecommerce-platform-decision/

https://gritglobal.io/blog/reduce-inventory-holding-cost/

https://gritglobal.io/blog/how-to-select-the-best-ecommerce-platform/

https://gritglobal.io/blog/managing-backorders-preparations/

https://gritglobal.io/blog/b2b-ecommerce-model/

https://gritglobal.io/blog/optimize-bigcommerce-backorder/

Pricing

Third party sales channels charge commission. Amazon for example charges 15 percent on a lot of its classes. Thus you have to raise the price of your offerings on such channels to keep your margins, or take a lower profit. However Amazon frowns on you undercutting them on your own website. Amazon UK actively seeks out such undercutting and treats every case for a policy violation. After a few of them you get suspended and then banned.

This becomes a problem when you change your price on one or more stations. How do you keep them in line? I don’t know of any automated solution here.

Advantages and Disadvantages of Multi Channel retailing

Whilst selling on several channels could increase your earnings, you need to be mindful that the clients on Ebay and especially Amazon, aren’t YOUR CUSTOMERS. They are Amazon’s and Ebay’s clients. Their loyalty is to the sales channel rather than you. They’ll purchase from whomever is more affordable, or provides better perceived value, rather than return to you. It’s possible to divert some from Ebay to your own website, since you can actively promote your website with leaflets and provides contained in every delivered order. You can’t do this for Amazon orders. Should Amazon catch you doing this, then it’s a policy violation and will get you suspended and possibly prohibited.

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The issue is that a growing number of customers are moving to Amazon and Ebay. As more retailers do multi channel selling, the variety and value of offerings on both Amazon and Ebay will increase. Thus more people move to utilize these stations. Thus by doing multi channel selling you’re promoting it. There’s not any simple solution to this. Whilst it’s good business to expand and increase your earnings, by doing this you’re feeding a rival, who might turn around and bite you. It’s very similar to having a tiger by its tail.


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