How to start an ecommerce business that’s both manageable and profitable? This is a question that many would-be merchants have pondered extensively over the years, and for good reason. While there’s no sense in dithering endlessly over minute decisions, having an ecommerce business plan when starting an ecommerce business from scratch is integral to your success in the industry. So how do you develop an effective sales channel strategy? We believe that the first step to any major endeavor is getting all the information you can about the options you have at your disposal. Read on to learn the definitions of a few important terms and see some of the options you have available laid out and explained simply.
Respectively, it stands for Business-to-Consumer and Business-to-Business. Although some companies engage in both B2B and B2C meaning they have a split focus, most corporations have a core client base, either that of other businesses or individual customers. When you’re just getting started in ecommerce B2B vs B2C operations can seem confusing and opaque. Which one do you choose? Do you really have to choose between them? Which is best in regards to your business?
To tell the truth, most ecommerce sellers, especially when first starting out, go the customer route. It’s easier to set up a storefront and market to individual consumers over social media than it is to pitch your products to other corporations who may have pre-existing contracts. That’s not to say it’s impossible to get a big contract with a corporation when you’re just starting out, of course. In fact, the fact many merchants choose to go the direct-to-consumer route means you may have success in regards to ironing out a niche. A good handle on fulfillment is necessary for any company, B2B or B2C meaning warehousing should be a top priority.
B2B fulfillment occasionally means products are sent out to other warehouses or distribution centers rather than being delivered directly to the business itself. You may have to wait longer regarding decisions and purchases made under a B2B system as well, since all expenditures have to go through the company’s internal processing committee and occasionally a legal or contract team as well. The B2C pack, pick, and ship operation, on the other hand, moves about as quickly as any merchant might expect, as only the customer themselves decides when a purchase should be made. From the second the order is made to the second the package is delivered to the customer’s doorstep, there are few roadblocks or unexpected surprises that you’ll have to contend with. This is another reason why most merchants will choose to sell directly to the consumer rather than to other corporations. There’s of course multiple ways one can sell to customers, including Amazon’s split FBA/FBM system.
FBA, or fulfilled by Amazon, means that you have your products delivered directly to Amazon’s intake facilities. From there, they handle the rest, from picking to packing to shipping. For this service they charge a per-item fee alongside an order fee, which can add up after a while. Many merchants, however, especially ones at the beginning of their ecommerce journeys, believe that this fee is well worth the benefit of not having to deal with the finer points of the fulfillment process.
FBM, or fulfilled by merchant, is the opposite. Your products are listed on Amazon’s marketplace, but all fulfillment and shipping is handled by you yourself. This is some extra responsibility, yes, but also represents a greater deal of control over your customers’ experience. Instead of being dependent on Amazon’s infrastructure, where any mistakes on their behalf will negatively affect your product reviews, the buck instead stops with you. While it’s not quite the solution for how to sell on Amazon for free, it represents fewer fees up front.
FBA has a number of benefits, definitely, but there are a few drawbacks as well. First, there’s the matter of where to buy products to sell on Amazon FBA. Amazon may not accept certain products that they consider to be unwieldy, of non-standard size, or not profitable to pick, pack, and ship. If you deal primarily with this type of merchandise, you may feel out of luck.
Secondly, sellers are asked to provide four weeks of cover so merchandise can be evenly distributed across warehouses. This makes sure customers all over the country are seated comfortably within the Prime 2-day delivery range. However, their calculations of four weeks of cover may not actually be representative of the actual figures, leaving you feeling disconnected from the fulfillment process.
Lastly, if you’re selling through FBA, it makes the matter of scaling your operations to other selling channels more difficult. If you want to open up a storefront on Shopify, Ebay, or even your own dedicated store, it can be a hassle to set up all the necessary fulfillment operations from scratch. Meanwhile, when you’re already going the FBM path, that infrastructure exists to begin with. FBA is typically recommended for goods under around 30 dollars or so, while for branded goods over 50, you can begin looking at Shopify, FBM, and other selling channels where you have more control over the fulfillment process.
No matter which selling channel option you choose, P2Pseller has your back when it comes to booking warehousing, logistics, and transportation services that won’t break the bank. We allow small companies to find equal footing with regional and national giants, meaning you’re able to find the best solutions possible for your unique business needs and see all costs and fees totally in advance. We’d love to have you on board for the ecommerce revolution so you can grow your business bigger and better than ever before.