Congrats! You’ve beaten the odds and endured massive growing pains in order to scale your eCommerce business. Now, it’s time to take your brand to the next level.
But what’s the best way to scale?
If this is the question at the top of your mind, you’ve probably been hearing a lot of buzz over two simple words: global and multichannel.
For every person who tells you the key to success in eCommerce is branching out into new geographical markets, someone else will tell you to expand into new sales channels. And the truth is, both strategies present stellar opportunities for growth.
For example, businesses that take on multiple platforms experience an average 9.5% annual revenue increase, while cross-border orders for physical goods could account for an impressive 22% of eCommerce transactions by 2022.
No matter which direction you choose, taking the leap won’t be easy. But as long as you have good knowledge of what goes into both strategies, you can be confident in knowing you’ve the right growth path for you.
That’s where this guide comes in.
Today, we’re shedding a light on what multichannel vs. cross-border expansion can offer your brand, highlighting the pitfalls that come with each, and revealing why it’s not only possible to have the best of both worlds, it’s also very likely to be your best option for success.
Multichannel Ecommerce: What We’ll Cover
- What Is Cross-Border vs. Multichannel Ecommerce?
- The Highs and Lows of Multichannel Ecommerce
- The Highs and Lows of Cross-Border Ecommerce
- Multichannel Ecommerce or Global Expansion: Which Is Best for You?
- How to Go Cross-Border and Multichannel Successfully
- Win at International and Multichannel Selling
What Is Cross-Border vs. Multichannel Ecommerce?
Cross-border eCommerce involves opening your store to shoppers outside your home territory. For example, if your store is in the US but accepts orders from countries like China, France, or the UK, this is cross-border eCommerce.
Meanwhile, multichannel eCommerce is less about physical location, and more about virtual location — when businesses choose to expand to more than one eCommerce platform. For example, if you have an eBay store and then decide to grow your online presence on Amazon’s platform.
The Highs and Lows of Multichannel Ecommerce
Selling on multiple channels offers a ton of benefits that can help grow your brand — but they aren’t without disadvantages. Let’s take a no-holds-barred look at a few of the pros and cons:
Highs of multichannel selling
- Expand your store’s reach: A great way to increase revenue and profits is to simply reach more people. Multichannel eCommerce allows you to do just that by reaching new audiences through new marketplaces, and widening your prospect pool. 💰
- Boost your reputation: When your brand is accessible from multiple platforms and websites, it positions you as a trusted player in the market and makes shoppers more comfortable purchasing from you.
- Protect your brand from the unexpected: If you have just one sales channel, all it takes is one major problem (like an account suspension) to wipe you out indefinitely. You can shield your business from this risk by having multiple stores on different platforms.
Lows of multichannel selling
- Costs can add up: More platforms = more expenses. Even if you only add one extra channel, your costs can rise significantly. With each additional channel comes the need to pay for extra stock, marketing, and warehousing.
- Workloads may get heavy: It’s easy to underestimate what it takes to run more than one store. The additional duties can cause issues, especially if your team is already under pressure. 😞
- Brand visibility issues: Competition is only good to a certain extent. If you choose to sell on competitive channels, you might not make the splash you’re hoping for, as it’s easy to be drowned out by more established sellers.
The Highs and Lows of Cross-Border Ecommerce
Selling in different locations is a great way to expand your audience base and target new customers.
But it’s not always easy. Now that we’ve got a clearer picture of the benefits and drawbacks of a multichannel growth strategy, here are the real-deal pros and cons when it comes to cross-border growth.
The Highs of Cross-Border Ecommerce
- Create brand awareness: When your business is tucked away in your home territory, it can be challenging to get international shoppers’ attention and support. But going global allows you to step out and make your presence known, while attracting new customers and opportunities worldwide.
- Reach profitable new customer segments: If you feel like you’ve exhausted your most profitable audiences, cross-border selling allows you to reach out to customers that fit your target market in different territories.
- Sell more stock: Selling internationally gives you more opportunities to sell products, as well as new markets to test product ideas and improve sales.
The Lows of Cross-Border Ecommerce
- Complex tax obligations: Depending on where you set up shop, tax can become a very tricky task to handle. Not only that, governments don’t tend to be very forgiving of mistakes, which can lead to costly penalties.
- Cultural differences can create a barrier: Cultural differences shape the way consumers buy. Without understanding foreign consumers’ mindsets and behaviors, it can be difficult to win their trust.
- Administrative and legal challenges setting up abroad: In some territories, registering and operating a business as a foreigner can be difficult, and the registration process itself can also come with high costs.
Ready to grow your brand far and wide? Find out how SellersFunding can help.
Multichannel Ecommerce or Global Expansion: Which Is Best for You?
To improve your odds of success, it’s critical to pick the growth strategy that best fits your brand’s desired trajectory.
And remember, there’s no right answer. Your brand’s unique growth philosophy will dictate which direction you take.
Let’s make sure you look at all the right things before you decide to jump feet first into any one strategy.
First, get real about your goals
Ultimately, the best growth strategy for you will come down to your unique goals for your brand, and your life. Do you want to build a solid reputation and revenue on your home turf? Multichannel is where you need to be. Hoping to be the next Amazon? Going global is a must.
Get clear about what you want your brand to look like over the next 6 months, 1 year, and even 5 years, to help guide your decision making and ensure your strategy matches the results you want to see.
Take a hard look at your finances
It’s important to figure out how much your expansion into your chosen country or platform will cost. Here’s a quick game plan to establish which path makes the most sense for your business, so you can avoid any nasty surprises later on:
- Research your target country or selling channel to find out average start-up costs.
- Compare these costs against each other and decide which has the best payoff for the expenses and risks involved.
- Look at your cash flow and current expenses to know whether you can safely fund your expansion using existing profits.
- Consider whether there’s a need for any additional eCommerce funding.
Size-up the market opportunities 📋
Sometimes a business opportunity will require you to act fast to secure your spot.
Say for example, you sell luxury bedding that’s growing increasingly popular in Thailand, Malaysia and China, but few stores serve these markets. You also discover the demand in your territory has remained steady on most eCommerce platforms for these products.
From this information, you could decide that going global would be a wise business decision because you can make more money and establish your brand as a top player in that niche.
Whatever the case is for you, make sure you’ve taken the time to lean in and really assess the potential of the new market or sales channel at hand.
Consider global and local expansion
Going multichannel and global might sound like a crazy (and expensive) idea, but hear us out.
If your business is financially strong and has enough staff to tackle the challenge, going multichannel and multi-market can be a game changer.
By attacking the eCommerce market from different angles, you can propel your brand ahead and mitigate the risks associated with being on just one platform.
Done well, this approach could help you:
- Skyrocket your sales and growth
- Improve your brand’s notoriety
- Build a global community
How to Go Cross-Border and Multichannel Successfully
Pick your sales platforms strategically
In recent years, marketplaces have successfully taken over the eCommerce world — and their revenues are the envy of many. In fact, Amazon’s revenue hit a jaw-dropping $386.1 billion and Alibaba reached a whopping $717.3 billion in 2020.
But marketplaces can be volatile. The companies that own these platforms control everything, leaving sellers at the mercy of their rules, fees and governance, with little external recourse.
That’s why setting up shop on more than one marketplace is a no-brainer — but which ones you choose will depend entirely on your unique goals.
For example, if you sell handmade crafts, platforms like Etsy and Amazon might be a good idea. Whereas if you sell office equipment, sites like Walmart Marketplace and Amazon Business could be what you’re looking for.
Whatever the case, research the potential new sales channel’s fee structure, terms and conditions, and dispute policies to ensure you pick platforms that are compatible with your brand.
Up your brand’s trust factor
First impressions count, so your store needs to be as inviting and credible as possible in order to attract new customers.
But how do you build consumer trust on a new channel or market?
We’ve got you covered. Here are a few ideas to get you started:
- Build a strong social media following: 90% of consumers buy from stores they follow on social media. Use your social media channels to educate audiences on pain points and passions related to your products and watch your authority skyrocket.
- Use top-notch imagery and product copy: Whether you sell from your website or a marketplace, it’s crucial to invest in high-quality images and product descriptions. Make them so good customers will think about your products long after they’ve left your store.
- Use trust symbols: If you have any certifications or accreditations, now’s the time to show them off. You should also display the cards and payment processors you accept to amp up that extra credibility.
Invest in the right tools
Whether you go global or multichannel, you’ll need a great tech stack to help save time, money, and headaches along the way.
Here’s what you’ll need:
- For cross-border: If you go global, you’ll likely have stock and suppliers spread internationally. It’ll become crucial to stay informed on what’s going on in your supply chain. For this, you’ll need a platform that provides full supply chain visibility and has automatic alerts. Look for an inventory management solution that provides accurate stock predictions to ensure you capitalize on every opportunity, while preventing costly stockouts.
- For multichannel: Tasks like listing creation, channel integration and imagery migration can be a serious time-suck for multichannel eCommerce sellers. Automate these jobs with multichannel eCommerce software so you can focus on revenue-generating tasks.
- Here are a few of the best multichannel tools for eCommerce sellers:
- Sana: Unifies Enterprise Resource Planning (ERP) software with your eCommerce solutions to drive customer self service, transparency and reduced errors.
- Sellbrite: Assists sellers in efficiently listing on eCommerce marketplaces and stores.
- SolidCommerce: Manages and automates inventory control for your eCommerce channels on one platform.
- inkFrog: Designs, publishes, and syncs listings from one place for your eBay and Amazon businesses.
- CedCommerce: Customises eCommerce websites and solutions to make multi-vendor management and multichannel selling a breeze.
- Sellware: Makes tasks like multi-channel order management, stock management and product listing stress-free.
- Flieber: Synchronises sales velocity, supply-chain operations and inventory management to make inventory decisions faster and easier.
Get the right eCommerce funding
You won’t want to hit the road without checking you’ve got enough money for the journey.
Even if profits look good right now, things can change, so it’s a good idea to have external funding lined up just in case.
Here are two of our favorite types of funding solutions for growing eCommerce brands:
- Working capital funding: Allows you to make multiple withdrawals from your credit limit, and repay monthly. Terms and fees are transparent and flexible, so you can use it for virtually any kind of growth investment for your business.
- Daily advance: You get access to your daily sales early for a lump sum fee, instead of waiting for irregular payouts. The provider then collects repayments from your card takings. How much you repay will depend on your monthly sales.
With a bit of an extra cushion behind you, you’ll have the confidence and resources you need to take calculated risks when launching and growing your new stores.
Win at International and Multichannel Selling
Selling in new markets and sales channels is exciting, and can offer the chance to take your business one step closer to being the store you dreamed it would be.
But it’s no secret that managing global and multichannel eCommerce is challenging. To be successful, you need to be curious, resourceful and patient. Double check everything before you take the plunge to ensure you make the right decisions for your business, and be prepared to make mistakes.
Remember, you’re a successful seller with the experience and know-how to make your multi-market and multichannel eCommerce projects a success. Believe in your ability to make it work, and soon you’ll be living the eCommerce dream.
Want to stage your own eCommerce takeover? Discover how SellersFunding can help make your biggest goals a reality.
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