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Tips For Launching A Successful Multi-Vendor Ecommerce Marketplace

Today, you can buy and sell anything online. Amazon is one of the best examples of an online platform where you can buy and sell both physical and digital products. Inarguably, digitization is the superpower behind this on-going trend.

According to BrizFeel’s 2018 research report, 57% of people prefer to shop online. There are several reasons why people prefer online shopping over the offline option, some of which include price transparency, better customer service, and convenience of ordering.

For the aspiring entrepreneurs who are still dreaming of becoming a successful entrepreneur in the ecommerce industry, building an online multi-vendor marketplace is a profitable and prominent business idea. The idea is even more lucrative if you don’t manufacture any special and unique goods.

The unprecedented success of multi-vendor marketplaces such as Amazon, eBay, and Alibaba isn’t hidden from anyone. According to Internet Retailer’s report, the sales on these multi-vendor marketplaces accounted for 52% of global online retail sales in 2018.

However, starting a multi-vendor ecommerce marketplace is not a walk in the park. Entrepreneurs face two major challenges when building a multi-vendor marketplace—1) when finding a cost-effective platform and 2) when figuring out ways to attract vendors to their marketplace. I will discuss in detail about the two challenges in the later part of this post.

First, let’s understand how a multi-vendor marketplace business model is better than a single-vendor ecommerce store model.

Benefits of A Multi-Vendor Marketplace Over A Single-Vendor Store

What are the benefits to the Marketplace Owner?

  • No inventory management headache
  • Plenty of sellers with different products
  • Large customer base
  • Commission on each product’s sale

What are the benefits to Sellers?

  • Personal dashboard for each seller
  • No web-store setup cost
  • No headache of marketing
  • Wider target audience means more sales

What are the benefits to Customers?

  • Variety of products from different sellers
  • Purchases at competitive prices with comparison of products’ pricing at different sellers
  • Better shopping experience
  • Improved customer service

Types of Multi-Vendor Marketplaces

B2B Online Marketplaces

On B2B online marketplaces, businesses sell their products or services to other businesses at wholesale price.  Alibaba is a reputable B2B marketplace.

B2C Online Marketplaces

Amazon, Flipkart, and MakeMyTrip are a few of the well-known examples of B2C online marketplaces. On B2C marketplaces, sellers from different industries or regions sell their products or services across demographics.

C2C Ecommerce Marketplaces

C2C marketplaces are those where customers sell directly to other customers. OLX is one of the best examples in this category.

Horizontal Marketplaces

Horizontal marketplaces can be B2B or B2C. On a horizontal marketplace, you can find products under different categories from different sellers. Amazon is one among the best examples of a horizontal marketplace.

Vertical Marketplaces

Vertical marketplaces can also be B2B or B2C but on these kinds of marketplaces, you will find a specific category of products from a particular seller.  The audience size on vertical marketplaces is narrower as compared to that on horizontal marketplaces. Uber & Airbnb fall under the category of a vertical marketplace.

Revenue Models for Multi-Vendor Marketplaces

One question that every multi-vendor marketplace owner asks is, “How will I earn money?”

Therefore, I’ve listed below the best possible revenue generation channels for a multi-vendor ecommerce marketplace:

Subscription

You can charge a monthly or yearly subscription fee from sellers to sell on your marketplace.

Feature Products

You can charge a certain fee from sellers who are interested in featuring their services or products on the home page of your website.

Commission

Amazon or Flipkart use this revenue model. It helps you earn commission on every product sale from a seller.

Sell Your Own Products

Again as Amazon and Flipkart do, you can start selling your own products at your marketplace.

Advertisement Channels

Apart from the above, you can earn big bucks by adopting different advertising methods such as Affiliate Products, Banner Ads, and Adsense Ads.

How to Start a Multi-Vendor Marketplace?

Once you find your ecommerce business niche, the next step is to build the online marketplace.

There are many tested solutions in the market for starting a multi-vendor marketplace. If you have time, money, & sound technical understanding, you can hire a web design and development company to build your online marketplace.

However, many startups and entrepreneurs prefer to choose a ready-to-launch multi-vendor marketplace platform instead of hiring a custom web development company. Readymade marketplace solutions are a cost-effective, scalable, and easy to use option, especially for those who don’t have time to deal with programming and technical matters.

YoKart is one of the best multi-vendor marketplace platforms that provide a number of built-in features while ensuring great flexibility. Among all the readymade multi-vendor ecommerce platforms, YoKart is the most cost-effective marketplace solution. Before making a final call, you must choose to try a demo.

Basic Features of a Multi-Vendor Marketplace

  • Order tracking
  • Single page checkout
  • Coupons/ discounts
  • Multiple payment options
  • Mobile apps
  • Location-based search
  • Reviews & ratings
  • Import & export (for sellers)
  • Vendor dashboard
  • Product catalog (for sellers & Admin)
  • Analytic & reporting
  • Multiple administrative accesses

Note: The feature list can be expanded as per a business’s requirements.

How to Attract Vendors to Your Multi-Vendor Marketplace:

Once you have launched your ecommerce marketplace successfully, another big challenge is how to attract vendors to your multi-vendor marketplace.  I am sharing a few quick tips that will certainly help you to get more vendors on your marketplace:

  • First, run surveys through online polls or go to the market yourself to understand sellers’ pain points in the traditional market.
  • Share your business idea with sellers. Help them understand how your web platform can solve their problems.
  • Show them the other benefits such as wider audience reach and increased sales.
  • Start running social media or email marketing campaigns to approach sellers who are already associated with other web platforms. Highlight to them the benefits of selling on your ecommerce marketplace.
  • Conduct training sessions to make the sellers aware about your marketplace features.
  • Offer zero subscription or commission charges in early days.
  • Share your sellers’ success stories on different platforms to encourage other sellers to partner with you.
  • Try other offline marketing techniques like distributing pamphlets, investing in hoarding ads, and attending trade fairs to build relations with other merchants.

If you have any other tips to share, write to us in the comments section.

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AOV vs. LTV: Why Customer Lifetime Value Matters More Than You Think

a few months ago

There’s no question that most marketing techniques are focused on making sales larger and more frequent. Offering free shipping increases sales, bundling boosts order size, and ad retargeting brings your eCommerce audience back into the fold.

These are all great marketing tactics, and they work toward the same goal. But there’s one eCommerce metric that often goes unaddressed in marketing and sales: increasing the lifetime value of your customer.

The lifetime value (LTV) of a customer often goes overlooked because it is more complicated to incorporate into eCommerce metrics. But it is well worth your time, since LTV can better account for your long term profitability.

Short Term Boost of Revenue or a Long Term Boost of Profitability?

Average Order Value, or AOV, is the average amount of an individual customer order in your eCommerce store. In contrast, Customer Lifetime Value, or LTV, is a measure of the revenue or profit generated by a single customer over the course of their lifetime with your company. Gross LTV refers to the revenue from a single customer over their lifetime, while net LTV measures the profit earned from during that lifetime.

AOV is important because the higher your AOV is, the less effort you need to spend on finding new customers. You need fewer customers overall to make the same amount of profit. However, focusing solely on AOV can be a mistake since it gives a picture of short term revenue rathre than a long term boost of profitability.

LTV is important for eCommerce brands because it determines the worth of a customer over time rather than the worth of an individual purchase or interaction.

Companies with high customer LTVs need fewer customers to make a profit. This can help determine how much money can be spent on marketing geared towards new customers, as you’ll know how much they’re worth long term.

You’re more than likely already well versed in optimizing your storefront and marketing to boost AOV. But what can you do to maximize LTV?

8 Ways to Maximize LTV for Your eCommerce Brand

Make brand loyalty a primary business goal

If you start with the question “How can we keep customers coming back?” the potential answers will span marketing, sales, customer service and everything in between.

Make marketing channels more efficient

You don’t want your marketing efforts to feel like marketing to current customers. But that doesn’t mean they shouldn’t efficiently bring customers further down the funnel. Any marketing efforts should add value to customer interactions with your brand — birthday wishes and special offers in a targeted drip campaign comes to mind.

Make customer feedback a closed loop

Even negative reviews can lead to better ratings if they are handled correctly. Take the time to respond to reviews, find ways to make it right with dissatisfied customers, and incorporate feedback into your processes and products.

Make personalization a key part of your martech

Personalization is all about making the customer feel known and understood — by design, this keeps them coming back. If you don’t already have the tools in place to deliver personalized landing pages, drip emails and special offers that’s your first step.

Make customer service a business pillar

According to a recent survey, nearly 90 percent of companies expected to compete primarily on the basis of customer service. Customer experience is the new marketing. Your business with a customer isn’t done once they checkout — you need to continually show them why they should come back.

Make customer transactions easy

An easy checkout process will help increase AOV and an easy account creation process should increase LTV, as it gives you a foot in the door for returning customers. It’s as simple as that.

Make use of your customer data

 From how far down the funnel they make it to demographics, you have customer data at your fingertips. You should bring all of this together on a customer data platform to realize the benefits of acting on data in real time will offer your eCommerce brand. On the other side of the same coin, you should be using data analysis and big data to assess how each tweak you make — from paid campaigns to personalization — affects your profitability.

Make an investment in high quality content

 If you’re paying for SEO content on your website, you’re probably hoping to increase page clicks and views. But if you’re doing SEO writing well, you’re also creating a wealth of high-quality content related to the products and services you provide. If readers are coming to your site for accurate and in-depth information, they’ll also come to your site for products and services that they trust.

AOV and LTV is not necessarily an either/or conversation for eCommerce brands. The real question is which you should be using at any given time or to make any given decision. Both metrics have their time and place in most companies.

 

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4 Challenges Entrepreneurs Face With Their Ecommerce Store

a few months ago

Hardly a decade ago, the go-to way to get your hands on something you needed was to get out of the house, travel to the outlet that sold the thing you wanted, pay for it, and bring it back home. Simple. Though doing so required time and effort on the part of the consumer, it also meant that the person would get the benefit of first-hand witnessing the product they were paying for before the transaction occurred. Knowing what you were buying meant fewer chances of you having to return it, getting the exact thing that you ordered, and no shipping costs. All in all, the shopping experience was easy with minimal complications.

Today ecommerce dominates the shopping landscape, with millions of people across the world buying many of their goods online. This has led to a huge increase in digital entrepreneurs but it hasn’t come without challenges for ecommerce store owners. In this article, I first provide a bit of backstory before explaining the four main challenges entrepreneurs face with their ecommerce store.

Shopping trends are changing

The fast-paced lifestyle of today doesn’t gel well with the idea of going out and seeing what they like to buy. This factor and the advancement in information technology collaborated to a new trend of online shopping. The number one reason why people opted for online shopping is that they can shop at any time of the day! This allowed people to order, pay for, and have their products shipped to their doorstep, all at the expense of a few clicks on the keyboard. Life became much easier for the consumer.

The fiery growth of ecommerce

In 2017, 1.66 billion people shopped online at least once. By 2021, the number is expected to exceed 2.14 billion. The online shopping trend bloomed to such an extent that today, there are hundreds of new businesses being introduced every day. It does not matter how unusual or rare the product of your need is – in the massive world of ecommerce; you are sure to find at least a few different companies that sell what you need. These days if you have an internet connection, a device to access it, and the means to pay for the commodity you want, there is nothing that stands in the way of what you want. This is a direct result of the ease there is in setting up an online business today. Without investing a hefty capital, you can now set up a store online and start doing business in no time.

The numerous opportunities are accompanied with as many challenges

Though setting up the business became easier than ever, running an online store did not come without a plethora of challenges. As of today, 90% of new online startups fail before it has been 120 days since they started. Entrepreneurs enter the business thinking that now that they have accomplished setting up a store, the rest will be a joyride. However, the fact remains that the true challenges of owning a business start after its conception. Let us explore a few challenges that you should expect should you plan to start your own ecommerce store.

1st Challenge: Leaving the page with a full cart without making the purchase

This is something we all are guilty of. More often than we make a purchase, we surf online stores and pick out what we like just to close the tab without paying for it in the end. It usually happens when even though we are attracted to the commodities they offer, we have second thoughts about them or find that their policies are not up to our alley. However, if an ecommerce store is facing regular cart abandonment, it is wise that they review their checkout process. To maximize the number of purchases, a business should make the checkout process as easy and quick as possible, before the customer has time to rethink about his purchase.

2nd Challenge: The low number of visitors on your website

With the increase in the intensity of competition, many small and medium-sized businesses get pushed down and ignored because they lack the capital for adequate advertising. This substantially reduces the website traffic for these unfortunate entities and hence result in low revenues. Soon after, the business begins to generate insufficient profit to keep itself afloat and starts edging towards bankruptcy. It is not long that an ecommerce store will die out after being ignored by the consumers. To overcome this problem, it is important to invest in a marketing team that comes up with creative and inexpensive ways to get the word out about your website. This can be achieved with SEO, pay-per-click, or social media marketing.

3rd Challenge: Making personal connections with customers without face-to-face contact

The importance of a good customer-client relationship to succeed at your business is not hidden from anyone. Unsurprisingly, it is more difficult to build a relationship with your customer being an online entity than it is being a physical outlet. After all, how much of interaction can you have while being separated by a screen? However, this does not mean that you can ignore this aspect of running a business. In fact, good customer service can prove to be an excellent marketing technique.

For an online entity, a good relationship starts with being perfectly honest in your dealings. It is wise to put up accurate and real-life pictures of your product, with as little edition as possible. Accompany these pictures with an accurate description of the product to win the trust of your potential customers. Ensure that your policies are clearly mentioned on your website. Offering customizable goods can also bode well for business. For example, if you have an online leather jacket store, offering customized designs help your customers feel closer to you.

4th Challenge: The potential for internet fraud and identity theft

It goes without saying that with online transactions, comes the risk of financial scams. One of the most popular ways to cheat you out of your money is by hackers stealing another person’s identity and placing an order on their behalf. A quick way to reduce the chances of this happening is by asking your customer to provide a valid identity proof. Asking for a valid email address and sending out a verification email to ensure the person who placed the order is real works very well to minimize the occurrence of these situations.

Ecommerce is a trillion-dollar industry and one that has lots of entry points for entrepreneurs. While there are plenty of challenges faced by online business owners, if you can overcome them, and make improvements to your ecommerce site, you can create a profitable company with the potential for global appeal.

Author Bio: About Ashley Rosa: Ashley Rosa is a freelance writer and blogger. As writing is her passion that why she loves to write articles related to the latest trends in technology and sometimes on health-tech as well.  She is crazy about chocolates. You can find her on twitter: @ashrosa2.

 

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5 Techniques to Get Repeat Customers For Your Business

a few months ago

Repeat customers are the most profitable customers. They spend more per sale and offer the best ROI on advertising spend. However, the stats show a meagre 27% of initial sales develop into repeat customers.

Businesses need to focus on building brand loyalty.

Consumers remember the feelings they associate with a company, even if they forget the logo or brand name. Apart from the basics of providing a quality product, the right marketing and branding can help you develop a strong base of loyal customers for your business.

By following the 5 tips below, you can cut down on churn and turn casual buyers into loyal customers that connect with your brand and keep coming back for more.

1. Engage and Interact

Customers that feel listened to are happy customers happy customers are loyal customers.

Interacting with your customers is a great way to stay in their thinking and build a relationship. A good old fashioned thank you, holiday wishes, and birthday greetings can go a long way.

The problem for the majority of businesses when interacting with their customers? Poor customer service.

Improving customer service is one of the most critical areas for increasing customer retention, especially on social media. Despite 65% of Twitter users expecting a company to respond to them within 2 hours, 70% of people that reach out to a business on social media don’t receive any response at all.

Make sure your customer service is responsive and on point, particularly on social media.

2. Be Consistent

Your customers want your brand to feel the same to them throughout every interaction. Consistency is crucial in building brand loyalty.

Fast food chain McDonald’s is one of the most successful brands ever. This success has been built on consistency –  going to a McDonald’s in Kuala Lumpur feels the same as a McDonald’s in Kentucky.

Your brand should have a solid consistency too. Your logo, tone of voice, and design choices should be the same on all digital and social media platforms.

3. Make Your Business Easy to Identity

Pick the product or service you do best and promote that to your customers – what kind of company are you?

The more easily identifiable you are, the more likely people are to remember you and your product. Trying to please everyone and promoting a mass of products and services can leave you making little impression at all.

You need your customers to understand what you do and the problems you can solve for them. That means focusing in on the thing you do best. Nike produces a lot of different sportswear products and clothing. But when you hear the name Nike, you think of trainers. They’re the company that makes trainers. What does your company do?

4. Referral Programs

One of the most rewarding benefits of repeat customers is that they can become great word of mouth ambassadors for your company. While it’s fantastic when this happens without any of your input, you can encourage it by creating a referral program.

Uber has seen great success with their program that rewards original customers with credit for providing a referral and the new customer with a discount. Uber’s strategy encourages new customers, rewards loyal existing customers, and provides everyone an incentive to use their service. Reward your loyal customers and you’ll increase your chances of retaining them for as long as possible.

5. Give Away Freebies

Staying in the minds of your customers is crucial to gaining repeat business. That’s why it’s so important to be easily identifiable and also why companies invest so much in promotional materials that they give away to customers.

This can mean both a physical gift or through the free valuable content that you post on your blog or send in your newsletter. Providing content that is useful and interesting to your customers positions your company as knowledgeable and trustworthy, while also keeping you at the top of the mind of your customers. The note-taking App Evernote has seen great customer retention through posting blog content that is valuable to their customers and aligns with the product they sell.

Conclusion

While offering freebies can help keep you in the mind of customers and a referral program can actively encourage customers to promote your business, creating a loyal customer base doesn’t happen overnight. Engaging with your customers, being consistent with your branding, and being easily identifiable are the building blocks for creating a community of loyal customers around your business.

By applying the above tips, you’ll be on your way to gaining a loyal customer base that consistently chooses you over your competition.

Author bio: George Drennan is a writer on all things e-commerce and the founder of Eagle Content, a UK based copywriting company that helps brands and businesses connect with their clients.

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