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How to mitigate the risks of multi-channel online sales

As an e-commerce merchant, you have undoubtedly heard about the benefits of multi-channel selling, including exposure to more customers and better brand recognition. Additionally, selling on multiple channels will also help you to circumvent risks of selling on a single channel, such as your website going down or your seller account being shut down by Amazon.

However, without understanding the risks of multi-channel ecommerce, you can lose a significant amount of time, money, and customers, as you add new channels to your business.

To help you prepare for expanding your business to multi-channel sales, we interviewed three successful e-commerce merchants who sell on multiple ecommerce channels.

How three e-commerce merchants are navigating multi-channel online sales

Automating QuickBooks data entry as new sales Channels were added

Joseph Petruziello sells hand-made candles on his website through WooCommerce, as well as on Shopify and Amazon.

According to Joseph, keeping track of the different merchant fees on the different channels was one of the biggest challenges of expanding to multiple sales channels: “When making business decisions, I had to keep in mind that my cost of goods sold (COGS) was different on different sales channels.”

As Petruziello added new selling channels to his business, he had to find a way to automate the process of getting his orders from his online store to QuickBooks®. “Keeping the books up-to-date was challenging enough with just one site. It would be impossible to do all the data entry manually for multiple sites.”

Joseph also emphasized the importance of excellent customer service and responding to customer reviews on all selling channels. “One bad review can damage multiple customer relationships. We get emails all the time now about how satisfied they are with our customers service.”

By keeping track of his fees on different channels, automating data entry into QuickBooks, and responding to all customers in a timely manner, Joseph has been able to grow a profitable e-commerce business and expand to new product lines and selling channels.

Timely order management and fulfillment

Rafael Bildirici sells a variety of physical goods – from electronics to beauty products – on Amazon, eBay, and Walmart. While growing his business, Rafael’s main challenge was order management and making sure all his orders from the different channels were fulfilled on time.

“Syncing orders into QuickBooks, and setting up customers the right way, was challenging at the beginning, as we scaled. Things got much easier once we automated these processes.”

Rafael also noticed that profits were different from different channels. “I had to keep track of all my fees from different channels, so that I knew how much money I had to buy inventory. If I wasn’t confident in my reporting, I wouldn’t be able to stay in business.”

Overselling and inventory management present another challenge for merchants who sell the same items on multiple channels. Rafael uses ShipStation to not only consolidate all of his shipping into one platform, but also keep track of shipping fees and inventory. “Putting all orders from all of the marketplace into one shipping tool has really simplified things for us.”

Finally, Rafael also recognizes the importance of responding to customer reviews. “Dealing with negative reviews is one of the hardest things. You can’t make everyone happy. It is much easier if you accept that you will get some negative reviews. Sometimes, you just need to give them a refund and move on.”

Rafael has been in business for more than five years now, and the keys to his success included having the right tools to automate as he scaled, keeping QuickBooks up-to-date so he could track cash flow, and managing his online inventory to prevent overselling and refunds.

The importance of reliable reporting for profitability

Joseph Policastri sells personal care products on his website, Amazon, and eBay, with most of his sales coming from Amazon. “It’s difficult to beat the prices on Amazon. If you want to sell on your website, you need to have your own brand, a private label,” he said.

Knowing his numbers has been key to staying profitable. Before he lists any product for sale on Amazon, Joseph uses a software that spiders through similar product listings to find out which ones would be the most profitable. “For each product I sell, I look at how many people are selling it, and whether Amazon is selling it. The software is an additional cost, but it helps me eliminate listings that wouldn’t be profitable.”

As profits for personal care items on Amazon are low (a few dollars per sale), Joseph chooses to list items that will likely sell at a high volume. He also diligently keeps track of merchant fees and shipping fees on a spreadsheet, which are different for each item.

“When you start out, it is important to get discounts from distributors so you can price competitively. You will probably lose money at the beginning, but that’s just part of process. The most important thing is to choose a product that will likely sell at high volume and good profit.”

Joseph also has to take into consideration the cost of inventory when Amazon shuts one of his listings down. “These things happen all the time. We just stay on top things, and make sure that we know our numbers to remain profitable.”

Although the bulk of his sales are from Amazon now, Joseph still has an online store on his own website. “The website helps us to build credibility with our distributors. Having a good relationship with distributors is really important in this business.”

Automating data entry into QuickBooks has also been key to ensuring that Joseph stayed profitable despite low profit margins. “Prices on Amazon can fluctuate daily and unexpectedly. It is really important for us to automate as much as possible with QuickBooks, so we can see which products are profitable.”

Steps to take moving forward

While selling on multiple channels will help you to market your products to a wider audience, there is additional complexity that you need to consider before expanding to new sales channels.

According to the three successful e-commerce merchants we interviewed, the following strategies will help you to simplify the process, delight customers, and stay profitable, as you add new selling channels to your business:

  • Implement a system to track merchant fees on each individual channel, in order to evaluate profitability.
  • Use a shipping platform, such as ShipStation, to consolidate shipping from all your channels.
  • Implement online inventory management tools to prevent overselling and refunds.
  • Monitor competitor’s prices on different channels, and price products accordingly.
  • Provide excellent customer service, and respond to reviews on all of your channels.
  • Establish good relationships with distributors to have sufficient inventory on hand, and keep your prices competitive
  • Automate data entry into QuickBooks to save time, manage orders, track cash flow, map sales tax, and evaluate profitability.

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