Diversification is an important factor in the growth of any business, in any industry. Your product may be selling now but if you are not looking for ways to do more, and sell more, you run the risk of losing it all.
Successful high-volume e-commerce sellers know this to be true and make significant efforts to diversify their business and ensure their longevity in the face of so much uncertainty.
Why You Need To Diversify Your Business
The online marketplace is constantly changing. New competitors and new products pop up everyday that can threaten your stability. The only way to keep pace with these changes is to be flexible yourself. If you are putting all of your efforts into one particular product, audience, sales channel or ad campaign, you are missing opportunities to grow in other places.
Focusing on one area alone puts a lot of pressure on that area. If it were to suddenly fail to convert, you are in a lot of trouble. Diversification helps protect you from this potentially terrifying disaster.
Diversifying your business forces you to step outside of what is already working for you to find other things that will also work. It is the smartest way to stay relevant in a crowded space.
Here are some of the things high-volume sellers do to diversify their business and significantly boost the growth of their brand as well as their profit margins.
#1 - Use Other Online Marketplaces
It is important to diversify the places in which you sell your products and services. When you sell in one place, you are only hitting one part of your potential market. The internet is a big place and it’s not a bad idea to expand and grow your audience.
Amazon, for example, is one of the smartest places to sell online but it is far from the only place. With over 300 million active monthly users, it makes complete sense to list your product on Amazon and spend time and other resources developing that listing. But when you concentrate all of your efforts in that one direction, you are putting yourself at the mercy of other people. Amazon not only will you have to comply with Amazon’s strict rules, you’ll have to keep an eye on your competitors to avoid being undersold. If you are operating in other spaces as well, it can lessen these concerns.
The other marketplaces you choose will depend on your product. If you are reselling a recognizable brand, eBay maybe a good place for you. Or if you sell handcrafted items that are made to order, try a place like Etsy. Selling electronics? Try NewEgg. With a little bit of searching and market research, you can find other spaces where your offerings may thrive.
When you establish yourself on other sales channels, it is important that you spend enough time with each one. You may be making the bulk of your money with Amazon but do not focus on it alone. If you take the time to tend to the other listings, you can grow their returns as well.
Be sure to differentiate your listings across the channels. Each marketplace has a different shopping persona. Amazon shoppers like to see low prices but will pay more for convenient delivery whereas eBay shoppers are also looking for low prices but typically search for brands they already know. When you know who the shoppers are, you can tailor your listing to target their needs. Using the same titles and descriptions can hurt you in a Google search as well. Google will return the most popular page first and decrease the page rank on the others. Your Amazon listing will usually be the most popular page. If you have different language in your listings, you are more likely to have multiple hits appear in a search.
#2 - Develop Your Own Store
Developing your own online store is another way to diversify your sales options.
When you list your product in online marketplaces, you have to adhere to the rules or face the consequences. The rules exist to provide a level playing field but sometimes they are difficult to navigate and can feel counterproductive. If you have your own online store, you do not have to worry about any of this. You have complete control.
With your own site, you have the ability to create the experience you want your user to have. You can offer discounts when and how you’d like without any fear that someone is going to come in and undercut your price or undermine your product.
It is a lot of responsibility to create your own store. It means paying attention to every detail from shipping and distribution to accounting. When and if something goes wrong, or your the site goes down, it is on you to fix. But these are minor concerns when you look at the big picture. Your own store allows you to better define your brand and your market.
There are many platforms that can help you easily create your own store. With Shopify, you can build a beautiful looking store right inside their platform. If you have a website with Wordpress, look at their available plugins for ways to commodify your current space. There are many online tools and services available to help you get your e-commerce store up and running. Do not be afraid to use them.
#3 - Develop Related Products
Expanding your product line is one of the most obvious, and potentially lucrative, ways to diversify your business.
If you can source or create new products that are related to your current products, you have a real opportunity to grow your brand. Give customers a reason to come back to you when they are looking to spend money. Give them more than you already are.
Maybe you’ve established yourself as a go-to source for bedding. Try adding matching towels and showers curtains, maybe drapes.
Happy customers who have purchased from you in the past, are more likely to do it again in the future.
You already know they are interested in home decor, why not give them more options?
And, more product options increases your audience. In the past, people may have only found your store or listing when looking for duvet covers, now others may find it by looking for quality hand towels. You have increased the number of avenues people can take to discover your business.
Depending on the products you sell, it might be wise to create different versions of your particular product. You can have a “professional” version that is the most expensive and comes with all conceivable bells and whistles, and a cheaper version, with fewer features that may appeal to the more casual user. This opens your product to wider range of shoppers because it will appeal to a wider range of budgets. And doing this may even boost the popularity of the more expensive model. There is an entire population of people who may not have the expertise or the need for the top of the line model, but they will buy it anyway because they want to have the top of the line model. Giving them similar products to compare, both of which are yours, increases the chances that they will buy one of them.
Creating more products for your store, decreases the pressure on any one item to keep your business afloat.
#4 - Utilize Marketing Data
When you utilize available marketing data, you can clearly define your target audience. Examine spending habits, shopper personas, customer reviews and conduct online surveys or polls on social media. Knowing who you want to sell to will help you target your advertising but it may also do something else: diversify your audience. It seems counter-intuitive that narrowly defining your target can open you to a wider group, but it can. It is only through defining your market niche that you may come across different but overlapping niches, where you product can also sell.
When you have the data in front of you, you can find creative ways to diversify your advertising campaigns. For each audience that you define, you should alter your ads. Each one will be looking for something slightly different in your product, if you highlight those differences for each group, you’re more likely to make a sale than you would if you were running a generic ad, for a generic audience. You won’t want to stray too far from your brand messaging but you can alter the language to reach these new customer bases.
Diversifying your e-commerce business is an ideal way to grow your brand and secure your longevity in a shifting marketplace. Being a successful seller on one channel is an amazing feat but to become a high-volume, high-earning seller, you need to step outside of that one channel. By diversifying your sales channels, your product, and/or your target audience, your business will find itself in a position to be truly successful in the crowded and competitive world of e-commerce.
This is a guest post by Andrew Maff, Director of Marketing and Operations for Seller’s Choice, a full-service digital marketing agency for e-commerce sellers. Seller’s Choice provides uniquely personalized marketing and managed services for digital marketplace sellers, e-commerce merchants, and brand builders worldwide. You can learn more by emailing email@example.com or visiting here.