The Advantages and Disadvantages of Multichannel Selling
Multichannel selling is when a company offers a number of ways for consumers to purchase goods and services.
Multichannel selling is known to include options to sell through traditional channels such as retail stores, catalogues, and over the phone. However, with the rise of technology in recent years, nontraditional methods such electronic or mobile have become more popular over time. This could include websites, whether you’re selling on your own e-commerce store or other platforms such as Amazon and eBay, apps, and social media platforms such as Facebook.
In this blog, we discuss the advantages and disadvantages of multichannel selling for businesses so you can consider whether it’s the best option for you.
Advantages of Multichannel Selling
According to a study from Wharton, 66% of online shoppers rely on more than one channel for purchases.
In this new age of technology, consumers now like to shop across a range of channels before making a purchase. To remain successful, businesses should follow in the footsteps of their customers. Consumers wanting the best goods in the most convenient way is causing businesses to expand their business to multiple platforms.
The same consumers on new channels
Multichannel selling means you can offer customers the option to shop for your goods on other channels. Rather than having to travel to your store, they can buy from you online or perhaps in a local department or grocery store closer to their home. This way, customers can happily shop as and when they please, regardless of opening times or distance. The options are endless.
With a new channel, comes new consumers
Selling in a variety of channels will attract new customers. If you start selling on sites such as Etsy, eBay or Amazon, a whole new audience comes to light. Each channel will help expand your customer reach resulting in more attention and higher turnover.
The option of omnichannel
As stated previously, customers want the best price at the greatest convenience. They expect the ability to research and shop across multiple channels. They may even switch between channels to ensure they find a product for the most cost-effective price. Multichannel selling allows you to provide the omnichannel experience that customers truly desire.
Did you know that omnichannel shoppers are more valuable overall? According to a Google report, shoppers who cross-channel shop are worth 30% more value in a lifetime to merchants than single-channel shoppers.
Growth in Sales
The obvious advantage of multichannel selling is the opportunity to grow sales. New channels will bring in a percentage of new custom, which means you’re (possibly) doubling the sales you would make if you were to sell only in your store or on your e-commerce website. Profit is key to running a successful business so a growth in sales could never displease!
Disadvantages of Multichannel Selling
As with anything in life, even with such great advantages, disadvantages are not far behind. Although multichannel selling can increase your sales and exposure, it will come at a cost.
Shipping and Service Costs
Delivering your product to different distributors means your shipping and service costs could increase. Selling your product across one channel allows you to decrease the use of resources such as trucks, drivers and staff to deliver product and the time spent working with a number of partners.
Although rewarding, multichannel selling is complex and could become more stressful than it’s worth. For starters, you have to manage inventory, fulfil orders, and work with suppliers. Selling across multiple platforms means you to do all of this times however many extra channels you’re selling on. The management between systems can prove time-consuming.
The struggle to keep up will soon cause problems in the warehouse. Without full concentration, incorrect, slow orders can occur and stock levels could display wrong, which can lead to overselling or no stock at all.
Letting go of control
When you sell your products on multiple platforms, the control over your brand message is limited. Retailers simply want to sell your product without any added effort, after all, they have their own values to maintain! Making requests on things such as not wanting your product next to competitors could be out of the question, retailers will go with whatever decision benefits their brand.
Increased Sales Costs
If you expand your business from retail store to online sales, you will need to hire warehouse staff to fulfil orders, buy software to take and process orders and pay to advertise your new venture. Similar to selling on Amazon or eBay, these sites take a percentage of the sales you make, and the more services you take with them to market or fulfil your orders, the more they will want.
Ultimately there are pros and cons to multichannel selling and you must think carefully about which option is best for your business in the long run.