Where is the gold in E-commerce?

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There is a very common misconception when it comes for companies to decide about how to approach E-commerce.

I am referring to companies that sell through store based retailers. Think Nike, as an example.

Right now, many of these companies are still experimenting and trying to find the right approach to E-commerce.

Typically, the first thing they try to address is how to sell directly to consumers through their own online shop. This is the most common way management look at E-commerce in such companies.

Here is the big misconception: whatever you’ll manage to sell online through your own online shop, it will never be as much as what you could sell through online retailers (a.k.a. e-tailers). This aspect is very often overlooked.

My take is that out of your 100% of online potential sales, e-tailers will account for at least 90% of the total, not less.

Where should you put your focus on then?

The route to market for these companies should start from understanding consumer behaviors online.

Where do your category buyers find information online? Where are they already buying? Which e-tailers are dominating sales in your category?

From here you can start designing your route to market.

Competing with the Amazons of the world for traffic, marketing, fulfillment or customer service capabilities is very tough, to say the least.

You better make these e-tailers part of your route to market. You better master internally how to sell through them. You better stop avoiding them.

It’s not late.

Nike has just announced that it will start selling on Amazon, directly (full control of brand, prices and fulfillment).

What about selling through your own website?

As a consumer, on your own website I expect to get to know better who you are as a brand. And learn about your offerings. And yes, to buy any of your products right from your website. Or, after learning from you, to buy somewhere else online if I find better prices. And that’s just right.

The gold in the E-commerce world is to be found in the wider reach and sales you can get for your brand through e-tailers. Where the vast majority of your category buyers are shopping online.

What do you think?

Photo by Brook Ward