On today’s episode we are going to explore off-amazon e-commerce sales channels such as Ebay, Etsy, Jet, & Walmart. We will go through the pros and cons of these various sales channels and tell you what is working in Ken and I’s businesses. We will also be discussing certain milestones that we recommend you hit before considering diversifying to sales channels off of Amazon and some best practices to consider while making the transition.
If your brand sucks on Amazon, it’s going to suck on eBay. If you’re not profitable on Amazon, you’re not gonna be profitable on eBay. If people don’t like your products on Amazon, not gonna like your products on eBay, or Walmart. So these different sales channels are not going to save your company. You also need to realize that after you do this for a couple years, you’re going to know way more. And that maybe starting second brand is in all the mistakes that you made with brand number one, you’re not going to make the brand number two.
Welcome everyone to the www.firingtheman.com podcast a show for anyone who wants to be their own boss. If you sit in a cubicle every day and know you were capable more then join us this show will help you build a business and grow your passive income stream in just a few short hours per day.
And now your host serial entrepreneurs David Schomer and Ken Wilson. Welcome everyone to the www.firingtheman.com podcast On today’s episode we’re going to explore off Amazon ecommerce sales channels such as eBay, Etsy, Jet and Walmart. We will go through the pros and cons of each of these various sales channels and tell you what is working in canonize businesses. We will also be discussing certain milestones that we recommend you hit before considering diversifying to sales channels off of Amazon, and some best practices to consider while making the transition. Be sure to stay tuned for a strategy which uses an online tool to help automate this process and prevent this initiative from being a giant time suck. So Ken, welcome.
Thank you, David. Excellent to be here. I’m excited. This is a this this show is going to deliver tons of value. So now David, I know you’ve been selling on several off Amazon sales channels for for a while now. And I’ve added a bunch new ones this year. Why have you done this and what results are you seeing in your business as a result of the diversification?
Yep, So I would say My story starts on Amazon. About four years ago, I started my own Amazon sales channel. And then I created my own website. And so that’s kind of where I started. In pro tip, if you’re going to build your own website, check out the episode 23 of the www.firingtheman.com podcast, a beginner’s guide to building your own e commerce website. But anyway, not to deviate too far. Then I started selling on Etsy and I’ll go into Etsy and why I chose that and I’ve also been on Groupon. I didn’t really like Groupon and ended up they ended up canceling my account which it is what it is. So I’m no longer on Groupon, but this year, I’ve added eBay and Walmart and I plan on adding jet.com. And so, you know, the reason I’ve done this is to diversify. I mean, that’s I don’t want all of my eggs in one basket. And so, you know, Amazon is the king of e commerce. They own 40% of all ecommerce traffic, and, and that’s awesome. You know, I would compare it to if you close your eyes and think of a mall, think of how big the mall would have to be to capture all the people on Amazon right now. You know, as we record this episode, it would be massive big mall. Absolutely. And so they’re the number one leader. And so I do think that it’s a logical place to start, however, you hear about Amazon accounts getting shut down, you know, temporarily or permanently. And, you know, in Facebook groups and in meetups, I’ve heard of people getting their account shut down. For issues that don’t seem like that big of a deal. It wasn’t like they were out exploiting Amazon customers or using blackhat strategies. It was for, you know, honest and simple mistakes and all my pencils have erasers, and I make honest mistakes. And so I think that I don’t want to have 100% My revenue coming in from Amazon. And so that’s one of the reasons that I have I’ve pursued this diversification. Another reason that I have diversified off of Amazon is the process that you follow to get your Amazon listing up and going you you take really good pictures, you have a really good title you have the description in search terms that are are keyword optimized, in I would say there’s a lot of heavy lifting that goes on there not to mention sourcing really good product. But if you have a really good product, you have really good pictures, you have a really good description. I think it makes sense to take that and take it off of Amazon, you know, I this month have been working on setting up my eBay listings. And guess what, you have a title, you have a description, you have a spot for photos, you know, setting it up, most of the heavy lifting has already been done. And so that’s one thing that I’ve learned in one thing I’d recommend to the listener is get things dialed in on it. on and do that first. You know, I got onto Etsy probably too early. And so anytime I change a title or I get better photos or a new infographic, I end up having to change it on Amazon and then go over to my Etsy page and change it. And it’s just kind of a manual process that I could do without. But I do think getting things dialed in on Amazon is is the right thing to do.
So what you’re saying, David is once you have everything dialed in on Amazon, going to these extra sales channels is kind of low hanging fruit.
Yeah, absolutely. Absolutely. That dovetails really nicely into my fourth point is not everybody hangs out on Amazon. I like Amazon. I have the amazon shopping app. I also have an Amazon Prime credit card. And so when I’m shopping online, Amazon’s the spot to go. But there are some people that got on the eBay train back in the 90s. And they haven’t got off when they want something online. They go to eBay. And so I think you see people that that get stuck in a rut. And in that rut, maybe eBay that rut maybe Walmart.com. And so just because I like Amazon doesn’t mean that everybody likes Amazon. And so, you know, once I’ve identified my target market on Amazon, there’s a good chance that some of that target market also exists on eBay also exists on Walmart.com or jet.com, you know, some of these alternative sales channels. And so those are some reasons that I have diversified.
Nice after listening to those reasons for diversifying off of Amazon sounds great. What are your blind spots? And what are some downsides in doing this?
Yeah, so I did lay out all the pros of this. But I will say it comes with an equal amount of cons and I’ll kind of go through these. Typically, we’ll just use my business as an example. 90% of all of my sales come from my Amazon sales channel. And I would say when I talked to some higher level sellers and masterminds and stuff, that seems to be the case with them. Some people have ramped up their Shopify websites, and they’re doing more business there. But generally, the sales channels don’t take up a large portion of the revenue pie. And so, you know, we’ve talked on previous episodes about the 80/20 rule, right? 80% of your output comes from 20% of your input. And so, you know, when I talk about getting Amazon dialed in, that’s what I’m talking about. And when you start focusing on eBay or Walmart, know that not many, not as many people are shopping there, it’s it’s a smaller piece of the pie. And so, this goes against the grain of the 80/20 rule. And I think you should know that from the onset, in that, you know, if you’re getting 100 sales per day on Amazon, you know, you make it two to three sales per day on eBay. At least that’s been my experience. Now, those two to three sales per day. They’re great. They’re adding to my net income but You know, it does take a little extra time, and I may be better off focusing on Amazon and kind of doubling down there. And so I do think that this can be a time suck. And, and you should really be cognizant of that before you jump right in. You know, I’ve heard anecdotal evidence that kind of the right point to jump off and expanded into these alternative sales channels is right around that million dollar mark, high six figures up to a million, that’s when it makes sense to make the switch. Another blind spot, I would, I would say in this entire strategy would it may require more capital for inventory, so I’ll take a site like walmart.com. If you want to participate on walmart.com, you need to use a third party logistics company a 3PL and that is because they don’t accept multi channel fulfillment orders. You know, Amazon and Walmart are competitors and Walmart wants e commerce On their platform, and if you’re using multi channel fulfillment through your FBA inventory, well, that is a piece of the pie. Right? They are they are making money from your sales on Walmart. And so Walmart wants to control all of that. And so, you know, I think, important thing to talk about here. And can your business and my business are different? And tell me if you would agree with this, I would say, I have 300 base hits, in terms of my products 300 skews that are all base hits, not crazy high volumes, but they do. Okay. And when you combined the performance of all of those, that’s kind of how I, I get to my net income. You have a smaller number of high volume products. I would say you have. What would you say like 10 home runs? Yeah, probably probably 10. And so I you know, when you’re talking i think it’s it’s good to understand your business and the money of heavy lifting that it takes to take 10 listings and put them on eBay is much less than the heavy lifting involved in taking 300 skews and getting them set up on eBay. And so I think you, you ought to think about your business. And if you have a home runner, you have a triple, I think you you should be diversifying. Or you should look to this more quickly. As opposed to I will say like, eBay has taken me getting set up there is taken me probably five times longer than I thought it would. You know, that’s a general rule in business. Things are usually they take twice as long and they’re half as profitable. If you adjust your expectations to that, your life will be a lot easier. But anyway, I kind of am going off on a tangent here, but my main point was that if you want to be on walmart.com, you cannot fulfill those orders through FBA. inventory. And so, you know, if you have to double the amount of investment you have in inventory, so you can make the two to three sales per 100, Amazon sales, the juice might not be worth the squeeze.
Yeah, that would be a tough platform just to test.
Yeah, absolutely. And then the last thing I’ll say is multi channel fulfillment software, and online tools, those are expensive. And I’ll go into those towards the end of the episode, but they’re expensive. And that can be a cash strain on your business. And so, you know, if you’re spending 70 or 80 bucks a month on on a tool to fulfill 10 orders, you probably would be better off not doing it at all. You know what I mean? That eats up a lot of margin. And so, but again, I think this is something it’s a conversation that comes up in a lot of masterminds and a lot of meetups. Hey, when’s the right time to jump ship and get on eBay? Get on Etsy, or get on Walmart. And I think it’s worth worth talking about.
Yeah, absolutely. I think it’s worth testing. You know, like you mentioned, every brand and every business is different, and you won’t really know, unless you test it.
Now to circle back to your eBay, what was the, the challenges that you that you face on eBay.
So on eBay, I just wasn’t familiar with the platform. I’m very familiar with the back end of an Amazon listing, and I’ve spent a ton of time there. But their back end looks totally different. And so, you know, something as simple as like taking all of my images from my Amazon listings and uploading them, you know, I have, I have 10 pictures per product, if you count in my EBC are enhanced brand content. And so multiply that by by 300 excuse, I’m uploading 3000 pictures And there may have been a quicker way to do that. But I did it manually. And I would say to anybody, if this sounds familiar, if you have a lot of different skews, there has to be a way to upload flat files and do this in a better way. I was stubborn, I wanted to get this done. And it was kind of a mindless activity. I could listen to a podcast and just upload my pictures, you know, not really pay attention. It was just one of those mindless activities that was good to reserve for like the last two hours of the day. When your brain is fried and you don’t want to do any like difficult mental work. That’s a good one to pour yourself a drink and and chill out in your office and listen to some music or or good podcast.
Nice. Yeah, that answers my question. It was a learning curve slash lots of skus for sure. So David, you mentioned the million dollar point was kind of the point where, you know, sellers would want to hit before they diversifies or any other Other, you know, milestones?
Yeah, absolutely. So you know, I’ve talked about getting your Amazon listing totally dialed in. And I think there, you need to have a really good title, really good photos, bullet points in the description, because those are all things that are going to transfer over when you go to eBay when you go to Walmart. So I think getting those things dialed in. Now, I would say it doesn’t end there. I would encourage everybody, especially if you’re a private label seller to be brand registered. And that’s a process. You know, we’ve talked about that on previous episodes, but that was a 13 month adventure for me. Now, on the other side of being brand registered, there are a ton of benefits. And so if somebody wasn’t brand registered, and they were thinking about starting an eBay account, I would say hey, focus on your, your Brand Registry. I also, you know, in terms of conversion, and video converts, so well, and I think for a fully optimized listing You need to have video in so and that’s something that you can do yourself. That’s something that you can sub out to somebody. But I do think getting, you know, Brand Registry, enhanced brand content, having video. The other thing I’d add to this is split testing your images. We’ve talked about this on previous episodes, you and I use split Lee. And knowing what what hero image attracts the most eyeballs is super important. Because guess what, when you go over to eBay, you’re gonna have a hero image. And if you find out on Amazon, hey, this hero image converts way better. Well, that’s the one you’re going to want to lead with on eBay. So I think getting all of these things dialed in, on Amazon are some really important milestones that you need to hit or you should hit before considering. Now again, I am throwing out a lot of recommendations here. Use your own judgment, and there are exceptions to the rule. But if I was mentoring somebody, this is the advice I would give them and so this is what I am the advice I’m giving to the firing man nation.
Nice. No, I definitely agree and, you know, dial in Amazon and it just, it just basically gives you, you know, all the tools you need to expand. It’s all they’re all they’re all that, like you said earlier, all the heavy lifting has been done. And it’s low hanging fruit at that point, for sure. So David S, as we talked about off Amazon sales channels, what are your thoughts on expanding within the Amazon environment to other marketplaces?
I would say look into it, definitely look into it. You know, the United States market is the biggest on Amazon. However, the UK, they’re in second place in terms of Amazon marketplaces, in terms of size in Germany is in third place with about 20% of the size of the US in, you know, again, if you’re in North America, Canada and Mexico, it’s on the same continent, you don’t have to cross any oceans. And it probably would be, you know, from a logistic standpoint, Canada and Mexico. Those are pretty easy places to expand to, you know, Canadian listing, you don’t need to worry about trans translating anything, you know, maybe just add in a little a, at the end, shout out to all of our Canadian listeners. I love you guys. But you know, Canada’s number seven in Mexico is number 10, in terms of the size of Amazon marketplaces. And so we know that Amazon is this juggernaut, in terms of the size of Amazon is approximately the size of Switzerland. How crazy is that? I mean, it’s huge. It is huge. And so I think the reason I bring these up is there’s a lot of opportunity that exists on Amazon. And so looking into some of these other markets may be worth it. And so I would, I would encourage you to look into it. Look at keyword research. Know that you know, for instance, UK, in the UK, they’re about half the size of the US. So search volume is going to be about half. Keep that in mind, but see who’s selling in the Canadian market who’s selling in the Mexico market. Now, with that comes some complications. One currency, currency is a double edged sword. Sometimes it works in your favor, but sometimes it doesn’t. And who really knows which way currency is going to move as it relates to the translation to the US dollar. And so, also inventory, I think, expanding to another Amazon Marketplace, you’re going to have more capital investment in your Amazon inventory. Not necessarily a bad thing. But I think, look into this. This should be, you know, when we’re talking about expansion, what incremental step is going to give you the most incremental benefit. And, and I would say in some instances, expanding to the UK Maybe a better move than expanding to eBay or expanding to Walmart. And so these are just some considerations that you should be thinking about. When you’re thinking about how do I expand into new sales channels?
No, that’s, that’s a great angle on that is evaluating the different marketplaces. Even within Amazon versus eBay, Walmart, like doing a little bit of research, depending on what products you sell, they might sell better on, you know, Walmart or eBay versus Amazon UK, or like what you said those stats, you know, maybe, you know, if the UK is 20%, the size of the US in terms of sales at sound, that’s a that’s a pretty good chunk. Right? So it sounds like maybe testing that out, versus Walmart or eBay might be better,
for sure. And one other thing I’d add to that is, where are where do your customers live? And I’ll give you an example. I love beekeeping. I’m a beekeeper and there is a ton of Have beekeepers down in Australia, like beekeeper per capita is probably higher in Australia than anywhere in the world. And so they may not be the biggest marketplace. But they have the most beekeepers and so like, that’s something you should think about, you know, if you sell horse products, where has the most horses in the world? I don’t know. But that’s probably published somewhere. Right now.
That’s Yeah, if you’re, that’s really I didn’t think about that. But it totally makes sense where, you know, centralized Where are your products, you know, if you if you have a product that’s based off of something that’s centralized in a certain location, then yeah, you would want to go to that market.
I mean, this is a halfway joking, but this illustrates my point, if you sell headlamps, you know, look at a place like the North Pole where it’s dark for 24 hours, four months on it. I mean, you know, think about like, Why do people want to use my product? What makes it unique? And if you’re selling a light, you know, look at places that are far away from the equator that have like large fluctuations in light. And so I I bring that up somewhat as a joke. I’m not sure what the Amazon North Pole market looks like, but I don’t know if like Santa does FBA but look into it. Look, as Eddie Bravo says like, look into it.
Look into it. Yeah, the the results were coming back slim.
For sure. For sure. Ken you have some firsthand experience here? Have you expanded to other marketplaces outside of the US?
Yes, David. So a few months ago, I got an email from Amazon and they had opened up a new program. It was like invite only so one of my one of my brands I expanded into, I believe they called it North America fulfillment or North America FBA fulfillment into Canada and Mexico. So I signed up for it and Amazon On does all of the exporting, they do all of the currency translations, taxes, none of that stuff. So they use the inventory from your Amazon.com And they ship fulfillment orders to Canada and Mexico. So it’s different than, than actually shipping inventory into the Amazon, Canada, Canadian fulfillment centers and Mexico fulfillment center so, and the listings, it literally took me 20 minutes to get set up my listings all translated. So the account that I that I enrolled this into, I believe I had about 30 skus at the time. And it it was, you know, like I said, it took me about 20 or 30 minutes to get it set up. And now they actually shut that program down during the pandemic and they have not started it back up yet. So I’ve seen very few sales coming out of that program. But, you know, we talked about it’s kind of a test right. So if I if I enable these little things in there and all sudden in Canada, maybe a couple of my products take off and I get a lot of sales well made, then maybe I actually go into you know, the.ca market and ship inventory and and kind of ramp that up. But the testing like I said it only took me 20 to 30 minutes.
Nice. Now this is I feel like a silly question, but there’s probably some people listening that have the same question for your Amazon, Mexico. Did you have to translate your listings into Spanish?
No, they auto translated.
So for for both Canada and and you know.ca.mx they both auto translated the listings now that whenever you set this up, you have to go through the questions very carefully. And it will ask you, you know, do you want us to translate all your listings and if you uncheck it, then they’re not going to but I left mine checked. Now. This is only a test for me. But you know if I was going to go deep, I would. I know some you know Spanish speakers, I would have them come in and kind of double check that because I do not speak Spanish, or nor do I speak French. So I don’t know if some of the, you know, listings might need to be dialed in at some point, but they were auto translated, I’m assuming by an AI or, you know, whatever system that Amazon’s got going on there.
That was when I’ve looked into expanding in international markets that seemed like a giant hurdle. But it turns out there are a ton of like high school Spanish teachers on Upwork that will translate stuff very cheaply for you. And it is better right than like Google Translate, because that’s a computer doing it and they will sometimes like sentence structure that will change things around. It’s one of those things that for me, I don’t speak Spanish so it’s impossible to do a quality check. But I just I send it out. And when I receive it back, I assume that you know, these Spanish words are in order and they they look good.
David as we move along here, what are some other milestones with your brand
before you move off of Amazon, I would encourage you to have your brand registered as an LLC or just registered with the IRS. It could be as a sole proprietorship. That’s a totally different episode. But what you’re going to get there, for instance, I register all mine as LLC, so I’ll use that as an example. You will get an Ei n, which stands for employer identification number, and on most of these websites, so on jet on Walmart, on Etsy, they’re going to ask for your Ei n. And so this is just good practice in general for business, but it’s a step that you’re going to want to take before moving off of off of Amazon for sure. I would also add that that you ought to have your own website. And this is something that we’ve talked about on several different episodes, but when you have shoppers on your own website, you own their email address, you own their contact information, you can interface with them however you’d like. And you don’t have to play by Amazon’s rules. So for instance, there are a lot of things that are against Terms of Service. When you sell to an amazon customer on your own website, it’s the Wild West, you can do whatever you want, within reason. And so I think that that is a step that you should consider before moving to some of these alternative sales channels. For sure. One other thing that I think is very important to do when you’re thinking about expansion, or you’re just thinking about your business in general, is you need to force yourself to be honest, I think you need to do an assessment of your own brand. And here’s the reason why. If you think of the lifecycle of an Amazon seller, typically they pick their product pretty early on in the process, like I know, like my legacy brand that I generates the most amount of revenue for me. I picked that product category, very early on. Before I knew a lot about search volume before I knew about all these online tools, and I’ve kind of stuck with that one, and it’s working out, okay. But if your brand sucks on Amazon, it’s going to suck on eBay. If you’re not profitable on Amazon, you’re not going to be profitable on eBay. If people don’t like your products on Amazon, they’re not gonna like your products on eBay, or Walmart. So these different sales channels are not going to save your company. Now, there may be some, like, very rare instances where this doesn’t hold true, I’ll say like arts and crafts type things. They’re a great fit for Etsy. And there are people that crush it on Etsy, that do okay on Amazon, but I think generally, doing an assessment of your own brand is super important. And this may be a good time to pivot and say, Alright, instead of expanding off of Amazon with this mediocre brand, I’m going to start a second brand on Amazon. And again, this goes against the grain of diversification. With the exception of you can have a second seller account. So if one seller account gets shut down, you still, you know, can be earning income from Amazon. But I think you need to be honest with yourself. And it’s a tough thing to do. But, you know, as I mentioned before, things always seem to take twice as long and be half as profitable. Assess your profitability. And this is something that I’m going through right now. When I first got into the market that I sell in, I thought I was going to operate at about a 40% margin. After everybody gets paid after all my advertising. What I found is I operate between 15 and 20%, which is okay. But when I’m thinking about doubling down on that brand or expanding off of Amazon, it may be a better move for me to start a second brand. And so I think that that’s something that that you should be thinking about in profitability needs to be part of that conversation. competitiveness needs to be part of that conversation. But know that switching to eBay is not going to save your company. It may just provide you with 10% more sales.
That’s good. And,you know, diversification is, you know, it adds a little bit of safety net or, you know, mitigates a little bit of risk. But like you mentioned, it’s not gonna, it’s not gonna save your business or, or add a ton of value, but multiplied over four or 567 external channels, adds a cushion, a safety net, for sure, for sure. And to your point on multiple or reassessing your brand. I think at any time, you know, you go for chapter two around to you bring a wealth of experience and and you can you can use all of the all of your own say failures, but all of your learning points from brand one and improve it on brand two So it’s going to come back in, you know, you’re going to come in that much faster and stronger.
Let me ask you this can so think about the first product that you launched. Alright, it was a number of years ago. And your knowledge basis since then has greatly expanded, knowing what you know, now, would you have launched that product?
It’s tough to say, No. Yeah, I wouldn’t. I mean, that that, that first product that I have still sell it now. And I built a brand around it. But yeah, I, you know, I would change a lot of stuff, I would want to be passionate about the products that I sell now, and I’m not passionate about that. I found that with the tool, like you mentioned, you know, on search volume and stuff like that, but the answers is I would do something different.
Yeah, I would answer that in the same way. I would not launch the first product that I launched, I would not launch it again. And it’s just because I’ve learned so much more. Over the last couple years I’ve learned through the school of hard knocks But unfortunately, you’re kind of married to that decision for a long time. And so, you know, I, I say this, I don’t want people to get, you know, analysis paralysis, where they’re thinking about what product do I launch? What product do I launch at some point you need to jump in. But I think you also need to realize that after you do this for a couple years, you’re going to know way more, and that maybe starting a second brand is the move and all the mistakes that you made with brand number one, you’re not going to make with brand number two, you know, you’re going to you’re going to check the, you know, one thing I would do, I would check the Patent and Trademark Office website that would have saved me a trademark lawsuit. I would have got brand registered much more quickly. And so I think that, that that’s something that that you should consider as part of this whole equation, in terms of like diversifying off of Amazon. Next, let’s dive into some of these other ones. Amazon sales channels. And for each one of these, I’m going to give you the pros, the cons, some fees, any drawbacks that I’ve observed, and let you make your own decision. So I’m going to start off with eBay. So eBay makes up 6.1% of all online retail. And so to compare this to Amazon, in 2019, they had 47% of all online retail. And so eBay is much smaller. You can pretty much sell anything on eBay. You know, it kind of made its name for itself back in the 90s with autographed memorabilia, but you can really buy anything there. And so there are a couple niches that are particularly strong one is eBay Motors, and then electronics, phone accessories, commodity type products like that. That’s a good option to sell there. Now eBay charges a 10% referral fee plus PayPal fees of two to three percent plus your own fulfillment. So to compare this to Amazon Amazon’s referral fees are 15%. And then there’s a fulfillment fee on top of this. And so with eBay, you can use Amazon multi channel fulfillment. So you don’t have to re establish all of your inventory at three PL you can drop ship out of your Amazon inventory, be paid a little more for that. And so that’s just part of playing the game, I would say from a fee standpoint. It’s about equivalent to Amazon. Now, one drawback I’ve observed about eBay is they are losing market share every year. Currently, it’s 5%. The size of Amazon, five years ago is 10%, the size of Amazon. And so I think what you’re seeing is Amazon is exploding in e commerce and eBay is flatlined, or maybe decreasing a little bit and so that may not be a horse you want to bet on. But it also is number two In e commerce sites, so Amazon’s one, eBay’s two. Apple is three and the Home Depot is number four. And so Apple I think that they have a ton of media. So that would be like all of your songs and Apple Music and all of that. It gets lumped into that in the Home Depot Well, they just say good store, I got a lot of stuff and and it’s not something I think about in terms of expansion. But anyway, so that’s my overview of eBay.
David, that’s a very interesting statistic that you know, the popularity or market share not popularity market share of eBay has cut was cut in half within five years. I didn’t know that. So it sounds like you know, they’re the same, you know, buyers the same market on eBay is what it was and and they haven’t, they’re not expanding. So interesting stat.
Yeah, I think I’ve learned don’t bet against Jeff Bezos right in this dovetails into my my next ecommerce sales channel, Walmart, don’t bet against Walmart, you know, you look at 10 years ago, and this is more brick and mortar retail, but Kmart was about the same size as Walmart. target was about the same size as Walmart. And Walmart has come out as the clear leader in that type of commerce. And so they’ve made a couple key acquisitions, which I’ll talk about, but their e commerce revenue is growing. So for instance, in 2019, their e commerce revenue increased by 43%. In 2020, they’re up 37%. I noticed when I google something walmart.com ads are showing up just as they are with Amazon. But I think that Walmart is it’s an up and comer and I think that if you get involved with Walmart, you’re kind of banking on future growth. I don’t think Amazon can own nearly half of all e commerce market share for that long, but it may. So one thing I like about Walmart is you can sell pretty much anything they’re in. So you know, you think you walk into a typical Walmart store, they’ve got everything. The same thing applies to their e commerce website, you can sell anything you want there. Now fees, Walmart has referral fees similar to Amazon, it depends on the category, but typically it averages out at around 15%. And so again, eBay, Amazon, Walmart, all the fees are right around the same. etsy is awesome. I’m going to talk about that next. But Walmart fees, referral fees, plus you need to factor in the fulfillment there. So, you know, if you’re thinking about expansion to Walmart, you may look at your category and see what the referral fees are for that particular category.
So David, before we move on, one one interesting statistic that I read this morning, about what Walmart, like you had mentioned, you know, they’re coming on strong lately. Some of the some of the, the sales statistics are coming out since the pandemic hit and they’re they’re really high year over year for Walmart I don’t remember exactly what they were but one of the statistics that I that I do remember was Amazon has 5000 stores and their their food orders and food pickup has skyrocketed and competing against Amazon in the same space who Amazon only has Whole Foods which I believe the store count was in the hundreds. So you know, you’re talking 5000 for a few hundreds. And what the or the article I did read said, you know, shoppers are adding more things to their cart, not only food, they’re adding, you know, whatever, you know, add on items, and then picking them up because it’s more convenient. So I would look to see, you know, some really huge numbers coming out of Walmart just because I don’t think I think shoppers are going to continue to take Get in that pattern. And it’s gonna, I think it’s gonna help Walmart,
for sure for sure. You know, one thing I didn’t mention about Walmart is when they are thinking about expanding a particular offering. So for instance, say they are wanting to expand into tank tops, men’s tank tops, they are not going to go out and guess what men’s tank top is going to sell the best. They’re going to look at search volume. And they likely This is unconfirmed, but they are likely going to ecommerce and looking at what has the highest conversion rate. What attracts the most eyeballs because if it’s attracting eyeballs on the computer, it will likely attract eyeballs in the store. And so I think you have if you are a star on walmart.com if you’re an out performer, the opportunity to get picked up and sell in Amazon’s brick and mortar stores would be huge. Now I’ve heard that they are a bear to negotiate with but they also Have more stores than any other retail stores like that. And so that that would be huge. That would be a huge win. If you could get on Walmart shelves.
Yeah, absolutely. And to confirm that I do have a friend of mine that was in Walmart and the way he got in there was that, you know, apply say, hey, the buyer was like, Well, how does it do on.com they tested it did really well on .com they brought them into the store. So it confirmed
for sure. Now one huge drawback of Walmart is you cannot fulfill your orders out of multi channel fulfillment. And so this means you need to use a third party logistics firm, which means splitting your inventory which can be a cash flow stream. And so this is something that I think looking at the three PL is in for those of you who are unfamiliar a three PL that stands for third party logistics. They are the ones that are going to receive your pallet of goods ship them off to the end customer. And so, you know, if we’re sitting around talking about Amazon, a popular topic is Hey, did you see Amazon increase their FBA fees. And in we’re kind of at the mercy of Amazon fulfillment in what they will charge whatever they want to charge. Now, looking into a third party logistics firm is a good move, because at some point, you may want to exit Amazon FBA and just have a three PL do all your fulfillment for you. And we’ve talked about that the time to move maybe around like between 1-5 million. Is that what what you told me?
Yeah, I think around that 5 million range, you know, three to five bit, probably take a deep look at that and see what the cost is the savings
for sure. But I mean, if you look at your income statement, how much of your expenses are eaten up by Amazon fulfillment fees, it’s a lot and so I think, you know, You go out and get bids from three, 3PL’s. And, you know, they’re at about the same amount per unit as Amazon will stick with Amazon. But if they’re way cheaper, you know, explore that. And so I think looking into Walmart is going to force you to look at 3PLs. And I think that alone is a good exercise to go through, especially if you’re starting to sell more and more units reaching the high six figures or low seven figures. I think it makes sense to look into a three PL
Yeah, for sure. What about your favorite one here, Etsy,
Dude I’m a huge fan of Etsy. I’m a huge fan of Etsy and for those of you who are unfamiliar, if you like phrases like vintage, or handcrafted or sustainably sourced, then you’re probably going to be a shopper on Etsy. It attracts that type of customer and so they, they sell fashion products, they sell a lot of handmade products, they sell craft supplies, but they’re kind of a niche website. And so this isn’t a good fit for everybody. But I sell on Etsy. I have some hand handmade products and know that handmade. That’s a very loose interpretation. You can go on there, if you look at like search for wooden watches, they will have all kinds of wooden watches that are manufactured in China. They’re handmade. Yes, but there’s a loose interpretation there. So I but I’m a huge I’m a huge fan of Etsy in the reason for that is their fees. So they charge you 20 cents per listing. And then they take 3.5% of your sales.
So 20 cents per listing, so a per sale,
no, to set up your listing cost 20 cents, and you have to renew it like every 90 days. But it’s really cheap relative to all of these other places that I’ve mentioned. And the other thing I like about it is they pay you within a couple days on a transaction level basis. So for those of you that sell on Amazon, you know that they don’t pay you all of your fees right away. It often takes like four to six weeks. They have if you have a huge spike in sales, you’re not going to see that cash show up in your account for over a month. And they will they have a withholding to cover any returns, which I think is way too high. But again, when you’re on Big Brother Amazon’s website, you play by Big Brother Amazon’s rules. And so I really like Etsy. It interfaces really well in terms of like how your listing setup, transitioning from Amazon to Etsy is an easy move. And so I think if you have anything that is, you know, handmade or fashion or in crafts, give Etsy look, and so, I also will say, if I look at competitors, they’re oftentimes there are premium prices here and people are paying for the hand made type price which allow for handmade margins, which are typically low Hire. And so there’s not a lot of cheap, like, you’re not going to find a $2 sleep mask on here as you would find on, you know, Amazon basics, but I really like Etsy they pay fast. They’re pretty easy to use. And I just think that it’s something you should look into. And a quick way to know if your product would be a good fit, is do a search, you know, if you are selling drill bits, make sure that they’re you’re the platform sells drills, like are your customers hanging out here. Do you see some of your competitors here? And so, um, I think Etsy is a good play for certain sellers, and something that you should definitely look into.
Yeah, for sure. I haven’t didn’t know anything about Etsy and I have a couple of products that probably sell well on there. And those fees are kind of kind of nice to see on a 3.5% that’s that’s pretty that’s pretty nice.
it all falls at the bottom line and they’ve been that way for a while. I keep a keep thinking they’re going to increase fees to be in line with eBay and Amazon but as long as they keep them low like this, I think it’s it’s a good play. Nice. Lastly, I’m going to talk about jet.com And this is one thing that I think is important to note is in the fall of 2016, Jet comm became a subsidiary of Walmart. And so in June 2019, all jet comm employees were transferred to work on walmart.com. And the head the CEO, Simon Belgium, of jet comm, he stepped down. And so all of this has happened kind of recently. But I think that acquisition of jet was a good way for Amazon to get their foot in the door into e commerce. But I don’t see jet.com growing, it’s still an existing platform. But a lot of those resources have been brought over to Walmart. And now you have to operate under Walmart’s rules. So again, The requirement for a three PL that applies to jet. And so I think jet is something to look into. But I won’t put it towards the top of my list in terms of platforms to diversify onto. But give it a look, give it a look. And it comes up in conversation enough that I wanted to at least touch on it during this episode.
So David, as we wrap that up, are there any other e commerce sales channels that you want to cover?
You know, I’m not going to go into too much detail. But here are some that are worth looking into social media, Facebook and Instagram. They both have marketplace plugins for your channel. And so if you’re crushing it on social media, this may be something you want to look into. I mean, if you already have a lot of people showing up on your Facebook page, this may be a logical place to expand
yet just recently Facebook announced I believe it’s called Facebook stores. A new update, so something to check out.
Yeah, don’t bet against Zucks. I mean, right that company has continued to thrive. And again, I think there’s certain niche areas. You know, when I think of Facebook, I think of politics. There’s a lot of conversation about politics that happens there. If you’re selling political bumper stickers, Hey, good spot to sell your political bumper stickers. If you’re selling riding lawnmowers, maybe not but look into it and see what some of your competitors are doing or what is their Facebook page look like? And I’m not saying you should copy them but if some of your competitors especially larger competitors are doing good here, well, you might do well there as well. So look into it. Next one is Bonanza, it is the marketplace for unique items, crate joy, they have a subscription box service. And I really like that business model subscription box. I mean, it’s recurring revenue. And you know, I participate in the black rifle coffee box giveaway I guess it’s not a giveaway, but I purchased a subscriber And, and you know I like that I get excited when it shows up to my my door. Another one is his surprise tackle box for fishermen. You can buy this as a gift and you get like, I don’t know $30 worth of fishing tackle that shows up to your door every month nice and so it’s a nice way like in in January in February when it’s cold and you’re not fishing. It keeps you kind of engaged in that market and excited to go out and use the new knickknacks that you received. But anyway, crate joy is a good platform to do that. Craigslist, don’t overlook Craigslist. That is the website in the format of Craigslist has not changed in the last 10 years is the most basic and just pretty much boring. website layout but but there’s a lot of business that goes on on Craigslist and so especially if you have something that’s oversized or something that you could sell locally, throw up an advertisement on Craigslist or throw up a posting doesn’t cost anything. And then the last one is Groupon. And Groupon, I had bad experiences with them. And it mostly came down to me not following their terms of service or not being as responsive as I should have. The grass is always taller on this site that you water and I did not water, the Groupon for s proverbial grass. So
David, what are some general tasks to maintain off Amazon sales channels?
Yeah, so one thing I you know, I’ve talked about fees here. And in our talk about profit margin, it seems like on every episode, but get a good understanding of the fees and the category that you would be selling. And you may want to adjust your pricing, you know, on Etsy, they have lower fees, so you may be able to give some of that margin back to the customer. But you also may be able to increase your prices just because there’s a perceived value of higher quality products coming out of Etsy. So Just because you’re selling at 14.99 on Amazon doesn’t mean you need to sell at 14.99. On these other platforms, you may want to adjust that up or down. And I think that if you start to get some traction, so for instance, on Etsy, if you set up all your listings, and you start to get some traction there, that may be a good time to double down on Etsy and talk to some other experienced sellers. There are people that are crushing it on Etsy, there’s actually a couple really good podcasts out there. We’ll leave them in the show notes, but people that are crushing it on Etsy, and so but, you know, I would do that after he gets some sales, right. You know, we talked about incremental benefit, and we want the incremental, invested time to yield the highest benefit and so, pimping out your Etsy page, when you’re not getting any sales might not be the best option. Right? There are some tools that you can use for multi channel fulfillment. So to that I like is eecom dash and celebrate econ dash is by constant contact and sell brightest by godaddy. In they have, they will whenever you get an order on eBay, it will automatically create a fulfillment order out of your Amazon inventory. And so I do think that you don’t need to do that right away. So for instance on my eBay, right now I’m getting maybe like a couple sales a week. And it’s cheaper for me to go in there and just create a manual fulfillment order, I copy and paste over the address. It takes all in, it probably takes like 90 seconds. And so you know, this is something that you can pay a VA to do. And it’s a good opportunity for them to get familiar with your product portfolio. But you don’t need to use one of these tools right away. But once you start getting some traction, these two products may be something that you would want to look into one last thing in this city This is something that I think is when you’re expanding, this is a good opportunity to get organized. And you know, any side hustle starts out with a very disorganized folder structure typically, like if you think of the folder structure of a business, generally it’s very, very organized, things are easy to find. I ran my business off my desktop for like the first year and a half. And so when you’re pulling down photos, when you’re pulling down listings, this would be a good opportunity to revisit your folder structure and put it in a centralized location I use Dropbox business, which I really like, but get organized. And if you transfer this responsibility over to a VA, you can have them you know, label hero photo, I organize everything like all of my my folder structure now is very organized. And I use a child Jason, that is like, I use that on the front of my file name and I have have, you know each listing has a Word doc with the listing, the search terms, all my back end data, and also my bullet points. And so it’s just nice to have all of that in one spot. And you think about, you know, if your goal is to eventually exit your business, having something that’s organized that you can pass on to somebody that’s valuable right there. If your current business is run off your desktop, or on an external hard drive, and only you know where to find things, that’s gonna make things when you outsource, or when you sell your business, it’s just gonna make things a lot more difficult. And so when you’re thinking about diversification is a good opportunity to take a step back and think about how can I organize my business in the most efficient way possible? So that’s it Ken anything you want to talk about?
No, I think you covered a lot of content and I think it was super valuable. And you know, a lot of stuff a lot of other sales channels to think about research, maybe test, I think it was great. Awesome.
Awesome. Now Ken up until now, we have not asked our listeners for anything. We’ve been putting out free content. But I think it’s time that we make one small ask. And that small ask is, can you please go to wherever you get your podcasts and leave us a review. We read every single review. It really helps our podcast. And we’ve tried to put out as much free content as possible. And we’ve really been hesitant. We don’t like to burden you with anything that you don’t want to do but but please know that this will help Ken and I improve our show and give you more free content. So please do that. We really appreciate it.
Yeah, we would appreciate that. Thanks.
Thank you. Thank you everyone for tuning into today’s www.firingtheman.com podcast. If you like this episode, head on over to www.firingtheman.com And check out our resource library for exclusive firing the man discounts on popular e commerce subscription services That is www.firingtheman.com/resource. You can also find a comprehensive library of over 50 books that Ken and I have read in the last few years that have made a meaningful impact on our business or that head on over to www.firingtheman.com/library. Lastly, check us out on social media at firing the man, you know on YouTube at firing demand for exclusive content. This is David Schomer and Ken Wilson. We’re out
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