Month: August 2021
4 Most Popular Ways to Sell on Amazon
Amazon is one of the largest eCommerce companies in the world. In 2020, Amazon achieved $386 billion in revenue, over half of which was generated by third-party sellers.
Selling products on Amazon has become a highly profitable channel for entrepreneurs.
In this article, we will explore the four most popular ways to sell on Amazon. Keep reading to learn how to build a scalable, revenue-generating business on the Amazon marketplace.
1) Dropshipping on Amazon
Dropshipping is arguably the most popular way to start selling products on Amazon. This method is especially attractive for entrepreneurs who don’t want to spend a lot of time or money on their Amazon sales venture.
Through dropshipping, merchants sell products without physically holding any stock. Instead, when a customer buys a product, the seller uses their supplier to fulfill the order.
Sellers who use this method tend to reposition items as being their own brand or product. As a result, the customer often doesn’t know their order is fulfilled directly by the supplier or manufacturer, rather than the seller they purchased from.
Advantages of dropshipping
This method of selling often has a low or no startup cost. This means there’s a low barrier to entry, so the risk for starting your own business is minimized.
Another advantage of dropshipping is the low order fulfillment costs. Having a third-party supplier handle the order fulfillment means you don’t need to be concerned about the associated costs. The result? You can focus your time and energy on making sales and maximizing profit.
Our third and favorite benefit of dropshipping is you can run your business from anywhere. Because you don’t deal with any actual product, you aren’t constrained by physical limitations. You can run your business from anywhere in the world, knowing your suppliers will handle the distribution for you.
Disadvantages of dropshipping
Before you dive into dropshipping on Amazon, it’s a good idea to be aware of the potential drawbacks of this sales method.
First, you need to know Amazon’s guidelines on dropshipping. Breaching these guidelines could result in your account being suspended.
These guidelines include accepting responsibility for returns, being identified as the seller on all invoices, correct packing slips and packaging, and making sure there’s no mention of your supplier or manufacturer on your listings or orders.
Another disadvantage of dropshipping is that you have no control over the supply chain. While being removed from the supply chain can provide you with greater freedom as a business owner, it also raises challenges. If a customer is dissatisfied with product quality or fulfillment speeds, you are at the mercy of your supplier while still having to appease the customer.
Because of the low barrier to entry, being a dropshipper is a highly competitive market. This makes it harder for you to build a profitable business that stands out from the crowd. Overcompetition in dropshipping may cause you to cut your prices, which could, in turn, result in an unprofitable and unsustainable business model.
When to use dropshipping
If you want to venture into selling on Amazon right away, dropshipping could be the perfect model for you.
We recommend using dropshipping when you are first getting started as an Amazon seller. You can use this model to test the waters by selling low-value products to see what does and doesn’t work before you invest money into your business.
Once you have a clear understanding of how best to proceed with scaling your business, you can begin to look at some of the other popular ways to sell on Amazon.
2) Wholesale, or 1P selling on Amazon
When researching ways to sell on Amazon, you may notice people talking about 1P selling. This method refers to selling products on Amazon as a first-party (1P) seller through the Vendor Central platform. Here, Amazon acts as the retailer, and you operate as the wholesale supplier.
1P selling could be considered one of the easiest and fastest ways to sell on online marketplaces like Amazon. Rather than being responsible for creating product listings on Amazon, you sell the products directly to Amazon, who then lists the products on your behalf.
Through this method, Amazon offers you a wholesale price for your products. They are then responsible for setting the price, controlling the listings, and deciding when (and if) to purchase from you in the future. This means you don’t have to get involved in the sales process, other than the initial wholesale negotiation and fulfillment.
While it sounds like an easy way to sell on Amazon, wholesale 1P selling has its pros and cons.
Advantage of wholesale, or 1P selling on Amazon
If you are a manufacturer who already has products to distribute, then 1P selling could be a worthwhile investment for your brand.
The hands-off nature of 1P selling removes the headache of logistics and distribution of fulfilling orders for the end consumer. It also means you don’t handle customer service, consumer sales, or any direct-to-consumer marketing. This gives you more time and freedom within your business. Additionally, you won’t have to hire someone to help with these tasks, which keeps your business overhead low.
Because 1P selling on Amazon is a method of wholesale, you can sell your goods in bulk. Rather than relying on small, individual orders from the end consumer, you receive large purchase orders from retailers, earning you more profit in fewer sales..
Disadvantages of wholesale, or 1P selling on Amazon
Before opting to sell on Amazon via 1P selling, you need to consider your potential profit margins. Amazon will agree to buy your products at wholesale pricing, but often, they will negotiate to buy at lower rates.
Compared to direct-to-consumer sales, you can expect to receive a 20%–30% reduction in price when selling products wholesale. And, while Amazon will agree to a minimum advertised price (MAP), they also have the freedom to sell products for less than this if resellers are using a lower price point.
Secondly, you have no control over the product listing, which means you have no say in the pricing, product description, or photos. If you are someone who likes to have control over the ins and outs of your business, then wholesale may not be for you.
Another big disadvantage of 1P selling on Amazon is how restrictive the conditions are to sell through the Vendor Central platform. Before you agree to sell products via 1P selling with Amazon, be sure to check these conditions first. You may find you’re unable to sell products through other marketplaces, which leaves you at the mercy of Amazon for the sale of any goods.
When to use wholesale, or 1P selling on Amazon
Despite its disadvantages concerning financial rewards and restrictions, 1P selling works well for manufacturers who want to add another sales arm to their arsenal.
Before opting for 1P selling, first compare 1P selling to 3P selling on Amazon and choose a method that works best for your business.
3) Private label, or 3P selling on Amazon
While 1P selling takes place through Amazon’s Vendor Central platform, 3P selling is managed through the Seller Central platform.
With private label, or 3P selling on Amazon, you are the retailer. This means you are directly responsible for selling products to consumers via the Amazon marketplace.
As a 3P seller, you maintain control of your products and pricing. This gives you greater freedom of choice about how you sell your products and fulfill orders. With 3P selling on Amazon, you can choose to fulfill products through Fulfillment by Amazon (FBA), Fulfillment by Merchant (FBM), or to outsource fulfillment to a trusted partner.
Advantages of private label, or 3P selling on Amazon
Unlike 1P selling, 3P selling gives you authority over the pricing and listings for your products. This lets you price yourself competitively in real time against other Amazon sellers. You can also adjust your pricing to improve your profit margins and increase your revenue as an Amazon seller.
Another benefit is that, by cutting out the middleman (in this case, Amazon as a retailer), you can further increase your maximum profit per product. You also have better control over your inventory levels and don’t need to rely on another party to relist products when they sell out.
Being a private label, or 3P seller on Amazon offers you the freedom to expand to other sales channels and marketplaces. Whereas 1P selling can often limit you to selling products through Amazon only, 3P selling allows you to sell products on other marketplaces without the risk of being delisted.
Disadvantages of private label, or 3P selling on Amazon
3P selling puts you at the center of your Amazon sales process; you are responsible for meeting all order demands, including packing, shipping, and order fulfillment. This comes with the added obligation to process orders in a timely manner, meet customer expectations, adhere to marketplace requirements, and undertake direct-to-consumer marketing activity.
As you can see, 3P selling can be a time-consuming way to sell on Amazon. However, the increased profit of selling directly may offset this challenge.
Another drawback is that you still need to pay Amazon seller fees. These fees average from 8% to 20% depending on your chosen category. Along with seller fees, you will be responsible for the additional costs associated with fulfilling orders. Therefore, it’s important to weigh the potential profit versus losses of a 3P selling business.
When to use private label, or 3P selling on Amazon
If you’re deciding between 1P and 3P selling on Amazon, 3P selling is the favorable option, in our opinion. We especially recommend you use this method if you have the time to manage product listings and fulfill orders.
If you’re ready to have more creative authority over your brand, then 3P is the perfect sales method for you, as you will have full control over your product listings, merchandising, marketing, and more. It’s the ideal choice for those who are ready to handle the infrastructure and additional work that comes with listing products on Amazon via the Seller Central platform.
You can minimize the challenges of 3P selling by using MyFBAPrep. We will handle the preparation and packaging of your products for Amazon, letting you reap the fulfillment benefits of 1P wholesale and the cost-saving rewards of 3P selling.
4) Amazon retail arbitrage
If the first three options for selling on Amazon don’t appeal to you, retail arbitrage might. This popular method takes advantage of price differences between two markets. In simple terms, retail arbitrage (or online arbitrage) is all about reselling.
When you sell products using retail arbitrage, you buy discounted products from retailers and then resell these at a higher price on Amazon. For example, you may buy a product for $5 from Walmart, and then sell it for $10 on Amazon. If you buy 100 of these products at a $5 price point, you could then make a $500 profit reselling them at the higher $10 price point.
With retail arbitrage, you don’t need to engage a supplier to help you source products. You simply find products that are being sold cheaper at a retail store, then sell them at a higher price point online.
If you’re worried consumers won’t buy your product at a higher price point, don’t. They will buy, because its simple economics: product prices vary from store to store and from time to time.
If, for example, demand for a certain product drops, its price may also fall. You can use this window of opportunity to purchase a product at a lower price point, then resell it for profit when demand increases again.
Advantages of Amazon retail arbitrage
One of the key benefits of retail arbitrage is the low cost of entry. You can begin selling products through retail arbitrage with a low initial investment of $100–$200. This is because you sell products in small quantities and so don’t need to hold large quantities of stock.
Retail arbitrage is also a great way to make money quickly if you’re looking for a fast revenue-generating method. If you’re interested in starting to sell products on Amazon, then retail arbitrage is another easy and fast way to begin making a profit online.
Disadvantages of Amazon retail arbitrage
One of the biggest drawbacks of retail arbitrage is that it’s not a scalable business model. This sales method is often dependent on what product you’re able to buy at a discounted price. You can rarely plan such purchases in advance, so you likely can’t forecast future earnings from retail arbitrage.
Retail arbitrage also risks going against brand regulations. Amazon is making it harder for retailers to resell products through the marketplace. Third-party sellers often have to gain approval from brands before they can sell products on Amazon.
This can make it difficult for you to find products you’re allowed to sell on Amazon without seeking initial approval from the brand. If you accidentally use retail arbitrage to sell a product that’s part of the Amazon Brand Registry, you risk getting your account suspended and your seller capabilities revoked.
The final drawback of Amazon retail arbitrage is that it can be time consuming. Unlike other sales techniques such as 1P selling and dropshipping, retail arbitrage requires you to spend a significant amount of time trying to source great deals. This can entail visiting local stores or scouring the internet for deals on products you marked for interest.
When to use Amazon retail arbitrage
In short, the best time to use retail arbitrage is when you’re looking for a quick profit.
While the initial hunt for a product may take time, you will often find you can turn a quick profit once you find a great discounted product to resell on Amazon. This makes retail arbitrage an excellent choice if you need to make additional income in order to meet a short-term financial goal.
Summary of the most popular ways to sell on Amazon
As you can see, entrepreneurs have valuable options when it comes to selling products on Amazon. While not every method will suit every seller, it’s likely one of these four ways of selling on Amazon will be ideal for you and your business.
Whichever method you use, we recommend you first weigh the pros and cons. Where possible, it’s best to find a method that will bring you the highest financial return on investment for the lowest time and financial investment.
To make your transition to an Amazon seller an easy experience, we recommend engaging a third-party logistics partner to help you handle fulfillment. Our Preptopia™ platform paired with MyFBAPrep logistics services is the hassle-free way to save time and grow your online business.
Sourcing From Overseas: How to Find Your Next Best-Seller & Get it Into FBA
This is a guest post from the Wish Wholesale team.
Sourcing products from overseas is one of the most cost-effective ways to get inventory for your FBA business, allowing you to source high-quality products at significantly lower prices than you would find domestically.
It’s also a great way to find unique products that aren’t necessarily available from local wholesalers, and that not every other seller will be competing for on Amazon.
That said, finding the right products for your business and the right international supplier can be one of the most challenging and time-consuming tasks you take on.
With so many wholesale sites out there, how does a business choose the right overseas supplier to get inventory from? And once you purchase inventory from overseas, how do you get your items prepped and into FBA (Fulfillment by Amazon)?
It can get complicated fast, but putting a simple strategy in place will help you get started.
Keep reading to learn how to source high-quality, best-selling products from trusted overseas suppliers and get them directly into FBA.
1) Find a winning product
The competition on Amazon is fierce, so it’s important to find high-quality, unique products that your competitors won’t be able to easily find for less elsewhere. One of the best ways to find niche products that will sell well for your business is using Wish Wholesale, a U.S. based wholesale platform with thousands best-selling products.
They’re backed by Wish, which has been the #1 most downloaded shopping app for the past 3 years and is the destination for affordable and entertaining mobile shopping experiences. With over 250,000 active daily shoppers and over 500 million registered users, Wish ships over 2 million orders from overseas daily.
Wish Wholesale uses the sales data from these millions of customers to identify the products that have been trending over the past year. Business customers are then able to purchase these items in bulk and at discounted wholesale rates.
All Wish Wholesale products are best-sellers rated 4 out of 5 stars or better by thousands of past customers on the Wish shopping app. Sourcing your inventory with Wish Wholesale will save you hours of time on research and take a lot of the risk and guesswork out of the equation.
They offer a curated selection of 3,500 products across more than 55 categories and provide personalized product recommendations like what’s currently trending, new arrivals, seasonal favorites, and more. Their wholesale site makes it really easy to find high-quality products that are already proven best-sellers on Wish.
Once you’ve identified the product(s) you want to sell, the next step is to connect with a supplier who can manufacture your items.
2) Find an overseas supplier
There are pros and cons to sourcing from overseas. It’s typically much more cost-effective, allowing you to get higher profit margins on your sales. You’ll also be able to find unique products that aren’t available from local suppliers, giving you an edge on the competition.
On the other hand, when you’re sourcing internationally, you have to consider factors like longer shipping times and less visibility into the manufacturing process due to the long physical distance.
If you work with Wish Wholesale for your international inventory sourcing, their team of Sourcing Experts will work with you to find the products you’re looking for and connect you with a trusted supplier in their network.
They’ll work directly with you and the supplier throughout the sourcing process to ensure you get exactly what you’re looking for from a reliable supplier. They’ll also help handle any shipping and logistics arrangements and shipping is totally free as long as you place an order of $50 or more.
3) Get products ready for resale
Once you’ve successfully chosen and sourced your next best-selling product, you need to ship those items to the U.S. and get ready to sell on your chosen channels. If you’re selling on Amazon, you’ll likely want to get your products prepped for resale and into FBA for fulfillment.
Amazon FBA is a great option for fulfillment since Amazon handles the shipping and logistics once your items are in FBA. Shipping with FBA also ensures that your customers get their orders quickly with Prime shipping – a major competitive advantage.
However, there are some challenges that come with FBA. For example, managing your other fulfillment channels if you’re a multi-channel seller, and correctly prepping your products before they’re sent to FBA.
Using an FBA prep service can make it a completely hands-off process, allowing you to focus on growing your business. Simply ship your pallet of wholesale products directly to their warehouses and let them take it from there.
They’ll prep, package, and ship your products, and can even handle more complex requests like bundling and kitting products if you’re running a subscription service.
4) Continue to Grow a Thriving Business
Now that you know where to source top-selling products internationally and how to get them directly into FBA, you can focus on continuing to grow your business. Anyone can sell products, but what really differentiates a business from the competition are the other key factors like great marketing and excellent customer service. Freeing up your time to focus on these areas will give you that extra boost and really take your business to the next level.
How Kaspien Balances an Extensive Logistics Network With MyFBAPrep
Kaspien partners with popular eCommerce brands on multiple channels to provide real-time analytics, a comprehensive supply chain, brand protection and optimization, algorithmic advertising, multi-marketplace tools, and more. They have the unique experience and tech stack to help sellers grow and expand across marketplaces successfully and profitably.
Kaspien has partnered with more than four thousand brands, achieved more than $1 billion in retail sales, and won their clients a 30% increase in sales with strategic marketing. They also build tools based on the needs they observe in the industry, such as an ad management system. Most recently, they launched seller reimbursement software that quickly identifies cases eligible for reimbursement in Amazon accounts.
Their suite of services, history of excellence, and wealth of experience with multiple brands makes them a powerful ally for any eCommerce seller.
Kaspien uses MyFBAPrep within their expansive logistics network to handle prep and fulfillment, while staying flexible using our eCommerce services.
“MyFBAPrep primarily jumped out because there weren’t very many other providers that had the options; the different locations, the ability to support different lines of business, whether it was FBA prep, DTC pivots, or otherwise.” – Jeff Bernatz, Kaspien Strategic Warehouse Director
We spoke with Kaspien Strategic Warehouse Director Jeff Bernatz to learn how he stays agile and ensures seamless operations for thousands of brands.
Why is a nationwide network crucial for eCommerce sellers?
“We started working with MyFBAPrep in 2019…. Having our inventory in multiple warehouses and being able to ship new inventory into and out of multiple warehouses gave us flexibility that we did not have before.” – Jeff Bernatz, Kaspien Strategic Warehouse Director
eCommerce success is inextricably linked to a nationwide warehouse and prep network for two reasons:
1) Fast, affordable delivery to your final destination
The closer to your final destination you can prep inventory, the faster and cheaper it will be to deliver.
For many sellers, the final destination is an FBA warehouse. That’s the last time they have to think about their fulfillment, as Amazon takes over the process from there.
Whether your item’s goal is to get into the FBA network or to your end consumer, it’s vital to keep inventory in close proximity.
2) Fast, affordable delivery from your suppliers
The more nodes you have in a warehouse network, the easier it is to snag a location close to your supplier.
For example, if you have a supplier in California, but a warehouse in New York, you’ll spend a lot shipping goods from California to New York to be prepped, only to have them shipped back across the country for delivery.
Speed and price can make or break an eCommerce business, as it has a waterfall effect on other critical aspects, including ROI, retention and CLV, buyer experience, revenue and profit, and more.
Expanding from in-house to a nationwide warehouse network
“We wanted to expand our FBA prep capabilities to different regions of the country in order to improve efficiency and reduce shipping costs.” – Jeff Bernatz, Kaspien Strategic Warehouse Director
Before MyFBAPrep, Kaspien used two in-house facilities and a handful of 3PLs to handle the bulk of their operations. However, they needed a more efficient solution to cover other regions of the country and reduce their shipping costs. Enter MyFBAPrep.
Maintaining in-house control with outsourced nodes
“We vetted many (10+) other 3PL providers before finding MyFBAPrep.” – Jeff Bernatz, Kaspien Strategic Warehouse Director
Kaspien knew they needed extensive coverage to stay competitive in terms of both price and service. But that didn’t mean they had to abandon their in-house facilities once they found the perfect fit.
The Kaspien team tested more than 10 alternative warehouses and 3PL/4PL options, including a facility in New York they ended up closing after finding MyFBAPrep. They strategically kept their in-house warehouses to handle key processes that required tighter control, while outsourcing prep work and shipping to MyFBAPrep.
As a result, they gained access to multiple locations for their inventory needs, on demand, and all part of one network.
Unlocking versatility with MyFBAPrep
“The biggest appealing factor of MyFBAPrep is there’s a lot of flexibility. If something changes in the market, we can work together with the team and address it.” – Jeff Bernatz, Kaspien Strategic Warehouse Director
MyFBAPrep has a wide variety of eCommerce services, and we’re always willing to work with our sellers to meet their specific needs. Our expansive warehouse network gives us access to almost every eCommerce service you can imagine, from cold storage to bubble wrap machines.
This enabled MyFBAPrep to equip Kaspien with the right options to address changes in the eCommerce industry, and react quickly to shifts in the marketplace.
Now, Kaspien can easily pivot to new business models or alter their logistics structure on demand. They can utilize all of our services and warehouse locations, or ignore 99% of them, depending on their needs and business circumstances.
For example, if they have a large shipment of goods coming in that fills an entire warehouse (it’s happened) we can route the overflow to the next closest location. If one of their brand manufacturers can no longer accommodate prep or packaging at the warehouse, they can have MyFBAPrep take on the work instead. Or, if they want to launch a larger DTC presence with one of their Amazon-only brands, MyFBAPrep can continue prepping their inventory, then split the amount we send to FBA to reserve items for DTC sales.
A problem-solving operations partner
“I love the team that we work with — I love their flexibility and the way we take on problems. If something happens or Amazon makes a change, it’s never the blame game of who is responsible for it. It’s just ‘lets attack the problem, let’s figure out how we’re going to handle it moving forward, and what’s a better way to go about this long term.” – Jeff Bernatz, Kaspien Strategic Warehouse Director
We work with our sellers, warehouses, and FBA to ensure items reach the FBA network seamlessly and are delivered to DTC customers quickly. But in eCommerce, things inevitably go wrong; items are lost, your marketplace imposes inventory limits, customers complain. No matter what happens, though, the MyFBAPrep team is always ready to problem solve.
If anything comes up, the Kaspien team knows they can rely on MyFBAPrep and our extensive network of warehouses and services to accommodate — helping to ensure uninterrupted sales.
Kaspien’s favorite part about working with MyFBAPrep
“I love the entrepreneurial spirit of the MyFBAPrep team members we work with. They are always up to solve a problem and be flexible to help support our business needs, no matter how ‘outside the box’ our ideas may be.” – Jeff Bernatz, Kaspien Strategic Warehouse Director
Our customers are at the center of everything we do at MyFBAPrep, and we fully invest in each of them. Every seller on our roster has a direct line to our founders and leadership team to ask questions, solve business problems, or just chat about eCommerce in general.
If there’s anything we can do to help our sellers improve their business or make their lives easier, we’re always happy to lend a hand.
Jeff Bernatz says it best: “Their focus is always on partnership. It’s always on how we do better together. It’s never negative, which I really appreciate, because we didn’t always have that experience with prior 3PLs.”
If you’d like to expand your logistics and flexibility with MyFBAPrep, create an account or book a demo with our team.
Start a Subscription Box Business: 15 Subscription Boxes to Create Today
There’s no substitute for convenience. In the post-pandemic world, consumers are more eager than ever to have their favorite products delivered to their doorsteps. A subscription box business is one of the ideal ways to capitalize on this shift.
Some Americans are now signed up for 10 or more subscriptions, says The Washington Post, while budgeting app Truebill reports an average of 21 subscriptions per user.
From wine clubs to clothing boxes, groceries to workout packages, consumers are flocking to ship-to-home offerings. Altogether, the subscription box market is worth an estimated $12–$15 billion.
If you’re thinking about wading into the subscription business yourself, now may be the perfect time. This article will cover 15 types of subscription boxes you can consider selling.
Why subscription boxes?
Retention and CLV
Subscription boxes are an excellent way to improve your customer retention and extend customer lifetime value by offering buyers a hassle-free experience they can set up and forget.
Items will arrive every month, or at whatever cadence you choose. This prevents buyers from going to your competitors out of convenience, or forgetting about your brand.
Introduce new products to your loyal fans
Your subscription box buyers are likely some of your most loyal customers. Why not reward them with surprise freebies in every box? It’s a nice way to say thank you to your fans, while also introducing new items they might like to purchase (increasing your average order volume as well).
Some subscription boxes are designed to include new items with each delivery, which is another great way to introduce and test out new products.
Deliver an experience
Subscription boxes are designed to delight your customers. You can plan ahead to ensure on-time deliveries every time. You can include surprise gifts, information about deals and coupons, and offer discounts in exchange for feedback.
Starting a subscription box means creating an experience for your best buyers. All of this leads to higher retention rates, greater customer loyalty, and a boost in brand recognition.
15 Subscription box business ideas to look into today
1. Snack subscription box
In the last year, specially themed boxes like Bokksu — a Japanese snack, candies, and tea box — have boomed. Even big-box brands like Pepsi recently launched their own snack subscriptions, offering a variety of bundles and/or monthly themes to keep things spicy.
If you’re looking to offer a snack box, pick a niche. Decide whether to curate snacks for kids, adults, or offices. Or, tailor your snack items to people with a hankering for spicy snacks, chocolate, healthy snacks, or some other category.
2. Coffee subscription box
The coffee category is dominated by big players like Starbucks and Peets, which offer coffee straight from the roastery. For this reason, it may only make sense for you to sell a coffee subscription if you own your own roastery or have a relationship with a coffee shop.
Alternatively, you could follow in the footsteps of Atlas Coffee Club or Trade Coffee, which offer a variety of coffees personalized to your taste.
3. Tea subscription box
There are endless varieties of tea, making this a popular subscription box option. You send subscribers tea from around the world, that match personal palettes, or that are focused on particular needs (providing energy, inducing sleep, etc.).
4. Art subscription box
Offer an art box that restocks supplies for professional artists, or sell project-based subscriptions for adults and/or kids who are looking to pass the time. Art subscription boxes can be segmented by project type (portraits, abstract, scenery), age range, or art utensil (pencil, watercolor, acrylic paint).
5. Craft subscription box
Like art, crafting is a shared hobby among kids and adults. Some of the most popular subscriptions today include knitting, jewelry making, embroidery, and stationary.
6. Dog (or cat) subscription box
PetSmart, PETCO — and now Amazon with its white-labeled pet food — rake in a majority of pet-related eCommerce sales. They have the luxury of lower margins and higher sales, but you can differentiate yourself by offering specialty pet treats, gear for puppies or kittens (versus full-grown pets), and more.
7. Kids subscription box
Kids subscription boxes are a godsend for busy parents. There are many paths you can take with this: boxes for certain age groups, interests, skill sets, needs (like clothes or school supplies), and more. Today, popular services like KiwiCo aim to blend education with fun.
8. Baby products subscription box
This is great for the sleep-deprived mom who doesn’t have time to leave the house for baby supplies. Baby product subscription boxes can include diapers, baby formula, toys, clothes, and more. Your box could even adjust to every month a baby grows bigger, more alert, and more mobile.
9. Book subscription box
Do you want to curate books for adults or kids? Sci-fi or nonfiction? Award-winning authors or up-and-coming ones? Whichever way you go, a book subscription can garner significant customer loyalty. Some of the most popular boxes today offer a book of the month, paired with book-related activities and collectibles.
10. Wine, beer, or cocktail subscription box
There are many rules, alcohol licenses, and shipping requirements to be aware of, so businesses that already sell alcohol are in the best position to offer this type of subscription. Wine, beer, or cocktail boxes can be great for gaining recurring business from regular wine drinkers, or for hosting events like office cocktail parties.
11. Food subscription box
Food boxes are now the second-largest subscription category behind beauty, and attract 150 million website visits per year, according to Exploding Topics. These boxes can include ready-made foods, meal kits, and/or baking recipes.
Note: it’s a highly saturated space with multiple players on the field (think Blue Apron). Proceed with caution and focus on easy-to-transport, highly specialized kits.
12. Plant subscription box
Fresh flower deliveries house plants, gardening supplies and seeds — a plant subscription box can be a delightful surprise for plant lovers everywhere.
13. Makeup subscription box
While highly competitive, cosmetics are a booming industry with enough market share to go around. As with many of the suggestions above, the key here is to “niche down.” Know the exact type of buyer you’re trying to target, be it teens, working women, people with sensitive skin, etc.
14. Cleaning supplies subscription box
The pandemic underscored the importance of a clean space, and that isn’t likely to fade any time soon. Both home and office owners may jump at the chance to buy a subscription that offers safe, popular cleaning supplies.
15. Office supplies subscription box
As businesses are reopening, they’re going to need to restock on all their regular items like computer ink, pens, and paper — things you could easily supply on a monthly basis.
Wrapping up — Subscription boxes are booming for DTC eCommerce
Subscription boxes improve retention, boost customer lifetime value and average order value, and deliver an experience your buyers eagerly anticipate. Start a subscription box business today that caters to your target audience and makes their lives easier and more enjoyable.
How Caveman Foods Found Easy, Cost-Effective Kitting With MyFBAPrep
Caveman Foods provides Paleo-friendly snacks that are delicious, nutritious, and made with natural ingredients. They cut out artificial sweeteners, GMOs, dairy, soy, and gluten. Their guilt-free snacks are either Paleo Certified or Paleo-Friendly Certified, making them excellent for hiking, camping, road trips, or just taking along for when you feel like a healthy treat.
Needless to say, Caveman Foods has boomed in popularity thanks to their wide range of choices and special deals on bundles. With consumers increasingly doing their grocery shopping online, the company’s need for a flexible prep partner quickly turned into a headache for its internal team.
Using bundles to differentiate
For eCommerce sellers, bundling products comes with a myriad of benefits:
- It allows sellers to suggest complementary items that a consumer wouldn’t have thought to purchase or didn’t realize were available.
- It offers price shoppers a selection of deals so they come away feeling good about their savings.
- It gives brands an advantage over their competitors, who may sell similar products, but not the same bundles or offerings.
Selling bundles is a smart strategy for Caveman Foods, as it distinguishes their offerings from others on the market and gives customers more choice. Their variety pack is one of their most popular bundles, which also serves to introduce all of their bar flavors to consumers. This exposes them to flavors they likely would not have bought separately.
Tapping into efficient kitting with MyFBAPrep
“[MyFBAPrep] makes it easy and cost effective.” – Damon Levy, Caveman Foods Senior Director, Digital
Before MyFBAPrep, Caveman Foods kitted ad hoc and, according to Damon, “it was expensive because we weren’t doing it efficiently.” Since their manufacturing process didn’t incorporate kits or bundles, the internal Caveman team was stuck doing it as orders came in, which took away vital time from other core responsibilities.
They turned to MyFBAPrep to handle all of their kitting and bundling for them, successfully outsourcing the work of a few thousand bundles per month. Caveman Foods saves approximately $500 on each kitting order, plus the time it took them to do it originally. They also enjoy MyFBAPrep’s rapid turnaround time for item prep, which ranges from one to three days.
A simplified process
“They are transparent, and they don’t force too much process into the relationship.” – Damon Levy, Caveman Foods Senior Director, Digital
MyFBAPrep exists to make sellers’ lives easier. We want the merchants who partner with us to say, “Thank goodness for MyFBAPrep.” It’s our goal with every contract we sign, and it holds true for Caveman Foods.
We handle everything for the Caveman team, from receiving and preparing products for sale, to shipping them to their desired fulfillment network or carrier. Plus, we provide them a clear picture of their inventory and progress throughout.
Damon recommends MyFBAPrep for any seller who receives inventory from overseas, or needs their items specially prepped before heading to their final destination.
DTC eCommerce Customer Acquisition: 10 Ways to Get Shoppers to Your Site
Your brand will always need to invest in DTC customer acquisition, since you’ll always need an influx of customers. But it’s possible customers may no longer need you. It’s a harsh truth, but one you need to face.
Today, the average person sees up to 5,000 ads per day. On Amazon alone, a whopping 78% of searches are also unbranded, underscoring how an increasing number of shoppers are trying brands they’ve never heard of before.
In this hyper-competitive environment, it’s critical to invest in a solid customer acquisition strategy that keeps your brand front and center. Without one, you could be leaving money on the table and exposing prospects to the influence of your competitors.
This article breaks down what you need to know to create a customer acquisition plan. Keep these tips in mind as you consider the right mix of channels and tactics for your business.
Why you should invest in your direct-to-consumer (DTC) strategy
Selling directly to consumers is essential in today’s eCommerce climate. High competition and a multitude of sales channels necessitates having a direct line to your customers.
Here are just a few reasons why it’s so important to invest in DTC.
Own your customer relationship
When someone makes a purchase on a marketplace, the marketplace knows who the customer is, but doesn’t necessarily share that with sellers. There’s no way for you to contact that customer again, whether it’s to offer a new or similar product, or to get their feedback.
Having your own website means you control the customer relationship, and can capture their information. You open a direct line to your buyers so you can request reviews and ratings, learn what they like and don’t like about your items, and reach out for retargeting.
Customize your buyer experience
Marketplaces are optimized for purchase, no matter the brand. That means your listings will appear alongside your competitors’ and often be compared based on price.
When you have your own DTC website, you can customize your buyer experience. This includes featuring only your products and related SKUs to encourage higher cart values. You not only eliminate the competition from the consideration stage, you can also craft a buyer experience so enjoyable, it inspires brand loyalty.
Access additional acquisition and retention tactics
Marketplaces are strict about what you can offer and what you can request from buyers. For example, you may not be able to offer a discount or free gift in exchange for a review. However, on your own website, you can implement new acquisition and retention tactics.
For example, you can have a pop-up that offers 10% off for everyone who subscribes to your newsletter. That helps improve customer retention, since you can send customized product selections and announcements to your list. Or you can start a blog and rank in search engines to promote your website via SEO.
Diversify your revenue streams
Marketplace rules are constantly shifting, and most 3P sellers have little control over changes in policy. There’s always a risk of your listing being removed, your seller account being flagged or banned, and subsequent loss of revenue. For example, if an unhappy customer or competitor flags your company as fraudulent, you may have to stop selling until you resolve the issue and prove you’re a legitimate seller.
When you sell DTC, you diversify your revenue streams while investing in a sales channel that you own. That means there’s less risk of this sales channel being cut off. Even if a marketplace bans you, your revenue won’t drop to zero as customers can continue to purchase from you on your own store.
Reduce marketplace fees
Finally, there’s a direct monetary driver for having your own DTC channel: you avoid marketplace commissions and fees.
Many marketplaces charge a percentage of sales, which differ depending on the category. When selling directly to consumers, you bypass this fee, which means you keep more of your revenue.
Key components of a DTC acquisition strategy
There are several fundamental components of a DTC customer acquisition strategy that are meant to keep your brand running in the right direction.
Know your audience
Before you launch any strategy, you need to know who your customers are. A shocking number of businesses don’t spend enough time developing their buyer personas, and have a shallow understanding of their customers.
Knowing, for example, that your best customers are between the ages of 18 and 24, female, and live in urban areas is a decent start. Aside from that, what do your customers like to do? What do they value about products and/or brands like yours? Who in their circle influences their decisions?
The answers to all these questions will help you decide where to post your ads, how to frame your messages, and how to become an integral part of your customers’ lives. You may even discover secondary audiences in the process, like when Duck Brand learned some of its customers used their duct tape for decoration as opposed to repair ductwork.
Identify the right marketing channels
Beware of shiny object syndrome. Just because everyone and their mom seems to be on TikTok doesn’t mean your brand belongs there. Likewise, just because you can be on every social platform doesn’t mean you should.
Jumping the gun or committing to too many marketing channels at once are surefire ways to burn yourself out. Be strategic about your channel selection. Find out why your customers use certain channels and how often. For instance, even though your buyers may be on TikTok, perhaps they’re on it solely for comedic relief. Your ads for vitamins may therefore receive little engagement because they involve more serious, educational content.
Going one step further, you’ll need to analyze your own strengths and willingness to commit fully to new channels. In order for those platforms to work, you need to be ready to test, analyze, adapt, then test again on repeat. Do you have the bandwidth and discipline to do that?
Set the right budget
Needless to say, some acquisition channels cost more than others.
All of them require some sort of capital, even if it means just borrowing from the resources you already have (staff, tools, etc.). For this reason, you’ll want to know your expected budget up front.
Consult various resources, experts, and past reports if you’re not sure what that number will be. As you experiment with channels, keep track of your customer acquisition cost (CAC). This is the total of all of your sales/marketing costs divided by the number of customers gained over time.
CAC, alongside metrics like customer lifetime value (CLTV), will help you determine what’s working and what’s not.
Set your goals and timeline
You’ll need to give yourself descriptive goals and milestones to work towards. Instead of simply saying, “We want more website visitors,” come up with specific goals like, “We plan to get 10,000 more website visitors in three months, which should produce 250 new customers.”
It’s okay if your goals feel ambitious or slightly arbitrary at first. The purpose is to hold yourself accountable to a goal, which can be adjusted over time as you gather real data.
Aside from providing a sales number to target, your goals help you prioritize efforts and keep your team focused on the task at hand. While your team should know when to abort a mission (like when sales or costs reach dangerous levels), you should always strive to finish what you started, whether that means proving or disproving a hypothesis.
Know who (or what) needs to be involved
Assemble the right team members before the start of a campaign. Get team buy-in as well as time commitment so your efforts don’t stall in the execution stage. Remember to have a process for “managing up” and to anticipate (as well as invite) feedback from team members along the way.
Pro tip: To avoid endless rounds of revisions, give your team deadlines for feedback and clear instructions for the type of feedback you’re looking for. Sometimes the worst type of scope creep comes from the broad question, “Thoughts?”
Last, but not least, know what tools you’ll require ahead of time to achieve your goals. You may wind up needing more from the budget for new software, or extra time to learn a new system. It’s better to anticipate these needs before embarking on a campaign than to be surprised later.
What are some customer acquisition channels? Try these 10 first
Without further ado, here are nine strategies for acquiring new eCommerce customers. You certainly do not need to (and probably should not) tackle them all at once. However, each tactic can offer a unique benefit to your business.
1. SEO and blogging
Blogging is easy to start, but hard to maintain if you’re not prepared to invest in the long term. SEO practitioners will always tell you it can take up to six months for you to see the fruits of your labor — and for that to even happen, you’ll have to commit to consistent blogging and a strong keyword strategy.
If done well, however, a blog presents a huge opportunity to build your brand authority and to bring in organic site traffic day in and day out.
Read: Why every DTC store should have an SEO strategy (and how to do it)
2. Organic social media
Social media is where word-of-mouth marketing occurs in the modern world. Just one viral post can put your brand on the map, while consistent engagement can help you build a loyal following.
Note that customers may already be turning to social media to complain about products, ask questions about your brand, perform research, or request other forms of support. They may also follow influencers in your space who could be great brand ambassadors, assuming they have a need for your products.
Read: How to use social media for DTC success: Influencers, engagement, and customer support
3. Brand partnerships
Brand collaborations are a powerful way to tap into new, established audiences. Just like with peer-to-peer recommendations or influencer marketing, a trusted brand can influence consumers to consider a new brand like yours.
There are many options in terms of brand partnerships: product collabs, co-hosted events, blog swaps, newsletter shout-outs, or all of the above.
As you consider other brands to partner with, make sure you can provide value in return; any marketing collaboration should be mutually beneficial.
Read: How eCommerce sellers can use DTC brand partnerships to boost reach and sales
4. Influencer sponsorships
Working with influencers delivers more for some industries than others, but if you find the right partnership and process, they can bring a continuous stream of customers for one sponsorship fee.
For example, if you’re in the beauty industry and sponsor a video by a well-known beauty blogger, that video has the potential to continue generating income as long as it appears in relevant search results on YouTube.
Read: Influencer marketing strategy: How to find the right partners for your brand
5. Google and social media ads
Paid social media or Google ads along with a relevant landing page can yield more immediate results than organic tactics (albeit requiring close monitoring). However, targeting options are more limited than years prior due to privacy laws.
That said, you can still target keywords with high purchase intent and interests that get your brand in front of the right people. Another (generally cheap) type of advertising is retargeting, which involves targeting an existing list of leads and web visitors. Note: each channel has a threshold for how big your contact list needs to be before it can show them ads.
Read: Facebook ads vs. Google AdWords: Which is better for your eCommerce brand?
6. Webinars and events
Events let you engage with customers more closely and associate a friendly face with your brand. You can host live product demos or offer an in-person event related to their interest.
For example, if you sell workout gear, you could consider hosting a fitness class that incorporates your equipment.
Events allow you to collect contact information, engage customers in a fun way, and form deeper connections. Clips from these events can then be repurposed across your social accounts, blogs, or emails to spread brand awareness.
Read: How DTC sellers can use webinars and events to boost their brand (and get more sales)
7. Email marketing
Email marketing goes hand in hand with both paid and organic acquisition tactics. With email, you can keep your brand top of mind and consistently engage prospects with content that’s tailored to their interests.
As an eCommerce brand, you also have the unique opportunity to use purchase-related messages (like email receipts, which get high open rates) to suggest other products or promos, as you would in a newsletter or drip emails.
Read: 7 Keys of eCommerce email marketing
8. Referral programs
Referral programs are a great way to nurture existing customers into brand ambassadors. They can be as simple or advanced as you want them to be.
For example, you can offer a discount prize in return for a referral, or launch a full-fledged loyalty program with various rewards for different actions.
Referral programs help you gain new customers as well as keep existing ones engaged and involved in your marketing.
Read: How to launch a referral program for your eCommerce brand
9. Giveaways and contests
These limited-time events are often used to collect user-generated content (UGC) that can be displayed as social proof on your site.
You can ask customers to post a photo or video of them using your products for a chance to win a prize. Pair this with a hashtag or a “follow” campaign to glean even more ROI from your contest.
Read: How to boost eCommerce conversions with giveaways and contests
10. Host livestream shopping events
Live shopping is when you stream product demos live on platforms like Instagram and TikTok, then allow consumers to purchase from you on the stream. For example, you could be showcasing a new product release on Facebook Live, drop the link to the product if they want to purchase, and then answer any questions that come in on the stream as well.
This provides a more interactive experience for your customers and potential buyers, where they can see the product in action, ask any lingering questions, and interact with your brand directly.
Read: Live shopping: How to use livestream videos to boost eCommerce conversions
Wrapping up: Build a DTC customer acquisition plan
Don’t wait around for your customers to seek out your brand. Proactively find and approach your consumers using a combination of the strategies above. There are countless tools, channels, and tactics you can choose from — don’t let them go to waste!
Facebook ads vs. Google AdWords: Which is Better For Your eCommerce Brand?
This is a guest post from Brooke Morrow. Brooke is a Paid Marketing Manager at Kaspien, an eCommerce company that offers a full suite of seller tools to help brands sell online. Brooke has years of experience running advertising accounts across Facebook, Google, Instagram, Yelp, and other social platforms for Fortune 500 companies and local businesses across the United States.
Customer acquisition can make or break an eCommerce brand, and it’s important to learn the latest technologies and developments to stay on top of it all.
Tools like paid ads help you reach potential customers in the most effective and impactful manner, but they don’t come for free.
If you have a limited marketing budget, how do you decide which platform you should allocate your marketing budget to?
Facebook and Google are the most powerful digital advertising platforms available. Who doesn’t use Google daily to ask questions, research products, and find what they need online? When it comes to social media, Facebook is just as ubiquitous.
Because of their prevalence, your brand should advertise on these platforms to meet your customers where they already are. Both Google and Facebook help brands build awareness, positively influence buyer behavior, retarget website browsers and convert them into buyers, and provide multiple pathways for purchases. And that’s just the tip of the iceberg.
If you can only pick one, which is the right choice? Before we can answer that, it’s crucial to understand the primary differences between the two ad platforms.
Differences between Google AdWords and Facebook ads
Google AdWords: Paid search advertising
As the name suggests, Google AdWords is a PPC advertising platform primarily used for search text and display ads. These ads appear for advertiser-selected keywords or phrases related to the product or service being sold.
Paid search focuses on targeting keywords and the use of text-based advertisements. For example, if you sell dog toys, you could use Google AdWords to bid on terms like “dog toys” and “toys for dogs.”
Then, when consumers type in a search query containing these phrases, your text-based Google ad has the chance to populate. If users click on the ad, they’re directed back to your website. Google ads are ideal for consumers in the product research phase.
Facebook & Instagram: Paid social advertising
Facebook Ad Manager (including Instagram, which is owned by Facebook) is a PPC advertising platform where you can run visual ads that show up in users’ Facebook and Instagram feeds, in addition to other places.
Besides the ads displaying on Facebook and Instagram instead of Google (obviously), Facebook’s main differentiator is its inherent visual element that doesn’t always carry over in Google ads.
eCommerce brands must create visually compelling image and video ads to capture potential customers’ attention and get them to click. This makes Facebook an ideal platform to increase brand awareness and engagement.
When to use Google ads
If you’re a product-based company, we recommend starting with Google ads before any other ad type, even Facebook ads. Search-based ads are designed to appear only when a user enters a search term relevant to your brand, which means you’re more likely to reach a relevant audience.
Shoppers want to learn more about the product they searched, so Google ads are a great way to reach them and lead them down the path to purchasing.
There are a few Google ad placements you can use to reach shoppers who are in this product research phase.
As previously described, these are keyword-based campaigns. Users search for a term on Google, and the advertiser that has the best quality ad and the highest CPC bid wins the ad auction.
That advertiser’s text ad will then appear at the top of the Google search results page.
Text ads are the most common ad type used within Google AdWords, and some of the most effective for eCommerce brands.
Google display ads
Display campaigns show graphic-based ads on relevant Google partner websites and apps.
This ad type tends to have a lower click-through rate than text ads, so it’s best used to increase brand awareness and/or retarget consumers who are already familiar with your brand.
Google Shopping ads
Google Shopping ads let eCommerce brands show off their products to people searching for hyper-relevant product keywords.
This ad type is a major opportunity for product-based brands who have Google Shopping listings.
Advertisers can also run video ads within Google. These ads can appear on video streaming platforms like YouTube (which is owned by Google), and in Google display networks.
They’re ideal for retargeting people already aware of your brand, such as shoppers who added an item to their cart, but didn’t purchase.
Google ads retargeting
Retargeting ads focus on users who visited your website’s landing pages or were part of a customer list the advertiser uploaded.
Naturally, this is a smaller audience, but one that will be presumably more interested in your offerings (and thus more likely to buy).
Google’s various ad placements means there’s a way to target customers at every stage in the buyer’s journey.
If you have a limited budget, however, we recommend starting with text-based keyword campaigns. You can then expand to display and video ads as you test the model and justify a larger ad budget.
Google ads considerations
Google ads provide the most benefit when used in conjunction with a good website. That means your website is rich in product keywords and primed for customer conversion.
Google uses something called a Quality Score, which rates the relevancy of your ad and landing page to someone searching for one of your keywords. So, your ad and landing page are just as important as the keywords in your Google campaigns.
To boost your Quality Score, optimize your website landing pages with keyword-dense product copy, product photography, and videos.
Another important consideration is customer profile and audience filters. If you’ve already built a strong customer profile, you can narrow the audience for your Google ads based on location, interests, and demographics.
We recommend beginning with this tactic only if you’re confident in your customer profile. Otherwise, start your campaign without any location or demographic filters, and add them in over time.
When to use Facebook ads
Facebook is known for its social and app network, but it also offers many opportunities from an advertising perspective. Unlike Google, Facebook users traditionally don’t use the platform to search for products (with the exception of Facebook Marketplace).
As such, it’s vital to have a thorough marketing plan to capture consumers’ attention before you start allocating an ad budget for the platform.
As the leading social platform with more than two and half billion active users, Facebook allows advertisers to target any niche or demographic within their target market. This is Facebook’s primary advantage over Google: its demographic-targeting abilities.
You can use these filters to create Facebook and Instagram ads that target consumers who aren’t aware of your brand.
Keep in mind, these individuals haven’t approved any advertisements from your brand.
That means, to give your ads the best shot at success, they should surprise and delight instead of giving a sales pitch.
You can also use Facebook and Instagram ads to target other audiences. For example, website visitors who didn’t convert, or retargeting existing buyers with the goal of gaining repeat customers.
How to choose your Facebook campaign objectives
Facebook and Instagram ads offer powerful advertising options for every stage of the buying journey. Ideally, you would set up campaigns for each.
However, if you have a limited budget, try starting with a product conversions campaign targeting your ideal customer with Facebook’s demographics options. This is an easier entry point into the ad platform for advertisers with limited data.
If you have the budget to run multiple Facebook campaigns that target different audiences, here’s our campaign structure recommendation:
Unaware of your brand
For consumers who don’t know your brand, set up campaigns with either the brand awareness or traffic objective to get your name out there and drive unaware consumers back to your website.
Aware of your brand
Create custom audiences from your website visitors, Facebook page followers, and other custom lists and set up campaigns with the conversions or product catalog sales objectives. These campaigns focus on bringing those consumers aware of your brand back to your website to purchase.
Encourage repeat customers by using dynamic ads and the product catalog sales objective. These can showcase complementary products to what they’ve already purchased. Or it could show video ads to get them excited about a new product they may love.
Facebook ads or Google ads: Which is better?
It depends on your goal. Both platforms offer effective ways to target consumers at every stage of the buyer’s journey.
We recommend using both as part of an integrated marketing strategy.
In our experience, Google ads are best for targeting buyers who are in the product research phase. Facebook ads are best for increasing brand awareness among new shoppers and retargeting existing customers to encourage repeat purchases.