What are Sales Channels and Which are Best for Dropshipping?
Video transcript: Hey everyone, it’s David with Oberlo, and it’s Q&A time. This week, we’re talking about a question that every dropshipper has asked at some point: What’s the best sales channel to market my dropshipping store? First thing’s first: What is a sales channel? Well, a sales channel is […]
Video transcript: Hey everyone, it’s David with Oberlo, and it’s Q&A time. This week, we’re talking about a question that every dropshipper has asked at some point: What’s the best sales channel to market my dropshipping store?
First thing’s first...
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What are Sales Channels?
Well, a sales channels are places where you can market and sell your products. This can include your ecommerce website, physical stores, or general marketplaces like Amazon. There are also bidding sites like eBay, social media platforms like Facebook, and many, many more.
Now, lots of sales channels are not a good fit for every business. So, how do you work out which one is best for you? That’s what we’ll talk about in this video. We’ll look at what you need to take into account when choosing a sales channel and we’ll look at the potential pros and cons of some of the major sales channels out there for dropshippers.
What You Need to Consider When Choosing a Sales Channel
First, who are your target customers? Do you sell it to a wide demographic, or are you targeting a very specific niche? For example, if you sell workout equipment, Instagram would be a good sales channel to test out because fitness is a popular niche on the platform, and the platform itself is dominated by younger people who are likely to be more active. But if you sell mobility products for older people, perhaps a trusted general marketplace, like Amazon, would be better. Bottom line, knowing exactly who you’re targeting is extremely important when choosing a sales channel.
Secondly, would somebody buy your product on impulse, or are they likely to do some research before hand? For example, think about when you go to the store to buy groceries. The vegetables that are on your shopping list, those are a planned purchase. But that little tub of chocolate ice cream that you pick up on the way out, that’s an impulse buy. Now, Facebook is a great channel to promote impulse buys. Why? Because people can see your Facebook ad in their feed, click and buy the product within 30 seconds. But if you sell more expensive items, customers might want to do some research before buying. And in this instance, having your own ecommerce website that people find while they’re doing research might be a better option.
Lastly, you need to consider the fees that some sales channels charge. For example, eBay charges fees to list products and takes a percentage of your sales. So, you need a margin large enough to pay these commission fees and still make a profit.
Sales Channels Examples
Okay. Now you need to evaluate the pros and cons of each channel itself. Let’s take a quick look at some of the major sales channels available for dropshippers today.
First up, Amazon and eBay. The main benefit of these large general marketplaces is that millions of shoppers visit them every day. This makes marketing easier, but there’s some major drawbacks. First off, you have to pay to access this large network of buyers through commission fees. Also, you’re a limited in how much you can customize your product pages. So, building a lasting brand can be extremely difficult. Another downside to marketplaces like eBay and Amazon is the lack of connection you have to your customers. When a customer buys from your own store, you’re able to start a long-term relationship with them. Marketplaces like eBay and Amazon on the other hand, actively prevent this. After all, it’s in their interest to ensure that your business is reliant on their platform. Building a long-term relationship with customers is key to sustainable business, and these large marketplaces are not set up for this.
Next up, social media channels like Facebook, Instagram, and Pinterest. The benefit of these sales channels is that you can reach your customers where they spend most of their time online. For example, you can sell directly from Facebook by adding a shop to your Facebook page. This is a great way to simplify your sales process for customers. So if you have high levels of engagement on a social platform, start using it as a key sales channel.
Best Sales Channels for Shopify
Lastly, you can create your own ecommerce store. We think this method is the best primarily because you’re in control of your customer experience and the relationships that you can build. Platforms like Shopify provide many customization options, simply choose a design team and tweak it until you’re happy. Also, if your store is built through Shopify, the designs will be mobile ready. This is super important as nearly a quarter of online purchases are made via mobile device these days. Shopify also lets you manage your business from mobile so you can build your brand on the move. Plus, if you’re interested in selling your business down the line, it’s much easier to sell an independently owned ecommerce website.
To sum up, choosing the best dropshipping sales channel very much depends on the individual needs of your business. That said, having your own ecommerce store gives you the most flexibility and control. Do you have any questions about dropshipping sales channels? Let me know in the comments and I’ll get back to you. If you’d like to see more videos like this, be sure to hit the subscription button and turn on that notification bell. Thanks so much for watching and until next time, happy dropshipping.