From Third-Party to First-Party: How Your Sales Channels Affect Your E-commerce Success

In an e-commerce business, increasing conversion on owned channels (such as websites and email) is important compared to third-party channels (such as marketplaces).

When you sell through your own marketplace, you do not have to pay transaction fees to third parties like Amazon or eBay, which can mean greater profitability.

Transaction costs: When you sell through your own marketplace, you do not have to pay transaction fees to third parties like Amazon or eBay, which can mean greater profitability. However, you must consider payment processing costs and any associated commission fees.

Do you know the fees associated with selling on third-party channels?

The additional costs for selling a product on third-party channels vary depending on the channel and product category. Below are some common additional costs associated with selling on third-party channels and an estimated average percentage in relation to the product’s selling price:

  1. Commission fees: Third-party channels like Amazon and eBay charge a commission fee on each sale made through their platform. These fees can range from 6% to 45% of the product’s selling price, depending on the product category and sales channel.
  2. Fulfillment fees: If you use the fulfillment services of third-party channels, such as Amazon FBA, there will be additional fees for storage, packaging, and shipping. These fees can vary based on the size and weight of the product.
  3. Advertising fees: Some third-party channels offer paid advertising programs highlighting products in their search results. These fees can vary depending on the sales channel and type of advertising.
  4. Subscription fees: Some third-party channels may require a monthly or annual subscription fee to use their platform.

Overall, the additional costs for selling on third-party channels can range from 10% to 40% of the product’s selling price. It is important to consider these costs when setting selling prices and determining the profitability of products.

By increasing conversion on owned channels, companies can reduce dependence on marketplaces and have greater control over their online business.

Here are some ways that businesses can increase conversion on their owned channels:

  1. Improve user experience: Companies can improve user experience on their website, which can increase conversion. This may include optimizing page loading speed, simplifying checkout, and improving website navigation.
  2. Create quality content: Companies can create relevant and quality content on their website and email to attract visitors and encourage conversion. This may include posting product reviews, detailed product descriptions, buying guides, and brand-related content.
  3. Implement email marketing: Email is an effective marketing tool to increase conversion on owned channels. Companies can use email to send promotions, news, and relevant content to email subscribers and encourage conversion.
  4. Use retargeting tools: Companies can use retargeting tools to display relevant ads to visitors who have abandoned the website without making a purchase. This can remind them of the brand and products and encourage conversion.
  5. Offer exclusive discounts: Companies can offer exclusive discounts to customers who purchase on the website instead of a marketplace. This can encourage customers to buy directly on the website and increase conversion on owned channels.

Why SEO?

The SEO of e-commerce can significantly impact sales by increasing online visibility and the likelihood of capturing the attention of online shoppers.

Some highlights:

  1. According to a study by Moz, websites that appear on the first page of Google search results receive 92% of the total search traffic. This means that if your e-commerce appears on the first page of Google, you will have greater visibility and more opportunities to receive traffic and sales.
  2. Another study by Search Engine Journal found that 93% of online experiences begin with a search engine. This indicates that SEO is a fundamental part of the online purchase process.
  3. A Backlinko study found that web pages with more incoming links tend to rank higher in Google search results. This means that if your e-commerce has a solid link-building strategy, it is more likely to appear in the top search results.
  4. A HubSpot study found that 64% of online shoppers click on organic search results rather than paid ads. This indicates that optimizing your e-commerce for organic searches is an effective way to capture traffic and sales without investing in paid advertising.
  5. According to an Invesp study, 81% of online shoppers conduct research before purchasing. If your e-commerce appears in the top search results, it is more likely that shoppers will find and make a purchase from you.

In summary, e-commerce companies can increase conversion on their owned channels by improving user experience on the website, the SEO of e-commerce can have a significant impact on sales by increasing online visibility and the likelihood of capturing the attention of online shoppers. Creating quality content, implementing email marketing, using retargeting tools, and offering exclusive discounts.

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