Here’s a scenario you may find all too familiar: You’re losing money on ecommerce. You’ve got a talented team of experts, but you’re pouring too many dollars into your online presence with very little results to show for it. In fact, you might be experiencing negative results—your prices are eroding or your marketing doesn’t seem to be working or your D2C doesn’t seem to be performing well enough for you.
Soon you’re having to invest not only in your team, but in ancillary platforms and software, agencies, temp workers, and contractors to do the work your ecommerce team seems unable to do. When your D2C is pulling about 3% of your overall revenue, these costs feel excessive. Why wouldn’t you just focus on retail instead? Or marketplaces? Most of the money found in ecommerce is coming through marketplaces like Amazon, Walmart, and Alibaba, but you may find that steering your ecommerce team towards marketplaces only amplifies problems.
Your ecommerce team will start asking you for more help and more resources. When you’re not seeing that big of a return on ecommerce and are suspicious that it’s actually messing up your other channels because distributors keep coming to you complaining about online prices, you might start to wonder if your team is any good at all. If they were good at their jobs and working hard, you’d be killing the ecommerce game, not losing money over it, right?
The Executive Dilemma
This is what we call the Executive Dilemma. It’s that rock and a hard place of needing to be in the ecommerce space to capitalize on growth opportunities but finding ecommerce is turning into a money pit for your brand, and the team you’ve hired to conquer it seems to be the problem.
The good news is that your ecommerce team is probably doing much better than you think they are. They’re just woefully over-tasked and under-resourced.
Why ecommerce teams are over-tasked
In order to thrive in ecommerce, your brand needs to be dialed in on three particular areas. We call it the ecommerce equation:
Traffic x Conversion x Price = Revenue
You need to market and advertise your product so you have significant traffic flowing to your online channels, you need to have listings that turn views into clicks, and you have to be competitive on price so that consumers will give your product a second glance.
To do justice for any of these areas, you need to have more than three people on your ecommerce team. And that’s the kicker: most ecommerce teams don’t.
A D2C is one thing—that may be totally manageable for your team—but marketplaces are far different. They operate by their own set of rules, and they can get very complex to manage.
On Amazon alone, you have to advertise on the right keywords, win the Buy Box, capitalize on promotion periods, clean up your listings and image stack so customers will be interested in your product, enforce MAP across all of your distributors so they aren’t eroding your prices, sort out shipping and packaging logistics, and pay platform fees.
To get a powerful and expansive omni-channel presence as well as control your brand online, you have to repeat a similar process with a different set of rules for marketplaces like Walmart and eBay. You have to do all these things again when you decide to move into international marketplaces like Alibaba, and those can get even more complicated with entirely different rules.
When you only have three people on ecommerce, and they’re already doing plenty of grunt work on your D2C, your social media presence, your marketing (you name it), the demands of moving into more marketplaces and areas outside of their expertise can spiral completely out of control. Without control and dedicated expertise in these areas, you open the door wide open for unauthorized sellers to erode your prices, for market share to be lost simply because of time and bandwidth, and ecommerce ultimately costs you even more on margins and revenue as you try to make up those gaps.
Your ecommerce team is good at what they do—really good, that’s why you hired them—but even a really good team can’t do everything. Without proper support, your brand will lose out on massive potential revenue growth because you’ve tasked an ecommerce team with managing a platform that is too complex to optimize with the limited resources, expertise, and data they have.
The Pattern solution
Throwing resources like agencies and more software at your team is a band-aid solution that makes sense, but only leads to more costs in the long-term. On average, brands use around 19 different software solutions to solve their ecommerce problems. Pattern offers a different approach for brands, one that lasts.
At Pattern, we remove excessive and unnecessary burdens from the shoulders of your ecommerce team by managing those extra areas they just don’t have the time, energy, resources, or expertise to manage. Unlike most agencies, which typically have narrow specialities, we offer specialized support across a wide variety of ecommerce tools and platforms: SEO, pricing control, data analysis across all channels, marketing and advertising, product innovation, shipping and packaging, D2C software, marketplace expertise for channels like Amazon and Walmart, international expertise for channels like Alibaba, and more.
With an agency, you’ll pay thousands of dollars a month and may get locked into a contract that ends up not being very beneficial to your business. At Pattern, we pay you first and offer short and flexible contract terms. Most contract terms are a maximum of only 60 days, and 97% of our clients keep working with us after the first two months based on the results they see for their brand. That’s because we put you first in every way.
What all of this means for your business is that you have support for putting out the fires that your ecommerce team would otherwise have to manage on top of all of the other invaluable things they do. That Executive Dilemma we talked about? Gone. While we take care of the housekeeping, your ecommerce team can get back to doing the things you hired them to do and the things they love, and you can get back to killing it in ecommerce.
Reach out to Pattern today to schedule a free demo of our services here.