Eureka! You’ve got it—the perfect product, service, or solution. You know you have exactly what your customer wants and/or needs, but how do you get it out into the marketplace? From Amazon to Shopify, each e-commerce channel has benefits and drawbacks. The trick is to find the right channels for your e-commerce business.
E-commerce provides a direct link between the buyer and the seller. In fact, there are so many channels available to peddle your wares, choosing one or more e-commerce partners can be overwhelming and intimidating. It can be tempting to settle on one channel – like Amazon – but that would be a mistake. Diversification allows you to reach different types of consumers and forces you to think beyond the Amazon bubble.
The truth is, while Amazon is today’s biggest e-commerce channel, it’s all too easy to become over-reliant on its e-commerce platform. Unfortunately, it only takes one mistake or one policy change for many Amazon businesses to fail. Diversification protects you from these forces and lets you conquer Amazon instead of letting Amazon conquer you. But diversification is not a silver bullet. E-commerce companies must also have accurate data that reflects the performance of each sales channel so that resources can be allocated to only those channels that generate revenue.
For example, online retailer Zentail sells digital services and products online through multiple channels, including Shopify and Amazon. Because the company’s bookkeeper could not keep up with Zentail’s volume of transactions, the company typically received financial statements three to four months late. As a result, Zentail’s owners could not determine which e-commerce channel was working for them and which one needed to be improved.
At first, Zentail attempted to rely on summaries generated by each channel, but they soon discovered that the resulting financial reports did not accurately reflect their company’s true financial performance. With the help of AIS Solutions, Zentail was eventually able to take control of the various moving parts of its multi-channel e-commerce business. After conducting an in-depth assessment, AIS was able to implement connections between Zentail’s e-commerce channels and QuickBooks Online. The result: Zentail was able to easily identify the revenue generated by each e-commerce channel and focus on those channels which produced the highest return.
When your E-Commerce company starts to experiment with multiple streams of income, it can be hard to make sense of the data and understand what is working and what is not. A bookkeeper can help by showing accurate financial information that will help you decide where to focus your efforts.
At AIS Solutions, we specialize in Shopify and Amazon and help business owners understand the workflows of the multiple revenue channels associated with running a high volume e-Commerce business. You can learn more about our Bookkeeping services for e-Commerce here.