EP.145/ CHANNEL ENGINE
Strategies for Balancing First-Party and Third-Party Sales on Marketplaces with VP of Revenue Jordi Vermeer
Mariah Parsons, Host of Retention Chronicles and Head of Marketing at Malomo, hosts Jordi Vermeeri, VP of Revenue at Channel Engine. They discuss customer retention strategies in e-commerce and how online sellers should navigate online marketplaces like Amazon and Walmart. Jordi explains the shift from traditional ERP systems to marketplace integration, highlighting the importance of both first-party (1P) and third-party (3P) selling models. He notes that 60% of e-commerce sales occur on third-party marketplaces, emphasizing the necessity for brands to be present on platforms like Amazon and Walmart. Jordi also discusses strategies for optimizing listings, such as virtual bundling and repricing, and the challenges of customer retention on marketplaces. He advises brands to focus on profitability, operational efficiency, and leveraging data to improve customer engagement and retention.
Sponsor Website: GoMalomo.com
Episode Timestamps:
4:37 Channel Engine Overview and Marketplace Integration
7:38 Niche Marketplaces and Sustainability Platforms
24:07 Hybrid Selling Models and Profitability
24:22 Strategies for Marketplace Success
34:57 Customer Retention and Marketplaces
39:35 Expansion and Growth Strategies
EP. 145
JORDI VERMEER
TRANSCRIPT
This transcript was completed by an automated system, please forgive any grammatical errors.
SUMMARY KEYWORDS
customer retention, e-commerce marketplaces, first-party systems, third-party systems, marketplace integration, brand positioning, profitability strategies, operational challenges, customer data, retention tactics, virtual bundling, return management and return tracking, ecommerce growth goals, customer profiles, sustainability platforms
SPEAKERS
Jordi Vermeer, Mariah Parsons
Mariah Parsons 00:00
Music. Welcome to retention Chronicles, the retention podcast for E commerce marketers. I'm your host and fellow e commerce marketer, Mariah Parsons, tune in as I chat with E comm founders and operators all about customer retention. Think marketing ops, customer success and customer experience, we cover it all and more. So get ready to get real with retention. Here is our newest episode. Hello everyone, and welcome back to retention Chronicles. Super excited for our guests here today, Jordi, thank you so much for being here. I'm so excited to have you. Jordi is the VP of revenue at Channel engine, and I cannot wait to dive into first party, third party systems with you. It's going to be a great, great time, and tie it all back into retention. So let's have you say hello to our audience and give a quick intro of yourself.
Jordi Vermeer 00:55
Hi. Nice to meet you, so nice to meet you again. I think our teams party together, or you third party with the team together at shop doc a few weeks ago. So happy that we're meeting in a more professional situation than Busta Rhymes, I guess. Yeah,
Mariah Parsons 01:11
it's more official now, right? Like it is. This
Jordi Vermeer 01:15
makes it more efficient. So yeah, thanks for having me.
Mariah Parsons 01:18
Yeah, yeah, no. I mean you're, I only get one of your team, you know, only get you on the podcast, but it was a lot of fun getting to meet your team. And I know you're in New York, but I'm here in Chicago, so it was a lot of fun to see, you know, the the different, you know, the different avenues, or the different the areas of econ that people came out to be at shop talk to all four so it was a great time. Great Yeah, and just hilarious Busta Rhymes concert. So who wouldn't you know rather be on the dance floor? But yeah, I'm excited for this. Tell us a little bit about your background, how you got into working at Channel engine. It's always fun to hear the context behind you know how someone finds themselves in the seat that they're currently sitting
Jordi Vermeer 02:05
in? Yeah, thanks for a question. So as you might hear, I have a bit of an accent. So originally, I'm from Europe, from the Netherlands. That's also where my previous company, where I worked for decent amount of years was situated or founded from. It's a, it was a B to B, E commerce platform called Santa commerce, and, yeah, basically they asked me to relocate to the US and start someone never here. And that was very fun. A lot of learnings gave me a lot of foundation for both software, for the commercial side of it for running teams, but also e commerce, and actually, that's where a lot of my passion is. And still, you know, keeps developing. And that's also where about three and a half four years ago, I moved to channel engine. They asked me to set up us. And so, like a very exciting opportunity. And part of the excitement was that I moved from a little bit more old school e commerce world, which is more ERP related, towards a more newer e commerce world, which is marketplaces. So you know, we even almost skipped the whole just e commerce platforms, or DTC platforms, and really went to those marketplaces, which is currently a very big trend, and I stepped in right during COVID period. And I think that's also where channel engine was like, at a boom, because everyone's purchase everything on marketplaces instead of in store. And, yeah, I think that was a very exciting time.
Mariah Parsons 03:38
Yeah, great time to get into it right, or at least be in the midst of it. So for our listeners, because our listeners are anywhere from, you know, expiring entrepreneurs just building out their own e comm brand, or, you know, some of the leading e commerce enterprise founders and brand operators. So give us a little bit of a synopsis of or synopsis of, like ERPs, and then marketplaces, like pros and cons to each of them with that, quote, unquote, older e commerce to newer e commerce transition.
Jordi Vermeer 04:15
Yeah, I think it's there's a ton of different companies where what their history is. So there are, let's say, the traditional B to B manufacturing type companies where I used to work with more that is still a group we work with. So think about the Unilever or electroluxes of the world, and they are now trending into their marketplace endeavors, where at the flip side, you have full D to C only brands like an integral or launch like, those brands are like more deep to see focused, and they're going so fast and so hard into the market, and they're very smart about it. So it's very interesting to bring those or to see both of those angles, and there's everything in the middle. Right, smaller companies, one person organizations, or very large corporations that are still trying to figure out, what is the to see, or what could it mean for them with customers like Sanofi or opella, they rebranded, and they they're they're in the start of their TTC endeavor. And that's those are all, like, very exciting ways to help organizations. And, yeah, that's where you also see the often younger people, or, you know, more fast moving people from the DTC brands, they get into those larger organizations and, like, disrupt things, because DTC is, of course, the third party orders is, or sorry, third party stash, the DTC orders are a lot more, let's say, often higher profits, but but a lot more operational is needed in order to facilitate them. If that makes sense,
Mariah Parsons 05:54
yeah, yeah, for sure. I think that that'll resonate a lot with our audience. So tell us now that we kind of have the basics of your background. Tell us more about channel engine and your like, day to day responsibilities, and then we'll get into our thought leadership, you know, section of the podcast,
Jordi Vermeer 06:13
yes, channel engine is a marketplace integration and management platform, so we help brands and resellers globally to connect to over 9/53 party sales channels. Think about Amazon, Walmart, eBay, but also smaller things along the way, or newer ones, like Macy's Kroger Best Buy target. Those are all in us, and there's hundreds and hundreds in other regions that we facilitate and we help those brands and resellers to not only list their products, but also optimize it, do better in sales, run their pricing, inventory, promotion, a lot of back end operations in order to make sure full end to end offering for those marketplaces. Yeah, wonderful. That's usually the complexity that that these brands get into, and we're trying to help
Mariah Parsons 07:04
resolve it. Yeah, and each marketplace has their own, you know, Amazon being one that I think most consumers will be familiar with. If they don't have a subscription, then they at least know of it, right? So we use it as an example. But each of those marketplaces that you listed, or an Etsy or Macy's or Kroger or anywhere else target, they each have their own special, I guess, requirements where you can optimize your page to do well on each of those marketplaces, which I don't think unless you're in, you know, in the seat that you would care about understanding those algorithms. So the normal consumer probably wouldn't know that. So, and I just actually recently learned that there are also marketplaces which correct me if I'm wrong, I want to hear your opinion on this. But there are marketplaces for certain types of businesses, whether it's, you know, minority owned or, like, specific types of products, right? Like, I did not know there was, there was different marketplaces for, you know, founders who like women founders, or for black founders or Latina founders of just like, their marketplaces specifically made to support the, I guess, type of person, the type of founder. So is that something that you all like? Did I just pull that out of thin air from No, no, I think, I think
Jordi Vermeer 08:26
there's, there's, there's a lot of like, also preference of working with certain groups or minorities. What we see even more is niche marketplaces. So, so there's a lot of holistic or general marketplaces, like Amazon, Walmart, where you kind of can buy anything from anyone. But there's also a lot of niche marketplace that's best that they are specializing in a certain category or industry, as sometimes even a certain offering, where it's just off pricing. So you have a Premium Shop outlet, it's a marketplace where it's it's even behind closed, the closed login, where you can see and, but that, that's where you get off, off priced second or, like, off price, sometimes premium products. So those are some of the examples where eBay has a whole eBay motor section for all everything automotive and so there's, like, a different industry, different interesting parts,
Mariah Parsons 09:26
yeah, the more you know, right? Like, I didn't, I didn't know that until, quite literally, a couple days ago, and I was like, Oh, that's so interesting. I mean, I guess
Jordi Vermeer 09:35
another one, another one maybe interesting. Also in terms of sustainability, which is a pretty big trend, are platforms like back market and re below. They offer second hand or refurbished, like consumer electronics products, which kind of revives those products. But it's like, specifically, those platforms are really good at it, yep,
Mariah Parsons 09:54
and like, thread up is another one for apparel, right where it's like, they will re resell. I. Are items that people, you know, send in because they need a second home, and they're just, you know, they want to recycle them responsibly, all that fun stuff. Okay, well, that's a great industry layout. So now we're going to move into some of the questions that I love to pick your brain about, just because it is something like marketplaces, usually, we are focusing more on specific, you know, like selling d to c. So, but marketplaces obviously still sit in E commerce, and they're super they can be super influential for a brand strategy, right, whether or not a brand is starting on a marketplace like Amazon and then transitioning into DC or social commerce or some other combination. So it's definitely a relevant conversation. So I want to talk about hybrid selling models, and so first party and third party strategies. I want to get your opinion, because they're becoming popular, right? Of like, you see people who are selling on Amazon, you see people who are selling D to C, and you see people who are selling online. Maybe they have a different combination of, you know, selling bulk items on Amazon, but then individual items on their DTC site, whatever their whatever strategy makes sense for selling across all these different channels. So can you share insights on how Shopify brands specifically can integrate, effectively, integrate and balance these models to drive profitability and sustainability? The tough question? Yeah,
Jordi Vermeer 11:26
it's a tough question. Maybe I'll, I'll add a little bit to the first piece you're saying why marketplaces are important. Maybe that's lays the foundation. So maybe as a foundation, we call marketplaces third party, which means you're selling it on a platform, but you're the seller of record, so you're still selling the product. You're sending the product, typically, to the end consumer, directly, yourself, first party, or 1p is or more the vendor model, that's a B to B transaction. So you're selling it to Amazon, and Amazon is selling it for you. So that's kind of like the difference between those two, before I dive into, before I dive into, what is like, what is the strategy there? I think it's very good to understand in terms of marketplaces. What we're seeing is the share of marketplaces that is happening globally in the wider or total online purchases. So the total e commerce almost 60% or it's trending towards like 60% is happening on third party marketplaces. So it's not only like a like, a potential option, it's a necessity. If you're not like, if you're if you're an E commerce brand, or you're selling anything direct to the consumer. If you're not on marketplaces, you're missing out on a lot of business. And usually companies do that very consciously. So think about Nike. They very consciously said, we are not going to sell anything on Amazon. So this is why, if you if you search for Nike on Amazon, you can't find any of the products. Sometimes you can find them, but they usually try to kick them off, because Nike consciously says we want to protect our brand and not sell Amazon. Now they regret that decision a little bit, and they're going back to that strategy. And potentially, you know, the I saw that they were looking into having a relationship with Amazon again to sell their products, because for a long time, the mostly searched thing on Amazon was Nike. Wow,
Mariah Parsons 13:26
that's so interesting. It really is, like a case study on psychology, right, where it's like people are searching for this thing. And is it better or worse for Nike to be like, no, no, no, you have to come to our site to buy online.
Jordi Vermeer 13:38
It's actually most of the product searches already take place on marketplaces. So more people search first for a product if they can find it on the marketplace before they start Googling it. So that's kind of like also a lot of the product discoveries happen there. And so that's some of those trends where also large e commerce platforms like Macy's, they opened up to having any, like, a lot of people sell their that's why you see the offering of Macy's expand and she know, Sheena and Timu, who are, like, going into this market full face, super fast. The funny thing is, they also are now like, Okay, now we want to have also the good products, the American products, the higher quality, bigger brands, they're opening up as well. So there's a ton of very fun, interesting facts that going on now. One of the, or some of the to get back to the 1p 3p type of strategy, we're seeing that, particularly using Amazon as an example, 1p has traditionally been a very good model, because you can sell to Amazon, and Amazon can simply just, you know, guarantee your they're paying for it, and they're going to sell out with their algorithms, which was fun and done and really good for a long time. But what those brands and resellers have been seeing is that Amazon. Has been kind of scrutiny them more and more. So the margins are lowered. The they're not purchasing as much as they used to, and it all was because of the aftermath of the supply chain issues. Right after the supply chain issues, Amazon, everyone was like, Hey, I don't want to purchase. I don't want to risk that much buying inventory anymore. So that that's forced a lot of people's hand to and now around almost 80% of brands, they're selling both 1p so to Amazon and 3p on Amazon. Okay, and then, and there's a like, I can dive into more depth if you want, but there's a lot of reasons why you could. You would want to combine both?
Mariah Parsons 15:43
Yeah, no, it's interesting. And I would like to, I think it would be interesting to hear why you'd want to sell both, because I think that one of the things that it's obviously tricky to figure out, like, Okay, where is it best to sell, right? Is it better to be like a Nike who says, you know, I'm not going to sell on Amazon because it makes sense for my brand, or because, you know, whatever reasoning you don't want to sell. But then for the people who are looking to sell on marketplaces, how do they assess, Okay, which one is best for me? Do I do a both 1p and two or 1p and 3p approach. Or do I just do one of the one of each? Like, I would love to hear, yeah, kind of, like, high level of how you try and break it down, or how you all recommend to people, like, Okay, if you're in this stage of the brand, or if there's, you know, you're in this vertical 1p versus 3p works really well. Is there any type of, like, guidelines for, you know, how a brand would actually decide if they wanted to be one or 3p?
Jordi Vermeer 16:47
It's, I'll dive into it. But my the Longshore of the short is it is quite complex.
Mariah Parsons 16:56
It always is right. It's never easy. The problem
Jordi Vermeer 16:59
is, it's very it's a it's it's a combination of strategic choice and and rational choice. So on one side, let's start with rationality. So rationality is like, it's simply profit, right? So how much profit am I going to make? Is Amazon good enough on the 1p side? Or do I need to 3p or can I get more profit on Walmart. So does my advertising cost is that lower on Walmart, which typically is than on Amazon. So why are people spending so much money on Amazon versus Walmart? Because the cost per click is simply lower 40% of Walmart, right? So that's some of the strategies, if you look at it from a very rational perspective. But then a lot of these companies are brands, or they're larger corporations, and they're like, they they have a brand image, or a, you know, a brand presence they want to portray, right? So some companies don't want to have their brand associated with or just, you know, a lot, we get a lot we get a lot of, yeah, we that we don't want to associate with Walmart, so we don't want to be a Walmart High and High in fashion rents often was, in reality, a lot of expensive products are Walmart, and people don't. People still think Walmart is a low priced type of platform. So that's kind of like some of the perceptions, and that's why that's also comes into play with choosing what is the channel that you would like to go towards, what is like the what is a, you know, sex Fifth Avenue, technically, is also a marketplace. They're very closed off, and they usually don't allow a lot of people on there. But yeah, if you as your as your brand or blooming deals, same thing, right? Everyone wants to be in blooming deals. No one gets accepted on Bloomingdale's, but if you can get on there, that's like part of that strategy where you want to associate your brand with so that's like, in a lot in a nutshell, a little bit some of the considerations, and maybe the last piece is the operations. So doing 3p or marketplaces is sometimes causes like some operational complexities, like doing D to C orders versus doing bulk shipments for larger corporations that always have done B to B. It's, it's pretty challenging to suddenly figure out. So then they're going to need, you know, platforms like ourselves, or they need three pls. And maybe they need an agency that can control some of the content. Because you're in control of your content, you need a pricing strategy. So there's a lot that comes into play from an operation perspective, but ultimately, theoretically, in the third party marketplace world, you should be able to because you have more control, you can also achieve higher profits and still be dictate more what you would like the world to see. And I can tell you, some brand owners are pretty frustrated with the one piece side of Amazon, because some of those listings are pretty bare bone and they don't make changes if you ask them to. But yeah, that's that's part of it. Yeah,
Mariah Parsons 19:57
yeah, no. It's so fascinating. And. Definitely where my expertise starts to just not cover, of just like the marketplaces and all of the the interest like intrinsic and intricate aspects of marketplaces, which is why I'm so excited to have you here. And it's already just so fascinating to hear kind of how the underpinnings or the workings of it all right? Of like a brand just having to figure out all, all of it, especially after, you know, generically, I would think marketplaces are just easier, because most of the time you're not doing the work you're you're doing as compared to a D to C site. And I know we hit on right? Like trying to be profitable. And I think that is, like it always, it always comes down to profitability, right? Like it is, even if it's a long term play, like something like sustainability, if you want a brand like, you're part of your brand presence. As to sustainability, you are also making that decision in that it's going to be profitable at some point for your brand if you find the right customers. Um, because that's just, it's, it's what a business needs to do, right? It needs to be operating in a way that is effective. And I think profitability sometimes gets a negative connotation, that that's like, deceptive or bad or, you know, like going for the money, but I think there's a way you can be profitable in which customers are like, No, I very much love the approach that this brand takes, whether it's on a marketplace or their DTC site, and that's why they shop with them, right? Like so.
Jordi Vermeer 21:35
But it's also that that brand positioning, that you have control of it, that you know where you can sell it, that that gives a certain brand image of Sustainability, for example. And I think that's you want to be in control of that basically,
Mariah Parsons 21:51
yeah, yeah, for sure. And you know all of the the benefit of E commerce when you like boy, one aspect, when you boil it down, is the benefit of being able to directly e commerce, meaning DTC, is directly like, have that brand presence, right, like your branding is more important than, say, before E commerce, like shopping and retail, because it is something that you can be directly in someone's inbox, you Know, their email or their text messages and all that. So it's a fun it's a fun area to see how someone the challenge to bring branding into a marketplace when maybe you would have more restrictions around what the listing can look like. But I do want to circle back and and ask you about, you know, what can founders, and I want to dive into, like, a little bit more of the technical aspects due to oper to optimize operations and enhance those profit margins in a competitive market, because I think you laid the ground work for like, what are the factors a founder or a brand offer operator would be considering, but then actually going into like tips or key strategies of like, okay, if you're trying to work through how to actually look at being competitive on a marketplace when there's you know, you're going to pop up next to your competitors when someone is searching for, you Know, a related keyword, how how do you all look at, you know, I see XYZ competitor, and we need to stand out for this brand positioning, or this price, or XYZ, like, how do you start to, kind of, I guess, audit a listing on a marketplace to improve it?
Jordi Vermeer 23:38
Yeah, so I think there's, there's two sides of it. Right one side is pretends a lot on just generally SEO, optimizing listings or doing keyword researches and stuff. We're doing less of that. So usually it's something that also agencies get involved in. We always advise like, or you need to see like, how much or what segment of your products should you do that with? Because a lot of companies like do everything for all my products, but that's not always the best, right? You see, we say, focus on your top 20 and test with the rest, and then see how much more you can add to that top 20. Where, where I know a lot more about, or where we actually do a lot with is maybe it's good to understand the concept of a Marketplace is where you you have a Buy Box. So on Amazon, it could be one or multiple sellers selling the same products, right? So I don't know, sometimes you see it on the right side, you can see, see more buying options, and you can see four other prices you can buy it for, but it's the same product. So this is part of the very competitive landscape, because a lot of people are trying to sell the same products in particularly certain industries like vitamins. It's so competitive, everyone is selling it super. Margins are getting pretty thin, so that's part of. Uh, having marketplaces you can you can combat or set up a strategy to win the buy box. So we, for instance, have a repricer that goes down in price until you win it. And there's no other offerings. It goes up in price to maximize your profit. So that's part of the reason, or part of the way, how you can be competitive. There another thing is, you, you should make sure you set your base price correctly. A lot of companies struggle with calculating that, because you need to take all the factors into into consideration. Your seller expenses are a little bit higher, right? Because you do have a marketplace commission you have to pay, you have a shipping cost, and you might pay a platform like us. So you, you know you have operation, other operational costs that you want to take into account. And then, by the way, you also want to have a margin. So make sure you set up or you calculate that base price correctly. You keep evolving that over time. Then something we do a lot is virtual bundling. We do do it for all industries, but often for CPG or FMCG, as well as fashion apparel, is where we bundle products together and we create a new product. It's a virtual bundle. So in the back end we, you know, we basically split the order and, you know, it's still the three different products we sent to the warehouse, but on the marketplace, it shows us, Hey, this is a combination or a multi pack, right? So you see a marketplace a lot multi packs for lower price products in order to maximize or increase your average order value, and therefore decrease the cost per order, and it grows the profit. And lastly, maybe most importantly, is insights. Make sure that your data is correct, that you know what's going on, that you can make your PNLs correctly, that they will evolve and change over time. Make sure you know what's going on from a sales perspective, inventory perspective, and track everything across the board, because otherwise you're going to be lost. Yeah,
Mariah Parsons 26:59
yeah. Okay, that's just side note, because I didn't know, like virtual bundling. I haven't had that term. I know, like it is sometimes more profitable if you can have a higher AOV, especially for something you know, where you're selling, like, vitamins, right? If you're selling multiple different types of vitamins, then if it's usually, like a 10 or 12 or $20 jar, if you can obviously make it so that there's multiple then having higher AOV, then you get more profit on that. But then the back end being, you know, it's not like disrupting your normal fulfillment process is is fascinating. So the
Jordi Vermeer 27:41
last one I actually forget, forgot is a lot around returns. Certain industries have high return rates, and you have to think of it from operational costs, right? Bundling two products together and sending it to the same address, the shipping cost is exactly the same, which is often 15% of the product. The how much of product cost so similar for returns. It's even worse, because you you just have to give a full refund, but you have all the operational costs of sending products and receiving them, you know, return labels and all that kind of stuff. So how are you going to make sure you limit or lower the return rate of your products in order to make sure you increase your profits?
Mariah Parsons 28:18
Yeah, and so are you saying like you would count to for brands to calculate that in the price, or you're just saying that's another aspect to both
Jordi Vermeer 28:26
both so you can calculate it, or you should calculate it in your price and make sure you understand that, but also track what products are the highest return products. Improve your content and make sure that they get returned less. Or sometimes this is pretty harsh. Stop selling them, yeah? Because, you know, if those are the ones that actually cost you more money, we had a client that they were doing 10 million, ultimately, we advised them to stop selling a certain product. So they doing 9 million in revenue, but their profit doubled. Wow. So it's like it was just kind of like a silly, yeah, that's just from a data perspective.
Mariah Parsons 29:04
It's one of those things where it's like, the numbers, you hear that, and you're like, Wait, how? But then once you actually look at the numbers, and you're like, No, no, it's just more efficient sales. Like, you know, it's
Jordi Vermeer 29:13
stop selling those products, because doesn't make sense, yeah? Or create certain products for certain marketplaces with clients who created special products to sell on Amazon. That's some of the things as strategies to make it more complicated, too. Yeah,
Mariah Parsons 29:29
yeah. No, I definitely know some brands who, you know, have used the benefits of marketplaces. And then, you know, selling, like a selling certain products, and then when they start to branch out, then going the D to C route and all you know, there's a whole there's a whole strategy that we do not have time to get into today, unfortunately. But the point of returns this episode will be out before this one is so our listeners will listen to it. But we recently had. Um, we recently had the conversation on the podcast around just how much returns can really make or break the profits or the operations side of owning having your brand and the it's inventory costs at the end of the day too, if returns are just sitting there. So that conversation is more about, you know, how do you like returns management? But it's a great, great, great call out for this as well. Of you're going to get returns from marketplaces. So how do you integrate them and make sure that they're back on the shelves and put into the like base, base price on a marketplace, and understanding all of that so, so it's a great call out,
Jordi Vermeer 30:43
just just to understand the magnitude of it. There's some channels in Europe where the return rate in certain countries for certain categories is between 50 and 60% crazy. So we have clients who stopped selling there because also the the approach of that marketplace, which is why they're the biggest in fashion in Europe, was because you could just free returns, very easy. You get the return label included. People just order three sizes and sent back whatever they doesn't fit. So it's like, it's a really good consumer model. It fits the, you know the generation really well of not having to leave the house to buy products or goods, but, but the flip side is that the brands need to take that into consideration.
Mariah Parsons 31:30
Yeah, no, that's great. I learned that that's actually called wardrobing When you know people that I know, I learned something. There you go. Okay, we're learning new terminology here. Um, yeah, because that, you know, you try on, like, your true size, and then probably, you know, size, smaller, size lower. You order those, try them on, and then see, and then, you know, send back the others. Um, so that's a learning from that. Not sustainable,
Jordi Vermeer 31:53
by the way. As a consumer, I call out consumers for it a little bit, because it's not sustainable. No,
Mariah Parsons 31:59
no, it very much. Is not you're paying. There's a lot of yeah, just the missions and the packaging and the all of it, yeah, it's not, it's not the way to be. Just hopefully websites have a good size chart, and like all you know, a lot of times this is with apparel or something you try on that people wardrobe or wardrobing is a problem. So yeah, just be as consumers. It's on us to be a little bit smarter, but that is a whole other episode, and everyone can go listen to it to learn more about that. So I want to talk about just when, because we're obviously talking about marketplaces over this episode. But when should a brand really consider launching either multi channel approach, or if they've been considering, you know, expansion into a different either, either into marketplaces in general or a different marketplace, or, you know, one versus 3p. How? How does a brand even approach that? What are some of the best practices that you and your team as experts can share with our audience.
Jordi Vermeer 33:07
That's a good question, also complex answer. But I think in general, usually companies start to note when they want it so when they have usually it's it all comes down to growth goals. Brand wants to grow faster than they're growing on their DTC website, you're going to need that the traffic that hits those websites in order to grow. So that's usually a trigger that could be specifically in a certain industry or a certain region, right? So it's like, hey, I want to launch in Europe, but I don't you know, people are not hitting my website. How? What do I do? Right? So that's, that's part of it where that's really starting with marketplaces. Venture into like, Hey, I'm doing Amazon or Amazon or Walmart. But what else is there that that goes a little bit more into that? Hey, how often do you also want to grow, but also, what are your potential profitability that you can reach in certain platforms? Right? So, as an example, Tiktok shop commissions of that, of them are much lower. So we see certain companies, they they can spend a lot more advertising, or they get, they give more discount on Tiktok shop because they have lower seller fees or and they're doing really well. So, you know, sometimes they prefer even selling on a Tiktok shop over Amazon, because they get more margins, and Amazon is just a crowd of space, and everyone's selling anyone anyway, and the advertising costs a lot of money, so it's a combination of that growth or profitable growth, in order to that that would trigger you, yeah, making selections or which platforms are good for you, that that needs a little bit of expertise. So asking those questions, and asking companies like us, or sometimes market agencies, or just doing your research, seeing what are the conditions of these two. Channels might help you. Yeah,
Mariah Parsons 35:01
a lot of like founder groups too. I think there's a lot of resources. So finding you know someone who's done it before is usually a pretty good place to start, and then going to industry leaders like you all should just be like, okay, technically speaking, how do I start to even do this? Because it can be, it can be a lot to undertake. So I was just start,
Jordi Vermeer 35:23
like, also start it, test it, see how it goes, right? It's like, yes, you need to invest some time and learning it, doing it. But also, if you if you never try, or if we have enough companies who are like, postponing and postponing and they're just not starting it or not trying it, and it's like, yeah, you're gonna always research things and never do anything. So I'll let someone just start it,
Mariah Parsons 35:44
yeah. It's like decision indecision, or like decision paralysis, or whatever the cute little thing is, yeah, yeah. That totally makes sense. So I want to also just tie this back to customer customer retention, and we'll just hit on this really quick before we wrap up, just because I know that there's a lot of focus, obviously, on acquisition, and that's what the majority of this conversation has been of, like, how do you grow How do you get into another channel? How do you optimize it? How do you get that consumer? And I want to talk about, like, how marketplaces can help retain customers, because I think that's something that maybe scares founders of going into marketplaces. I've heard a lot of founders talk about, like, you know, I've started on a marketplace and then tried to transition to D, to C, and it's, it's difficult, because I can't get that consumer data that I want to interact and retain those customers. So what would you what would you kind of say to someone who's struggling with, you know, customer retention, or trying to figure out their retention strategy along with the marketplace strategy?
Jordi Vermeer 36:53
Yeah, that's a good question. There's different strategies. You can different ways you can do this with it is more challenging, right? So just to just to be honest, there's, there is a gap, because often you don't get that email address. You get a randomized, anonymized type of email address, and that's it, which, which causes you to not be able and usually even probably, if you get the email address, they don't allow you to suddenly start emailing them and stuff. So a second strategy that we sometimes see, which is also tricky, is when you're sending packages to include flyers or offerings to like, hey, 10% discount on our website. Also that is technically not allowed. We still see people do it, but it's just like, how can you trigger them from buying one product somewhere to to buy the rest of the products on your website. However, we have seen customers do it pretty successful, where they where they have one of their or some of their smaller products on the marketplaces, but their main product offering, so actually, Sonos is a client of us, and is how they've penetrated to a lot of new markets, right? And I think that's a very clever way of doing it, like their offering is limited, and then the you know, if you want to buy the full package, you can, but I don't know if that's still their, their their way of doing it, but there's like ways to trigger people to still come to your website. So that's a, I would say, second piece. The third piece is often what larger companies do is mostly identifying customer profiles. Whereas, like you have the customer data, you have the sales data, you have libs, very limited customer data, but you have sales data so you know who is buying what type of products from where, and often throwing that in a data lake, and that helps with understanding your customer profile. And lastly, what I think is exciting, and that stuff that usually agencies do more they know more about, is they can re they actually started doing these retention things inside of Amazon. So you can do, you can you can, like, do email follow ups. And it's like a newer thing, I don't know exactly how it's called, but in Amazon, you cannot start doing some of the retention tactics to, like, have repeat orders, because you can also have repeat orders on Amazon, right? Yeah, there are subscriptions where you can, if you subscribe now, then you get your next, you know, products for free. So you can set up a lot of retention pieces in those platforms. Because the unfortunate truth is, the buyers that buy on these marketplaces, buyers like you and I sometimes just prefer buying on Amazon. Love your website, but it's still annoying. And Amazon, I get the guarantee I have the shipping, my prime like, everything works. I can search my previous orders, order it again. So the consumer benefit of that sometimes it's just yeah, you have to go with it and there, therefore make sure that the retention or repeat orders happen,
Mariah Parsons 39:57
yeah, yeah, yeah, yeah. There. All great, great points. And I've heard, you know, other other industry experts also throw in the caveat of treating different customers on different, you know, different channels differently, where maybe someone's shopping with you on a marketplace because of that convenience or because of that marketplaces, market share or policies or whatever else. But then they're coming a different customer is coming to your site directly because they want to shop and give you they understand that, you know, shopping directly with someone is more profitable for that smaller biz, like business. So they're going to, you know, they're going to pursue that and put themselves out of a little bit more convenience for that marketplace. So I think it's all great things to consider, and I know well, we're leaving our listeners with a lot. So it was great to have you here today already. Thank you for making the time, and I am excited for the next time our teams will be able to get together, maybe at shop talk. We'll see. But this has been great and really educational. So thank you.
Jordi Vermeer 41:02
Yeah, thanks for having me. Really enjoyed it. And yeah, looking forward to if there's any questions, reach out.
Mariah Parsons 41:09
Yeah, thanks for having me. Okay, wonderful. Sounds good. Hello, everyone. It's Mariah. Again. I am just popping in to say thank you for listening to today's episode, and I am so so so grateful that I have been able to be on this journey for the past couple of years with this podcast, it's been phenomenal to grow and see our community of 1000s of listeners, see what you guys are up to, what you're learning, what you want to hear about next. So if you haven't already, please like and subscribe to the show so we can continue doing this. Leave us a review. Let us know your thoughts. Follow us on our new social media channels and check out our newly launched website. If you or someone you know would be a great guest for the show, please do not be shy. Fill up the form that we have on there, because those are some of my favorite interviews, and I will make sure that our new website is linked in the bio. It's retention Chronicles podcast.com and as always, let's give a warm shout out to our day one sponsor, Malomo. As you already know, Malomo is an order tracking platform that enables Shopify brands to take control of their transactional email and SMS through branded order tracking. What does that mean? That means you ditch those boring carrier tracking pages, the all white pages that have nothing on them but a tracking number and an update on the date of your estimated arrival, and swap those with pages that actually match your brand and can help you convert on some of your goals, customers like you and I obsessively check that tracking page when we're looking for our order at our doorstep an average of 4.6 times. If you can believe it, yes, customers are going to that page 4.6 times. So don't waste out on all that customer engagement and instead, send them to a page that converts in the way that you want it to. I am talking dealing with shipping issues, having cross sells and upsells, having your social media on there, your loyalty programs, anything, anything that you can imagine. So if you want to learn more about how to do that, go to go malomo.com that's G O M, a, l o m, o.com and if you didn't get that, don't worry. That website link for our sponsor, as well as our podcast website are linked in our episode description. So with that, I will sign off and see you all next time you.
