Last week I wrote about the difference between transactional and relationship-based business models. When Etsy mentioned this article in their round up, it drove some readers to Smaller Box who said they were focused on a relationship-based business model, despite having Etsy as their primary venue for an online presence. While you can make this your goal, marketplace websites work against this type of business model. Here’s why:
1. The relationship is with the marketplace
A few weeks ago I was talking to a friend who shops on Etsy but is not a crafter. She asked why we don’t run Ex-Boyfriend through Etsy. I said “You shop on Etsy a lot, right?” She nodded.
I continued, “Imagine you found the scarf you’re wearing on Etsy. If I said to you, ‘hey that’s a great scarf, where did you get that?’ what would you tell me?”
She looked confused and said “I’d tell you I got it on Etsy.”
And that’s why Ex-Boyfriend isn’t run through Etsy. I know when Ex-Boyfriend’s customers are asked where they got their tees, they’ll say Ex-Boyfriend. It’s the only possible answer. They won’t say Ebay, Etsy, Amazon or any other marketplace website. While we do sell some overstock items via Etsy, the hub of our business is through our website, and the main reason for this is that we want the customers to have a relationship with us, not a marketplace website.
I know as a consumer, I think the same way that my friend thinks. I buy stuff all the time on Etsy, Ebay, Amazon, etc. I couldn’t name a single individual seller who I actually bought from on those sites. The entire time I was seeing the marketplace’s logo, getting email from the marketplace website. Of course, that’s the branding that stuck with me.
If you want to build a relationship with customers, they need to know who the heck you are. If another brand name is stuck in front of their face during the transaction, how will they remember you instead of the marketplace?
2. The user experience is dictated by the marketplace
In my article about relationship-based business models, I talked about how these businesses place their emphasis on creating a unique brand experience. This starts the minute a customer steps into your virtual doors. The brand experience is communicated via the web design, product photos, website features (i.e. VIP customer clubs, virtual dressing room aps, etc.) and even on down to product packaging, customer emails, website copy, etc.
Sites like Etsy and Amazon do create a brand experience, but the experience is with Etsy or Amazon, not the people who sell products through them. Etsy looks like a modern indie website, if it had a storefront it would be in Williamsburg Brooklyn. That brand experience is conveyed through the site’s design, features, etc. If that’s not the brand experience you’re trying to create, and you sell there, you’re kind of out of luck.
Check out the different vibes cultivated at sites like Lochers vs Brooks Brothers. If the exact same products were for sale on Etsy or Amazon.com instead of those branded websites they might look like just a phone case or just a polo shirt. It’s the branding these companies have created that make their customers want their cases or shirts over the others. Those brands would be incapable of communicating their specialness if their products were featured on marketplace websites.
3. Marketplace websites inhibit lead-nurturing activities
In my article last week, I talked about how relationship-based business models focus on getting customers, not transactions. A marketplace website is designed to give you the opposite result. It might bring you sales, but since you don’t get to build a relationship with the customer and you can’t communicate the uniqueness of your brand, it’s very hard to turn one-time buyers or casual browsers into die-hard fans. Aside from the limitations already discussed, the technology is also a problem.
Marketplace websites don’t make it easy for your to direct the casual visitor to your blog, Facebook page or newsletter. There’s no single click access to any of these tools that would help you foster relationships with visitors. You certainly can’t employ banner ad re-marketing. Even if a customer makes a purchase, you can’t simply have them check a box to get on your mailing list. Repeated marketing communication with the person buying from you is almost discouraged. So how are you going to keep the conversation going with that person who was interested but didn’t buy today, or did buy today but may forget about you by next month?
What can you do about all of this?
People sell their products on marketplace websites for 2 reasons: either because those websites can send you customers since they have a large user base or because they’re easy/convenient to use. If you are serious about growing a real business, neither of these reasons is especially good. A profitable business can bring its own customers in the virtual doors, and after I talked about all the disadvantages of relying entirely on a marketplace for your online presence easy/convenient seems like a weak excuse compared to what you’re giving up for ease and convenience. So here are some options:
1. Get your own ecommerce website
Treat your business like a real business by investing some money in an ecommerce site. If you’re not ready to go whole-hog, consider ready-made solutions like Yahoo stores or Big Cartel. You will still need to invest in a web designer, but it’s still easier and cheaper than creating an entire ecommerce site from scratch.
2. Get your own website and leave the ecommerce where it is
If you aren’t ready to create your own online shop, you can at least create a website with a professional design and links to your blog, social media accounts, etc. Then you can direct customers to your marketplace store (Etsy, Artfire, Amazon, Ebay, etc.) to make their purchases. It’s not ideal, but at least the customers meet your brand before they meet the marketplace.
3. Have two online shops
If you can’t give up the traffic and sales that marketplace sites deliver, there’s no reason to leave them entirely. But treat them like an ad venue instead of the hub for your business. Create your own site and sink all your marketing efforts into that, then leave your Etsy/Amazon/Ebay shops where they are, so that visitors using those sites as marketplaces can still find you.
4. Create an experience in a box
If you are determined to stick to the marketplace entirely, you’ll need to work extra hard on product presentation. Make sure everything about the finished product that gets into customer hands reinforces you branding. You want to get your branding into your product packaging, inserts that go into the package (i.e. stickers, buttons, etc.) and the product itself. Make sure your logo is on the products, on your invoice, etc.
Your goal is to deliver a package that is so memorable and so branded, that the customer’s lasting memory about the transaction is your brand instead of the marketplace.
Stay tuned for tomorrow’s post, I’ll show you some examples of how we try to do this with Ex-Boyfriend.
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