Ecommerce Future A Symphony of Feeds
Ecommerce Future A Sympony of Feeds is a great breakfast meeting with SellWare.com and later AuctionBlox.com founder Anthony Musselwhite. Anthony is calm, soft-spoken programmer and a rare native of North Carolinian.
“I needed businesses revenue to match my corporate salary, or I couldn’t afford to do it full-time,” Anthony explained. Like many entrepreneurs, Anthony worked two full-time jobs before launching Sellware. Helping his wife watchband business create online commerce in com’s wild west days got Anthony thinking. His wife’s watchbands needed multiple channels, so he wrote code to create feeds. Feeds would be key to making multi-channel online commerce easy, and profitable Anthony realized.
His wife’s watchbands needed multiple channels, so Anthony wrote code to create feeds. Feeds are essential to making online commerce easy and cost-effective. Feeds, the ability to create digital content once and FEED IT to many locations, is a tremendous time-saving idea and one some retailers such as Amazon require. Other stores asked if they could buy Anthony’s magical
Other online stores asked if they could buy Anthony’s magical multi-channel feed management tool and Sellware and later AuctionBlox.com were born.
Zen Yeah Right
E-commerce is easier now than before, but setting up an online store and developing multiple channels is still a pain. Zen Cart is misnamed. If you need to know what is selling where and why…well good luck with that. Inventory and business intelligence are out of the reach of many e-retailers. That’s why feeds matter.
Linked: How Everything Is Connected to Everything Else is an essential read. Albert-László Barabási’S alternative title is Linked: The New Science of Networks. Let’s focus on Barabási’s second title. His book predicts what IS happening – the rich are getting richer.
The web rewards scale with more scale. 100,000 followers or subscribers help to get to a million and then five and ten million in the blink of the internet’s eye. Scale is easy and hard. Scale is easy from a backend technology perspective and hard from the winning hearts, minds, and loyalty to create scale view.
Scale is easy to kill. Here are a few “scale killers”:
- Get too greedy too fast
- Don’t listen
- Assume YOU have more ownership than you do
- Change part of the magic winning formula
Magic of Scale
When your website is adding subscribers, buyers, and advocates at exponential rates you are “scaling.” Every site needs to scale whether they realize it or not. Websites cost money and time and time is another form of money. Linked describes every network’s mathematical destiny – first democracy becomes powerful oligarchies.
Imagine a system starts with ten nodes (for the sake of example imagine a node is a destination e-commerce web site). Initially, traffic may be evenly dispersed. Linked explains the math behind why this state of equilibrium won’t last. As a Director of Ecommerce, it wasn’t hard to find examples of Barabasi’s Rich Get Richer Rule. We saw dramatic demonstrations such as:
- 10% of links earned 90% of the clicks.
- 20% of our products generated 80% of our site’s revenue.
- 5% of our affiliates made 95% of our affiliate sales.
- 20% of our pages controlled 80% of the site’s top line revenue.
- 2% of pages controlled more than 50% of our net profits.
Here, with some paraphrasing, is how Wikipedia describes a Pareto Distribution.
Vilfredo Pareto originally used this distribution to describe the allocation of wealth among individuals. His mathematical distribution showed how a larger portion of any society’s wealth is owned by a smaller percentage of people in that society.
We see Pareto’s math in channel marketing. PPC (Paid ads on Google) brought in the monster share of the “new to file” customers and top line revenue when I was a Director of E-commerce (2003 – 2010). PPC provided quick marginal profits, but our file was healthy so we could take advantage of our $140-lifetime value from each customer. We ran our business at $3 to $1 ROAS (Return On Ad Spend). One day I suggested we test lower and higher ROAS.
I suggested testing because the web’s multi-channel mystery was all but unsolvable. PPC, content, cause marketing, email marketing, social media marketing, video marketing and about ten other kinds of marketing were all batched together in an unintelligible goulash. Removing any ingredient risked the entire dish. Everything is connected, o everything contributes to everything else.
First, we moved PPC ROAS up to $6 returned for every $1 spent. Our P&L instantly looked better. PPC as a channel jumped two slots in profitably. “We are going to fly this plane (the website with high ROAS PPC) right into the side of a mountain and feel good about the entire way,” I told our President and my boss. “Why,” she asked.
I showed Peggy a chart demonstrating how dramatically our new customer acquisition slowed with such a high ROAS. “We will have a great year and no future at all,” I noted. The web is a grow or die environment. Your traffic, engagement and sales to up or down. There is no neutral, no swimming in place. And then there’s Amazon.
Amazon’s view is LONG. They created Prime to tweak and manipulate customer loyalty. Trying to compete with the Big A led to our next test condition – ROAS of $1 to $1. Our P&L bled red ink all over the floor. I tried to sell the “delayed profits” idea, but no go. “Go back to $3 to $1, or you are FIRED,” made Peggy’s intentions clear and unambiguous. We moved ROAS back to $3 to $1.
What It All Means – Feeds In Your Future
Combine Pareto’s Distribution, the game-changing impact of social media, mobile marketing, and changes in Search Engine Optimization (SEO) and it isn’t hard to see why there are feeds in your online store’s future. Feeds will be run in three directions.
- Ebay & Amazon To Magento et al.
- Magento et al. to Ebay, Amazon & Others
- Social Nets into all of the above
Some online retailers get landlocked. They’ve built sizable businesses on a single channel. DON’T DO THAT. Always diversify online marketing channels. You wouldn’t buy just one stock, so don’t only have one way to market.
Use Anthony’s SellWare.com to grab your eBay store by the throat and toss it into a new Shopify, Magento or Volusion store. The hard work is done, now use a tool like Sellware to maximize your site’s reach. Think of channel expansion as cheap advertising. Channel diversity is cheaper than print or TV ads and better Return On Investment (ROI).[/vc_column_text][vc_empty_space height=”150px”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]