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Tag: Ecommerce business

  • Ayurveda at the Click of Your Smartphone: The Success Story of India Shoppe

    Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by India Shoppe.

    Digitization and E-Commerce have transformed the traditional way of business. Online shoppers Online shopping sales across India amounted to around $67 billion in 2021. Online shoppers are increasing year by year. There were 189 million online shoppers in 2021 which is expected to reach 220 million in 2025. The shopping behavior of customers has played a crucial role in the development of ECommerce retail. India Shoppe is one such E-Commerce retail platform that provides all the products for household needs. Staying bootstrapped, India Shoppe’s revenue growth has reached INR 1300 Crores.

    Read to know about India Shoppe, its founders, products and brands under it, its business model, and the story of its growth.

    India Shoppe – Company Highlights

    Startup Name India Shoppe
    Headquarters Chennai
    Industry Ecommerce Retail
    Founder Rajesh Chandan
    Founded 2013
    Website indiashoppe.com

    India Shoppe – About
    India Shoppe – Founders and Team
    India Shoppe – The Idea and Startup Story
    India Shoppe – Vision
    India Shoppe – Products
    India Shoppe – Business Model and Revenue Model
    India Shoppe – Challenges Faced
    India Shoppe – Revenue Growth
    India Shoppe – Tools Used in the Company
    India Shoppe – Achievements & Recognitions
    India Shoppe – Future Plans

    India Shoppe – About

    India Shoppe is an Omni-channel retailing company, started in Aug’13 to provide Wellness & Nutrition, Personal Health-care, Skin-care, Oral-care, Hair-care and Home-care after identifying & understanding their customers. They design & produce the products for which enough demand is created through various social media & other channels of Marketing. Recently, they have added fresh Agro-care solutions to their bouquet of products.

    India Shoppe – Founders and Team

    Rajesh Chandan is the founder of India Shoppe. Mitesh Bhandari and Viresh Mehta are the Co-Founders of India Shoppe.

    Rajesh Chandan - Founder of India Shoppe
    Rajesh Chandan – Founder of India Shoppe

    Mr Rajesh Chandan is an alumnus of Harvard Business School and a first-generation entrepreneur from Chennai and a technology enthusiast, with over two decades of hardcore exposure in various business verticals. He upgraded himself to the latest trends in business & technology, by attending various programs at ISB (Hyderabad) & IIM, (Ahmedabad). Rajesh Chandan actively conducts leadership workshops for Start-Ups, mentoring them to upscale their business. He held the position of VICE CHAIRMAN at JITO INTERNATIONAL W ING and continues as an active member of the JAIN INTERNATIONAL TRADE ORGANISATION with more than 15000+ influential (Jains as) members. Rajesh is an avid social worker associated with various organizations & rehabilitation centres. His family has donated a day-care hospital in Ayanavaram (Chennai) which is run by RYA Cosmo Foundation.

    India Shoppe Team
    India Shoppe Team

    Mitesh Bhandari is the Co-Founder and Executive Director of India Shoppe.

    Mitesh Bhandari is a young & dynamic commerce graduate from LOYOLA (Chennai) & MBA from NMIMS (Mumbai). He is a certified Chartered Financial Analyst with a decade of experience in several lines of business & off- late prominently in the Fin. Tech landscape. Mitesh Bhandari is an active investor on many alternative investment platforms, including Venture-Debt. He has more than 2 decades of experience in the business of Ferrous & Non-ferrous metals. Mitesh Bhandari also has a well-curated portfolio of leasing, and real estate assets.

    He serves as the Charter President of RCC Magnum, an organization of 100+ youth members & has been an active member of Round-Table (India), a philanthropic organization.

    Viresh Mehta is the Co-Founder and Executive Director of India Shoppe.

    Viresh Mehta is an enthusiastic leader who heads Business-Development. He is a marketing & sales specialist who focuses on the smooth functioning of an organizational supply chain and related value addition processes for the company. He has an outstanding experience of 17 years in merchandising & sourcing various consumer goods. He developed various distribution channels across India, for different FMCG Products, ensuring business growth. His strong decision-making abilities have played a critical role in handling and strategic planning of the product launches of several esteemed brands like Coorg Filter Coffee in Tamil Nadu, Detergents like Shudh, Rakshak and Samundar crystal salt from the house of industrial-giant, Tata. Understanding and engaging in public relations is a primary reason for his success. Crisis and Disaster Management at various business houses is his forte.

    Once Viresh Mehta organized a Dandiya Mela or a traditional folk-dance festival with over ten thousand participants from all ages & ethnicities, for raising student scholarships for the underprivileged.

    India Shoppe – The Idea and Startup Story

    Rajesh Chandan always wanted to start a brand, which would be more than just a business-house or a commercial- entity. He wanted it to be a part of people’s lives. That ‘want’ remained a distant dream until 2013, when he identified a dearth in a specific segment of the market & eventually, the spark grew into a flame.

    After a series of brainstorming with his peers in business, about how the global giants were becoming market leaders, online & native brands were ruling on-ground with their branches & franchises, the market in Omni-channel retailing remained unexplored. Soon, the idea started taking shape.

    India Shoppe was designed to be a lifestyle brand with a sincere focus on Tier II, and Tier III cities & towns targeting the “middle” & “upper-middle” income groups or the ‘active’ segment of society that is always aspiring for a better lifestyle.

    Rajesh went to the original ‘Shark-Tank’ to bounce his idea: My friends! Not for lack of options but this wasn’t just about, Validation of his idea but also the Sustenance of a promise!

    India Shoppe – Vision

    India Shoppe Logo

    India Shoppe has a vision to:

    • Be a large customer value creator in the market, focusing on customer service, understanding the customers, their way-of-life & identifying their requirements to improve their lifestyle.
    • Customize & develop products after market research & ensure they’re organic, healthy & easy to use.
    • Invest in new product lines & implement the latest technology to ensure they are delivered on time.

    India Shoppe – Products

    India Shoppe Products
    India Shoppe Products

    India Shoppe offers various daily-use products for individuals and the entire family. They are committed to building effective brand identity by aligning the consumers’ perception and expectations with the development of their products, with the highest standards in quality.

    India Shoppe has developed its private labels, under the brand names of:

    • “AAHAR” Food & Gourmet
    • “ELEMENTS WELLNESS” Health-Care
    • “NEUSTAR” Personal-Care
    • “ON & ON” Wellness & Nutritional-Care
    • “Mi HOME CARE” Adding a sparkle to your world
    • “INDIAGRO” Reflecting their commitment to farmers, they have scientifically researched and developed, plant & soil-care products that: help in maximizing the yield (for farmers) & are packed with nutrition (for consumers) while ensuring the quality of soil is retained.

    Their products do not contain (any) chemicals that are harmful to the body and are made of natural ingredients. They use raw materials which conform to API and in-house standards.

    Their proprietary health & wellness products are made of various nutritional ingredients & herbs, after extensive study and research. India Shoppe has experts who remain in close proximity with scientific researchers & market analysts to stay updated on developing new products or enhancing existing ones. Beginning from the sourcing of ingredients to the final Eco-conscious packaging, they ensure that their products are of premium quality.

    India Shoppe takes Conscious-Care for:

    • The People: Propose and promote a healthy lifestyle for consumers, with their products.
    • The Products: Prohibit the use of any ingredients which aren’t organic in their processes.
    • The Planet: From Products to Packaging, it is all vegetarian and eco-friendly.
    • The Past: Promoting Ayurvedic products which are preventive & also hail from this holy land.

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    India Shoppe – Business Model and Revenue Model

    India Shoppe creates a demand for its products, through active social-media campaigns and its chain of small-format retail stores & websites. Additionally, to reach a wider market, we’ve designed Pick-up Centers (P.U.C’s), in several remote locations that are mapped to their nearest store. Such P.U.C.s only purchase merchandise from the stores, they’re mapped to. It can also be explained as – H.O.: Parent, Store: Child, Store: Parent, PUC: Child.

    • Their stores maintain an online account of the respective PUCs mapped to them, based on the volumes of transactions or redemption of Pre-orders.
    • To ensure easy flow of the stocks, they are replenished from multiple warehouses, online & offline.
    • Their M.O.P is mostly through pre-orders having several types and denominations (Non-Transferable).
    • Customers carrying such Pre-orders get the merchandise at a discounted price while other customers purchase at M.R.P.
    • Customers can redeem/ purchase with dual-validation (Code & OTP) at the Store, PUC and Web-portal.
    • Their product range is further classified under different sub-categories.

    Strengths:

    • They have well-established network of 16 Warehouses, 51 Stores & 649 P.U.C’s, spread across the country,
    • They have tested & proven systems and ready-to-go processes for generating assured Sales growth.
    • They undertake periodic market research with corresponding Product-innovations.
    • They collaborate with scientific developers, manufacturers, designers, marketers & suppliers to ensure they come up with rich Ayurvedic products.
    • They build on brand re-call & consumer loyalty through Digital Marketing posts and campaigns by regularly posting engaging content on various social media platforms.
    • Their customers have been their biggest strength, as their testimonials are the hallmark of certification.

    India Shoppe – Challenges Faced

    Being an enterprise with most products based on Ayurveda, subscribing to their solutions would mean a shift into a better/healthier lifestyle. But this is the very reason most people today, resist choosing Ayurvedic medicine, which is more of preventive care, in contrast to the instant relief of western-medicine (Allopathy).

    However, the Covid Pandemic has rightfully pointed out that, instead of choosing the (so-called) ready remedies and instant reliefs, it is advisable to have a healthy lifestyle. And, going Ayurvedic, not only aids to eliminate the chances of infection but also has them equipped to battle other infections/ microbes, known & unknown.

    India Shoppe – Revenue Growth

    India Shoppe operates PAN-India. Starting in 2013-’14 from less than INR 100 CRS. to almost INR 1300 CRS. in 2021-’22. With a CAGR of 22%, their growth has continued during the Covid pandemic, even. So far, they are a bootstrapped company, running & managing with their capital & operating revenues.

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    India Shoppe – Tools Used in the Company

    Their team of developers, designers, researchers, product managers and engineers of various disciplines, work together in building a user-friendly design & well-tested interface with every aspect of the organization.

    • They have been using state-of-the-art ERP software for Finance and custom E-commerce.
    • The capacity of supply chain and logistics operations can be scaled anytime with their automated stock replenishment during peak periods (festivals/ holidays) for consistency in their deliveries.
    • With their in-house cloud-based mechanism and automation, Traffic is gracefully throttled if & when it goes beyond the given conditions.
    • Having high-performance integrations, connecting to third-party applications like the State GST portal, Supply chain Vendors and up to Last-mile deliveries.

    India Shoppe – Achievements & Recognitions

    India Shoppe has achieved recognition from the Government of India and others.

    • In the personal-care category, “Elements Wellness” was prestigiously awarded: BEST HEALTHCARE Brand by The Economic Times in 2019-‘20 & 2022-’23!
    • 7 & 14 State Governments in the country, have recognized India Shoppe as a prompt Tax-payer for 2020-2021 & 2021-2022 respectively.
    • At the peak of the Covid pandemic, when the health ministry of India advised everyone to take a spoon of Chavanprash (an Ayurvedic goo-ey preparation loaded with anti-oxidants & immunity boosters) a day, it hiked the consumption of their equivalent, On & On “Kavach Prash”.

    India Shoppe – Future Plans

    As a growing large-scale Value-Creator, they are eyeing expansion in the scale of operations, setting up more Distribution centres for easy reach & faster delivery, planning more stores & investing in new product lines & technology.

    After finding a firm footing in the local market, India Shoppe team have been exploring the possibility of expansion, especially in our neighbouring countries.

    FAQs

    When was India Shoppe founded?

    India Shoppe was founded in 2013 in Chennai.

    Who is the founder of India Shoppe?

    Rajesh Chandan is the founder of India Shoppe. Mitesh Bhandari and Viresh Mehta are the Co-Founders of India Shoppe.

    What are the products of India Shoppe?

    India Shoppe products list includes various daily household products:

    • Food Products
    • Health-Care Products
    • Personal-Care Products
    • Agro Care Products
    • Home Care Products

  • List of All the Startups Acquired by Flipkart

    Within ten years, e-commerce business platforms are booming like anything. All the more, the pandemic seems to have given a push of 10 times more to these e-commerce sites. The given hectic life, and busy schedules, people do not have the leisure to go out and shop. With many reliable e-commerce websites available, people prefer to buy products online.

    According to sources, the Indian e-commerce market is expected to grow to $188 billion by 2025 from $6.2 billion (2020). It is also predicted that the market is expected to increase by 21.5% by the end of 2022.

    Flipkart, which is India’s one of the biggest players in the e-commerce market, is also considered the most valuable startup in the country today. This Walmart-owned company started its journey by selling books online and further expanded into selling other product varieties such as electronics, fashion, home essentials, and other lifestyle products.

    Through its journey of becoming the most successful startup, Flipkart has acquired several companies. Today, Flipkart has a revenue of 433 billion Indian rupees.

    In this article, let us discover the list of major companies acquired by Flipkart.

    1. ANS Commerce
    2. Yaantra
    3. SastaSundar
    4. Cleartrip
    5. Scapic
    6. Mecha Mocha
    7. Walmart India
    8. Upstream Commerce
    9. Liv.ai
    10. F1 Info Solutions & Services
    11. eBay India
    12. Jabong
    13. PhonePe
    14. FX Mart
    15. Appiterate
    16. AdIQuity
    17. Myntra
    18. Jeeves
    19. Letsbuy.com
    20. Chakpak
    21. MIME360
    22. weRead

    1. ANS Commerce

    Year of Acquisition – 2022

    ANS Commerce Logo
    ANS Commerce Logo

    ANS Commerce is a direct-to-consumer (D2C) SaaS startup. The company offers e-commerce solutions for online brands, such as brand-store tech, performance marketing, platform support, marketplace management, and more.

    Flipkart has acquired ANS Commerce for an undisclosed amount. However, the agreement is yet to be completed due to some closing conditions.

    2. Yaantra

    Year of Acquisition – 2022

    Yaantra Logo
    Yaantra Logo

    Yaantra is an electronic repair company that offers door-to-door electronic repair services for smartphones and laptops and sells refurbished products. The acquisition made by Flipkart is to improve its after-sale services in the smartphone segment and to maintain the recommerce platform. Yaantra was acquired by Flipkart for approximately $40-50 million.

    3. SastaSundar

    Year of Acquisition – 2021

    SastaSundar Logo
    SastaSundar Logo

    SastaSundar operates in online pharmacy and healthcare solutions such as e-diagnostics, and e-consultations with a network of more than 490 pharmacies. Flipkart was acquired to further improve the healthcare system by offering affordable pharmacies to consumers on a large scale. The Flipkart group has a 75.1% stake in the SastaSundar company.

    4. Cleartrip

    Year of Acquisition -2021

    Cleartrip Logo
    Cleartrip Logo

    Cleartrip is an online travel service company. The company offers booking services for flights, train tickets, and hotel reservations in India and the Middle East. The Covid-19 pandemic made a very stressful year for the travel sector, due to which, Cleartip had laid off around 500 employees. Flipkart acquired Cleartrip in April 2021 in a $40 million deal.

    5. Scapic

    Year of Acquisition – 2020

    Scapic Logo
    Scapic Logo

    Scapic is a cloud-based startup that deals in creating and publishing AR and 3D content through a web browser for clients across e-commerce and marketing platforms. The deal made by Flipkart is to enhance its user experience. Flipkart has a 100% stake in Scapic, however, the deal value is still undisclosed.

    6. Mech Mocha

    Year of Acquisition – 2020

    Mech Mocha Logo
    Mech Mocha Logo

    Mech Mocha is a mobile gaming platform that operates a live social game called ‘Hello Play’. This gaming app allows participants from tier II and tier III cities to interact with each other through its in game-video. Flipkart invested in Mech Mocha at an undisclosed amount.

    7. Walmart India

    Year of Acquisition – 2020

    Walmart India Logo
    Walmart India Logo

    Walmart India is a subsidiary owned by Walmart Inc., which is an American multinational retail corporation that has a wide variety of markets dealing mainly in departmental stores, and grocery stores. The reason for Flipkart to acquire Walmart India is to help expand its footprint in the food and grocery segment, which will further strengthen its supply chain.

    8. Upstream Commerce

    Year of Acquisition – 2018

    Upstream Commerce is an Israel-based retail platform that provides cloud-based automated-competitive solutions to help online retailers develop an analysis to boost their sales. Flipkart acquired Upstream commerce to further optimise its product pricing to compete with its rival Amazon.

    9. Liv.ai

    Year of Acquisition – 2018

    Liv.ai is the first Indian company that uses powerful neural network models that enable developers to convert speech into text supporting 10 Indian languages. They aim to give voice to billions of Indians, and the ability to express their language through the digital world. Flipkart acquired Liv.ai for $40 million.

    10. F1 Info Solutions & Services

    Year of Acquisition – 2017

    F1 Info Solutions & Services Logo
    F1 Info Solutions & Services Logo

    In 2017, Flipkart acquired F1 Info Solutions & Services, an IT products repair service provider of brands like Apple, HP, Samsung, Sony, Lenovo, Asus, and many more. The main reason for the acquisition of F1 is to expand Flipkart’s offerings towards after-sale repair services for its IT products and mobile phones.

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    11. eBay India

    Year of Acquisition – 2017

    ebay Logo
    ebay Logo

    eBay is an American multinational e-commerce platform founded in 1995. eBay started its operations in India in 2005 but was not that successful. Flipkart acquired eBay in 2017 for approximately $500 million.

    12. Jabong

    Year of Acquisition – 2016

    Jabong Logo

    Jabong.com is an online portal that sells products in categories like fashion accessories, footwear, apparel, home essentials, and other lifestyle products. Flipkart acquired Jabong through Myntra for $70 million.

    13. PhonePe

    Year of Acquisition – 2016

    PhonePe Logo
    PhonePe Logo

    PhonePe is a digital payment mode for online transactions in India founded by Sameer Nigam. The app operates around the Unified Payments Interface (UPI), regulated by the National Payments Corporation of India. The company was acquired by Flipkart in 2016, although it will function as a separate business unit. Flipkart bought the company for $20 million.

    14. FX Mart

    Year of Acquisition – 2015

    FX Mart Logo
    FX Mart Logo

    FX Mart is a company that offers payment services like digital or electronic payments,  remittances buying and selling of currencies, travel, and related services. The acquisition was made with an aim to enable Flipkart to have its own in-app wallet system and avoid paying a cut to external wallet providers. The deal value was around $6 million.

    15. Appiterate

    Year of Acquisition – 2015

    Appiterate Logo
    Appiterate Logo

    Appiterate is a mobile marketing company that engages in marketing automation to help e-commerce companies push their sales through push notifications and in-app messages. The details of the deal are undisclosed.

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    16. AdIQuity

    Year of Acquisition – 2015

    AdIQuity Logo
    AdIQuity Logo

    A global mobile ad network founded by Anurag Dod, AdIQuity was launched with the aim to facilitate ad agencies to acquire mobile traffic. Flipkart bought this company in hopes to increase its efficiency on the mobile platform.

    17. Myntra

    Year of Acquisition – 2014

    Myntra Logo
    Myntra Logo

    Myntra, initially sold personalised gift items but later on expanded into fashion and lifestyle brands in 2010. In 2014, the company was bought by Flipkart at a valuation of approximately $370 million. The acquisition was done in to beat Flipkart’s rival Amazon to create one of the largest e-commerce markets. To date, Myntra is one of the biggest acquisitions of Flipkart.

    18. Jeeves

    Year of Acquisition – 2014

    Jeeves Logo
    Jeeves Logo

    Jeeves is one of India’s leading third-party after-sales service providers with a network of 320+ service partners. It was during the same year, Flipkart launched its large appliance category.

    19. Letsbuy.com

    Year of Acquisition – 2012

    Letsbuy Logo
    Letsbuy Logo

    Letsbuy.com is an online retail shop selling branded computer technology and digital lifestyle products from top international and domestic brands. Flipkart acquired Letsbuy.com for $25 million.

    20. Chakpak

    Year of Acquisition – 2011

    Chakpak is an online media podium for films revolving around Bollywood, Telugu, and Tamil that enables users to find information regarding their timings, reviews, latest news, and information. Flipkart made this acquisition to let them offer user-generated content for a huge array of Indian movies to their customers.

    21. MIME360

    Year of Acquisition – 2011

    This was a Mumbai-based digital media distribution company. MIME is the short-form of Manoramic International Media Exchange. The company has ties with Saregama and Gaana.com and operates in Mumbai, and Delaware, USA. To improve their digital distribution technology platform, Flipkart acquired MIME360.

    22. weRead

    Year of Acquisition – 2010

    weRead Logo
    weRead Logo

    The first startup acquired by Flipkart is weRead.com. It is an online community for all book readers. The platform was available on Facebook, Myspace, Orkut, Hi5, and Bebo. Flipkart wanted to expand its customer base to further improve its customer book reading experience.

    Conclusion

    The list of startups acquired by Flipkart gives us a clear understanding of how ambitious Flipkart is. They aim to keep growing and compete with their rival Amazon. The group is in the mood to diversify its ecosystem through these various investments in multiple sectors.

    The company has grown tremendously in just ten years and continues to evolve every day by expanding its services for its consumers. Besides these acquisitions, Flipkart has made investments in Ninjacart, Aditya Birla Fashion Retail Limited, Shadowfax, and Arvind Fashions.

    FAQs

    What companies are owned by Flipkart?

    Ans commerce, Yaantra, Sastasundar, Cleartrip, Scapic, Mech mocha, Walmart India, Upstream commerce, Liv.AI, F1 info solutions & services, eBay India, Jabong, Phonepe, FX Mart, Appiterate, Adiquity, Myntra, Jeeves, Letsbuy.Com, Chakpak, MIME360, and Weread are owned by Flipkart.

    Is Flipkart an MNC company?

    Yes, Flipkart is an MNC company founded by Sachin Bansal and Binny Bansal.

    What kind of company is Flipkart?

    Flipkart is an eCommerce company based in Bangalore.

  • Ecommerce Automation – What Is It, Benefits, Tools, Case Studies and More

    Ecommerce automation is creating a lot of buzzes. But, does your company actually need it? Let’s find out.

    The main purpose of any eCommerce marketing campaign is to boost sales. This might include sending marketing emails, managing orders, dealing with customer service, and a lot more.

    These tasks may not look like a big deal when seen individually but can give you a headache when they start to pile up, wasting ample time out of your busy day. Also, apart from these, there are a lot of insignificant tasks that require your time and energy.

    As per Deloitte, such tasks are a waste of time, and shifting your attention can cause fundamental improvement in your operations. This is where automation comes into the picture.

    “The eCommerce industry is a force that no investor can afford to ignore” – Cushla Sherlock

    What Is Ecommerce Automation?
    Benefits of Ecommerce Automation
    Tasks to Automate in Your Ecommerce Business
    Top Tools to Automate Your Ecommerce Store
    Case Studies of Ecommerce Automation

    What Is Ecommerce Automation?

    As per the report published by NASA, 60% to 80% of businesses fail due to human errors. These errors can be easily avoided by using automation.

    Like the automation of any other industry, the purpose of eCommerce automation is to simplify your work and streamline the workflow. If you are running a growing company, you understand how often the work gets overwhelming when you feel like you need more workforce or more leaders or managers in your company.

    Automation can actually help you to overcome these issues by saving a lot of your time and energy. Moreover, with a machine taking care of your tasks, the chances of error are reduced to a minimum and your employees can focus on their actual work instead of worrying about something insignificant.

    Benefits of Ecommerce Automation

    As per Statista, the global retail automation market size which was around 11.3 billion U.S. dollars is expected to grow up to 33 billion dollars in 2030.

    This data clearly indicates that automation is helping businesses to grow which is why more and more businesses are relying on it.

    Let us explain in detail how eCommerce automation can actually help your growing business.

    Time Efficiency

    Getting rid of the repetitive tasks that have to be done every day can save a lot of your time. This increases the focus as well as productivity. Moreover, it gives you extra time to review your plans or start off the pending projects.

    Also, automation gives you the advantage of scheduling your tasks. For example, announcing the release of your new product, applying discounts, providing rewards, adjusting prices, etc.

    Streamlined Workflow & Increased Worker Engagement

    These trivial tasks have become a part of the routine workflow of your employees. Most employees complain that miscellaneous works disturb their actual work due to which they are unable to perform up to their potential.

    Using automation allows your employees to focus on more business-oriented work resulting in higher productivity and enhanced employee satisfaction.

    Boost Customer Satisfaction

    As a growing business, the number of your customers also keeps increasing making it difficult to keep them all satisfied. As most of the customers judge your services by the response time you can certainly improve customer satisfaction through automation.

    The eCommerce automation tools facilitate online shopping engagement giving your customers a great shopping experience. These happy customers mostly turn into repeat customers.

    Cost Reduction

    With automation, the cost of working also reduces considerably. The main reason for this is that the mundane tasks are taken care of by the tool so your employees can focus on their work without disturbance.

    This reduces the need for overtime work or increased manpower, ultimately reducing the expenditure.

    Better Communication With Suppliers

    The automation software gives before-time notification whether a product is about to go out of stock or inventory is below a certain level. These can also send triggers to the suppliers asking them to send in the required products.

    Moreover, with timely information, you also get time to look into the supplies rates or other better contracts that may be available from different suppliers. Thus, it helps you grab better deals.

    Tasks to Automate in Your Ecommerce Business

    Up till now, we have given you enough statistics and reasons to know that automating your eCommerce business is in your favor and can help you run faster towards your success.

    Now, let us take a look at the tasks that you can automate now to make your business grow faster.

    Customer Service

    Your employees may not be working after 5 but your customers might visit your website to buy a product even after the working hours are over, and they need assistance. So, how can you manage that?

    The answer is simple, automation. The ability of these tools to provide real-time feedback as well as their ability to instantly answer the queries leads to satisfied customers. Owing to the pleasant experience there is a high probability of these customers coming back to you.

    There are a lot of AI-based tools designed for this purpose. These work as chatbots or virtual assistants and respond to your customers based on the previously formulated rules and fed commands.

    Chatbot Example
    Chatbot Example

    Business Management Automation

    Whether you are about to add a new collection of products or have a weekly sale to offer, automation can help you with all your tedious jobs.

    The tool helps you to schedule your sales with regular posts on social media to attract the attention of customers or set a countdown to keep the hype alive in the customers, and much more.

    A number of heatmap tools are available that help you figure out where to post your ads while launching a new product. They also further help you identify the channels that are working well so you can pay more attention to them.

    Heatmap Example
    Heatmap Example

    Order & Inventory Management

    Managing the inventory is one of the most important yet boring tasks. You obviously need to keep track of your stock to inform the suppliers and order fresh products but doing this manually can be really tedious.

    You can use certain inventory management tools for these purposes that are easy to use and work like wonder. These tools can actually save you from losing revenue owing to poorly managed inventory.

    Automation tools are designed to prepare and send a purchase order to the relevant supplier whenever an item goes out of stock. You can also enable out-of-stock or low-stock notifications in these tools to keep you updated.

    Email Marketing

    Writing and sending emails to your customers manually can be really tedious and boring. Moreover, it is practically impossible to track the activity of each and every customer and send the emails accordingly.

    This is why automation tools are available for help. Whether you have to send the welcome emails, cart abandonment emails, order confirmation emails, or post-purchase engagement emails, these tools keep track of every customer without missing the details.

    Fraud Prevention

    As per a survey, fraudsters take away around $12 billion each year from the eCommerce industry. They use new and sophisticated techniques every time to deceive the customers and business owners.

    There are automation tools that can help you save a large amount of money going into the wrong hands. These tools help you verify each order by checking the IP address or carrying out other verification processes, thus saving you from fraud.

    Accounting

    From funds to invoices, or to keeping track of the payments made to suppliers, accounting can be difficult. Also, if you are new to the business keeping an accountant can be expensive.

    Automating your accounts can save your day. You can use tools that will help you through all your accounting needs without taking a toll on your budget.

    Website Building

    If you are just starting your website to set up your online business without a big budget, the automation tools can be a big help, especially if you are not a technical person.

    These tools can help you with most of your small problems like choosing a template for your website, changing themes, or adding pop-up banners. So you actually spend your money only when you are in real need.

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    Top Tools to Automate Your Ecommerce Store

    Choosing the best automation tool for your website can be complicated. Below, we have listed 6 top automation tools to help you with your eCommerce business. They are:

    MailChimp

    This tool is best known for creating intuitive email campaigns depending on the type of business.

    HubSpot

    This is a very popular tool that mainly focuses on inbound marketing. It pays attention to the sales marketing activities and offers services for support, sales, and marketing.

    Zendesk

    This is an application available as a cloud-based Software as a Service (SaaS). It is popularly used for customer service.

    Verloop.io

    This tool is used for customer care to automate conversational support. The insightful data help you keep the customers engaged.

    Sendgrid

    This tool focuses on 1:1 email communication. Moreover, it directly sends customer-centric SMS-based notifications in real-time.

    Jumplead

    This tool helps you generate leads for your eCommerce store. You can also respond to customers, manage leads, and handle customer accounts through this.

    Case Studies of Ecommerce Automation

    For your reference, we are adding a few case studies to help you understand how eCommerce automation has helped several companies grow their online business.

    Truwood

    This Company manufactures bamboo and wood-made watches. They utilized cart abandonment emails and messages. They target the audience based on the value of the cart, giving preference to high-value carts.

    They send messages and emails to the cart owners with the picture of their selected product offering some discounts and creating a sense of urgency through a limited-time offer.

    This strategy has worked really well for the company increasing their return on investment by around 35 times.

    Draper James

    The brand organizes a weekly sale, every year, in mid-march, for celebrating the birthday of its founder, Reese Witherspoon. They utilize the science of retention for their marketing strategy.

    So, instead of the bulk emails, they only send customized emails to the users who have purchased or visited the site in the last 90 days. They nurture their leads by only sending relevant content to the target audience.

    This strategy has led to a 15.4% increase in their year-over-year revenue, even when they have been sending 48.7% lesser emails.

    Premier

    This eCommerce store sells accessories and apparel. They focused on improving the customer experience by sending them price drop emails for the product they have shown interest in their previous budget.

    The automation tools for sending customized emails have worked really well for the brand and resulted in a huge increase in open and click rates.

    Blush and Bar

    This brand sells sustainable and affordable jewellery. As they noticed that the maximum traffic for their site came through social media ads, they utilized these leads to reach their target audience.

    They generated pop-up ads for mobile devices that do not require much information to be filled in but allowed the user to subscribe in a few taps.

    This simple but effective marketing strategy has led to an increase of $39,000 in their sales within the first month of implementation.

    Embla

    This brand sells home goods online. They used a holistic SMS marketing strategy for improved customer experience and trust-building.

    Instead of asking every visitor to subscribe to their website they only triggered this to the customers who were in the final stages of buying their product. Through this, they began a friendly re-engagement campaign for their customers.

    This strategy has really helped them to win back inactive customers and resulted in a 60% increase in their conversion rates.

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    Conclusion

    Ecommerce automation in all its capacity is helping businesses to grow online. The different services are offered as per the business requirements. They help in better utilization of time, money, and resources as well as help in improving customer satisfaction.

    These tools are designed to streamline the workflow and increase work engagement. Overall, the Ecommerce automation tools are worth your money, time, and efforts.

    FAQs

    Why do companies use eCommerce automation?

    Many companies use eCommerce automation to streamline workflow, save time, boost efficiency, and also help boost customer satisfaction.

    What is workflow automation in eCommerce?

    Workflow automation is when repetitive tasks are done with the help of automation tools instead of humans.

  • How Can Ecommerce Personalization Help You Increase Conversion?

    The COVID-19 pandemic has had impactful destruction worldwide. However, it has helped e-commerce market sales soar to great heights. As per recent reports, the Global E-commerce market is expected to cross the $5.5 trillion mark by the end of 2022. The growth rate of the market is expected to rise to 24.5 per cent by 2024.

    Standing in the e-commerce industry isn’t everybody’s cup of tea. Big companies, such as Amazon, Flipkart, and Sephora have captured 60-70 per cent of the market. When it comes to customer acquisition, this sector has cut-throat competition. Hence, it’s essential for every e-commerce website/app to have a personalized marketing strategy – for a better user experience. In this post, we have talked about eCommerce personalisation and how to employ it to increase conversion rates.

    What Is Ecommerce Personalization?
    How Ecommerce Personalization Can Help You Increase Conversion?
    Ecommerce Personalization Ideas
    Examples of Ecommerce Personalization

    What Is Ecommerce Personalization?

    Ecommerce Personalisation is a technique that furnishes brands/businesses with a unique personalized marketing ideology. The marketing strategies are entirely based on how users interact with the brand – to allow an ultimate shopping experience.

    eCommerce personalisation is in real demand at the moment. And that’s because of the perfect utilisation of data sources. Depending on the order history, user search, customer location, browsing data and user-generated data, the brand uses unique personalisation to build a top-notch customer experience.

    The primary motive behind these personalisations is to show customers what they want to see and when they want it. So, customers get the relevant recommendation based on their preferences. All these undertakings are monitored using AI-based personalised software.

    How Ecommerce Personalization Can Help You Increase Conversion?

    Unlike a physical store, increasing the conversion rate in an online store is a difficult task unless you know what customers need. In a physical store, you have a chance to influence the mind of your customer by communicating. However, in online mode, it’s not happening. Thus, eCommerce Personalisation offers the audience every possible thing they would wish for.

    With the user-generated tool, the brand understands the interest of the audience and estimates their responses. After all, every shopping brand seeks more information to provide a better shopping experience the next time.

    Customers like to visit places where they get a user-friendly environment and where they are taken care of. So, the only way to make all of these things possible is personalisation.

    A survey report provides the data, facts and stats that confirm – personalisation helps increase conversion rate. Almost 73% of the people prefer a personalized shopping experience. And, almost 90% of them accept that personalisation influences their right purchasing judgment.

    Ecommerce Personalization Ideas

    Here are some of the ideas on which Personalisation works:

    Recommend the latest viewed products

    It happens quite frequently that users might be interested in a specific product, but they forget to add it to the cart. Thus, this recommendation strategy will help customers start their shopping at the place where it ended.

    Example of recently viewed products
    Example of recently viewed products

    Personalized product recommendation

    Along with the previously searched product, you may recommend related products to the consumers. Personalizing product recommendation is one of the widely used eCommerce personalized ideologies. As per the report by Barilliance, personalized product recommendation generates up to 31%  of the total revenue of an e-commerce site.

    Example of related products
    Example of related products

    Create a personalized best-selling product list

    You may create some sort of best-selling products list based on the user’s interest. It will act as a quick recall of the product they wished to buy earlier. This increases the chance of a conversion.

    Allow UGC to work accordingly to help visitors

    UGC works on the FOMO (fear of missing out) principle. It displays unique products that are used in daily life. Hence, creating a fear of missing out on the environment. It influences the customer’s mind that they might buy this product so that they don’t miss something.

    Personalize the home page with recent searches

    As mentioned earlier, Amazon uses this homepage personalisation technique to boost customer acquisition. It bestows an easy-to-use interface where consumers can find products of their kind on the home page.

    Carry out an automated personalized email campaigns

    Email campaigns are one of the primary steps to building a powerful user channel. It keeps you ahead of your competitors. Automated personalized email campaigns keep on reminding the customer about your assistance. Thus, increasing the chance of a conversion.

    Example of cart abandonment email
    Example of cart abandonment email

    Offer category-specific promo codes

    Promo codes have always been a customer favourite part. It attracts them to certain product categories. Once you issue these category-specific promo codes, you may either send in an email or a pop-up message to keep your user up-to-date.

    Example of promo code
    Example of promo code

    Seek a customer’s feedback request

    One of the most effective ways to know your customer requirements is to request customer feedback. It helps the brand improve personalisation techniques for that particular user.

    Example of customer feedback
    Example of customer feedback

    Show pop-ups considering the previously viewed products

    Pop-up ads should always be the first preference while personalising a website. For instance, if the user is a first-time visitor, the pop-up will encourage them to subscribe and avail discount on the first purchase.

    Example of Ecommerce Personalization

    Still, confused with the principles and working of E-commerce Personalisation? Below listed are a few examples to assist you further for a better understanding.

    Amazon

    Amazon is the father of all eCommerce personalisation companies. Once you click on the app or website of Amazon, you’ll be redirected to the home page. There, you’ll find numerous personalized product recommendations.

    Amazon automates all the data of your phone and recommends the products you recently enquired about. It uses search data, recent purchases, locations, and other data to provide particular recommendations.

    Amazon recommendations
    Amazon recommendations

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    Conclusion

    If you wish to conquer the eCommerce sector, you should consider Personalization. Ecommerce personalization keeps your user engaged, provides a user-friendly experience, and increases conversion.

    Personalization in eCommerce is vital as it ensures customer acquisition. Besides, it not only helps you stand out from your competition but helps build grounded/human-like connections with the buyers. It also furnishes customers full control, improving the user experience. This, in turn, boosts conversion rates!

    FAQs

    What is eCommerce personalization?

    Ecommerce personalization is when a company displays the product to the consumers based on demographics, intent, preferences, browsing history, previous purchases, and device usage.

    What is an example of personalized marketing in eCommerce?

    When an eCommerce store recommends your products based on your interest, location, and browsing data.

  • Don’t Go Outside, Dakoo Is Coming!

    Insights shared by Avkash Kumar, Founder & Director, Dakoo.

    Understanding the market’s need, Dakoo, a hyperlocal marketplace & delivery platform founded by Mr. Avkash Kumar in 2021, is dedicated to bringing the latest technologies to the market. What started as a modest beginning for Avkash Kumar in 2021 during the ideation phases of his hyperlocal eCommerce platform, to what the nation is going to recognize soon as a tech franchise brand “Dakoo”, – his journey has traversed many complexities of a true entrepreneur. In 2021, 2x start-up founders Priyam and Avkash, two IIT Kharagpur alumni, sowed the seed of a hyperlocal marketplace & delivery platform Dakoo, with the mission of empowering local businesses.

    Priyam and Avkash - Founders of Dakoo
    Priyam and Avkash – Founders of Dakoo

    Dakoo is looking to provide a superfast home delivery ecosystem just like Zepto. They have fast-growing start-up founders, just like their brand vision, with big dreams of getting into every Indian’s life and city, not only metro cities. Following the “Vocal for Local” motto of our honourable PM, Dakoo is also looking to decentralize the e-commerce industry by empowering the local vendors of India.

    Dakoo Tech Franchise allows small businesses to own recession-free tech businesses in their city and be a part of an exciting and innovative movement. When each city has its own eCommerce platform, local vendors can easily sell their products online and this will ultimately strengthen the local economy. With the advent of the franchise model, Dakoo is committed to bringing this technology to every city and town in India to help small businesses and entrepreneurs to grow exponentially especially considering the post covid situation.

    From Finding The Problem Till Getting Their First Seed Funding Of INR 2 Crores, Dakoo Super App Brings In Local CEOs Of Dakoo To Every City!

    India is a country with many cities. There are tier-one cities like Kolkata, and Mumbai; tier-two cities like Surat and Jaipur, and tier-three cities like Mangalore. India is predominantly a rural country, but people from tier 2 and 3 cities migrate to bigger cities for education or job opportunities. This leads to the unavailability of many employment opportunities in these smaller towns, which is a big problem for those staying there. Dakoo will provide thousands of employment opportunities in these areas in the near future by empowering the local economy. In India, 60% of local retailers are not digitally enabled.

    Dakoo Tech Delivery
    Dakoo Tech Delivery

    Out of the massive $1.1T Indian local retail market, more than 90% of FMCG sales take place through local retail. India has almost 86% of consumers who shop locally. Thus, statistically, most e-commerce players are projected to prefer Dakoo’s logistics service over other players because it can be scaled up with less cost. Dakoo’s business model is all about ensuring that small entrepreneurs get enough orders to sustain their businesses who are suffering from daily orders due to the easy accessibility of big Indian eCommerce giants.

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    How Dakoo Solves The Problem?

    Startups and small businesses face a lot of challenges. And while there are programs to help, they don’t solve one of the entrepreneurs’ biggest challenges: Time. Dakoo looks to help small businesses across multiple industries with marketing and sales services through an easy-to-use digital platform. To ease out ventures like start-ups and small businesses, which face a lot of challenges, Dakoo Super App brings in an entire framework of apps for Customers, Merchants, and Delivery agents with regular updates. This helps to enhance product quality as well as customer experience. Dakoo offers free home delivery from any local shop, whether it’s a vegetable shop, Grocery store, Restaurant, Thela, Electronics shop, or Supermarket. All deliveries are completed within 25 minutes by Dakoo’s super-strong delivery ecosystem. Dakoo plans to reduce this delivery time to 15 minutes by the year of 2023. Bringing this kind of comforts and privileges of metro cities to tier 2 and 3 cities, while competing in tier 1 cities simultaneously, is the goal of the super app. Dakoo also plans to bring an electric vehicle hailing platform to tier 2 & tier 3 cities in the near future. The company has a dedicated team of professionals who work hard to ensure that its products can meet customer expectations. They also provide a Franchisee App, which helps handle the city monitoring and management dashboard. It also allows them to control multiple delivery agents through just one app.

    The best part that would give a boom is the system of making sure to keep track of all orders placed by various customers using different delivery partners. It enables them to maintain high transparency throughout their entire business process. Apart from ensuring that they deliver the best services to their clients, they have made sure that they can make payments easily and quickly without any issues or delays. This helps them achieve maximum productivity without compromising service quality or efficiency levels. Dakoo also offers digital marketing services such as Digital Marketing, guerrilla marketing & branding material, Marketing pitch, onboarding & training Videos for merchant & delivery agents, the Initial level of Customer support, Merchant support & Delivery Agent support. This helps businesses gain visibility online, thereby increasing sales volume significantly.

    Grow your Sales using Dakoo
    Grow your Sales using Dakoo

    Want to Operate with Dakoo? Know How!

    Dakoo was designed to help entrepreneurs reduce costs and complexity. If you wish to use Dakoo you have to follow these steps.

    • You can Hire delivery agents who will be paid per delivery directly via the app.
    • Convince Merchants in your city to join Dakoo, using our marketing pitch video.
    • Conduct offline marketing & branding campaigns with materials provided by Dakoo.
    • Manage delivery escalation & feedback improvements.

    You will be responsible for any and all taxes and fees related to your business, as well as complying with local laws and regulations. This includes VAT, corporate tax, income tax, and more. You will also be responsible for any legal liabilities or other financial commitments that may arise from running your business. Make sure you comply with all applicable hiring laws and regulations, as well as labour standards. Protect your data by complying with all applicable data protection laws. And finally, make sure you are compliant with all intellectual property laws. The company recently took 10,000 interviews and going to award franchises to top 100 entrepreneurs.

    Dakoo award franchises to top 100 entrepreneurs
    Dakoo award franchises to top 100 entrepreneurs

    Growth Plans and Future Roadmap

    Dakoo’s service is growing in popularity among local entrepreneurs and small businesses. The company is focusing on building a system that can grow alongside them. In the next few years, they hope to leverage artificial intelligence to create a single platform where eCommerce and digital marketing are closely tied together. Dakoo recently secured INR 2 Cr from the Founders of FlyDining, helping them complete their vision of digitizing the local market. The investors, Mr. Pankaj Dhingra, Mr. Samir Dhingra and Mr. Shubham Singhal, have shown faith in the business model of Dakoo and invested for the better future of India.

    Being open to co-branding opportunities with EVs and looking to launch in tier 2 and 3 cities, Dakoo is all set to become an important part of how thousands of local business owners run their online operations. As soon as small businesses grow beyond local exposure and word-of-mouth promotion, it’s time to map out a growth strategy. Ideally, that means creating a set timeline based on specific milestones. Without these milestones ahead of time, it can be difficult to make smart decisions about how best to spend marketing dollars down the road when cash flow becomes an issue. If money is tight right now, consider scaling back advertising costs temporarily until revenue hits another level again. Here’s where all Dakoo will serve as a real Dakoo, for as a good one, for thousands of entrepreneurs and their businesses!

  • How to Run Ads on Amazon and What Should You Know to Plan a Successful Advertisement Campaign?

    Amazon is the largest online retailer across the world. In 2020, it generated revenue of US$ 120,968 million becoming the leading e-commerce market, globally.

    Approximately 197 million people use Amazon worldwide. In the U.S. alone 95 million people have Amazon Prime membership and spend an average of around $ 1400 each year.

    Therefore, advertising and listing your products on Amazon gives you an unmatched opportunity to create awareness and visibility of your products and boost sales. Moreover, as Amazon is trusted by millions of users seeing your product or brand advertisement on Amazon makes them appear more authentic and reliable.

    Hence, advertising on Amazon becomes a very important part of your marketing strategy. However, a number of people complain that they are unable to derive the desired returns.

    They claim to spend a huge amount of money on advertising but cannot get enough customers. If this is happening with you as well then this blog is meant just for you.

    Advertising your products on Amazon and increasing your sales through it can be complicated. In this blog, we will share the tips and tricks that will help you throughout this process and help bring more sales.

    But, before we tell you about the tips to follow for a successful advertisement strategy, let us first discuss in brief how Amazon ads are created.

    How to Run Ads on Amazon?
    What Should You Know Before Running Ads on Amazon?
    Types of Advertising Campaigns on Amazon
    Tips to Create and Run a Successful Ad Campaign on Amazon

    How to Run Ads on Amazon?

    Advertising on Amazon is a great way especially for the new sellers to create brand awareness. Let us see how to create and run ad campaigns on Amazon.

    Amazon allows you to create two types of advertisement campaigns. They have sponsored brand campaigns and sponsored product campaigns. The first can only be created by the sellers who have registered a brand with Amazon while the latter can be run by any seller.

    Amazon Sponsored Product Ads
    Amazon Sponsored Product Ads

    Both these campaigns are meant to increase product or brand awareness and visibility that in turn increase the sales of the product.

    The next thing you need to understand to run an advertisement campaign is bidding. Amazon does not charge you for running ads but as soon as a user clicks on your product to see the details an advertisement expense is deducted irrespective of whether or not the visitor buys the product.

    This amount depends on the bid that you place while setting your advertisement campaign. In case two sellers are selling similar products, the product of the seller who has placed a higher bid will be shown on the top.

    Now let us see the step-by-step process of how to run advertisements on Amazon.

    Creating Campaign

    • First of all, log in to the Amazon Seller Panel.
    • On the top of your screen, you will see a number of options such as catalog, inventory, pricing, etc. Click on the Advertising option. A list of options will come down. Click on the Campaign Manager option.
    • On the next screen, you will find a tab “Create Campaign”, click on this.
    • The next screen will ask you to choose your campaign type. This includes the two options as stated earlier i.e. sponsored products and sponsored brands.
    • You can choose the option suitable for you. For reference here, we will go with sponsored product option.
    • As soon as you click continue the next screen will open that has multiple questions related to running the advertisement campaign.
    • The first column is the campaign name. You can choose any name that may help you in easy identification later as this will only be visible to you.
    • The second column asks you about the start and end date of your advertisement campaign, you can choose this as per your convenience.

    Setting the Budget

    • The next option requires setting the daily budget of your advertisement campaign. This is the amount that you are willing to pay every day to run the campaign. Amazon desires this amount to be greater than Rs. 50 per day.
    • As explained earlier Amazon only charges the advertisement expense when a user clicks on your product to view details. Hence, the daily budget amount also depends on your per-click bid. For example, if you have set the bid at Rs 5 per click and the daily budget at Rs. 100, as soon as 20 users click on your product, your daily budget will exhaust. Therefore, the higher the daily budget the longer your product will be visible to the customers. Mostly, it is suggested to keep the daily budget around Rs. 500 as it runs throughout the day.

    Targeting

    • The next option is targeting. Here, you will find two options i.e. automatic and manual targeting.
    • In manual targeting, you will have to choose the keywords through which your product will be displayed to the viewers while in automatic targeting Amazon decides the keywords on its own.
    • If you are a beginner it is better to choose automatic targeting to see the viewer response first.
    • The next option is a campaign bidding strategy. There are three options to choose from viz. dynamic bid – down only, dynamic bid – up and down, and fixed bids.
    • The first option lowers your bid when the ads are less likely to convert into sales. The second option raises or lowers the bid in real-time depending on the possibility of conversions. The third option keeps the bid fixed.
    • Now, you will have to create an ad group. You can add multiple ad groups in a single campaign.
    • The first column is to select the name of your ad group which will only be visible to you.
    • The next option is to choose the product for your advertisement. Here, we would suggest choosing the product from a single category while in a particular ad group.
    • Now, you will have to choose the automatic targeting where you will find two options set default bid and set bid by targeting group.
    • We recommend choosing the first option if you are just a beginner and also choosing your bid as suggested by Amazon as this increases the chances of sales.
    • Next column negative keyword targeting is optional. You can leave this option blank if you are just beginning.
    • After a month or more of running your advertisement campaign, you can add the keywords in this column that do not bring any sales to your product.
    • The final step is to click the “Launch Campaign” button. Your advertisement campaign will be launched as soon as you click this option.

    Now, when we know how to run an advertisement campaign on Amazon we can now move forward to understand how to make our advertisement campaign successful.

    What Should You Know Before Running Ads on Amazon?

    Even when Amazon offers you a broad platform to create brand awareness and visibility, not all advertisement campaigns running on Amazon can be called successful.

    The reason for this is the money spent on these campaigns, which is quite high in comparison to the sales brought through them.

    As per a survey, the annual advertisement cost on Amazon increased from 16.9 billion U.S. dollars in 2014 to 10.9 billion U.S. dollars in 2021.

    Annual Advertising Costs of Amazon
    Annual Advertising Costs of Amazon

    This indicates that more and more retailers on Amazon are now opting to run advertisement campaigns. This has obviously increased the price of advertising but the sales are also increasing at an equal speed.

    However, many vendors still cannot get the conversion rates they desire. They should understand that advertising for different brands and products is different and requires a unique strategy.

    Types of Advertising Campaigns on Amazon

    Amazon offers six different types of advertising campaigns. They are:

    Amazon Sponsored Ads

    As explained above these are the pay-per-click and keyword-targeted ads. These are displayed on the top of the page when a viewer searches for a product.

    Amazon Headline Search Ads

    Also known as the sponsored brand campaign these are the keyword-targeted ads that are displayed alongside the search results.

    Amazon Product Display Ads

    These are also the pay-per-click ads that appear on customer review pages, product detail pages, below the search results, and on top of the offer listing pages.

    Amazon Native Ads

    These are of three types viz. recommendation ads, search ads, and custom ads. These ads can be displayed on your brand’s own website.

    Amazon Video Ads

    These ads can be placed on Amazon-owned sites and devices such as IMDb, Amazon.com, Amazon fire TV, etc.

    Amazon Stores

    These are the multi-page online stores on Amazon that can be used by the seller to promote their brands.

    Each of these campaigns is meant to grab the attention of viewers and increase the conversion rate of the product. You will have to choose the advertising strategy best suited for your product or brand.

    Also, your work is not over just by choosing the strategy and launching a campaign. A routine and thorough analysis of your campaign, including the new trending keywords and discarding the old ones, and making other required changes regularly should be an essential part of your advertising campaign.

    After all, this, remember that every marketing strategy is different and every product or brand requires unique advertising practices to get noticed there are certain basic rules that make a difference.

    Tips to Create and Run a Successful Ad Campaign on Amazon

    Below we have mentioned the 6 tips to create and run a successful advertisement campaign and boost your sales on Amazon.

    Identify your goals

    Are you trying to boost your conversion rates or just increase your brand awareness? Whatever your target be it should be clear to you so you can choose the right marketing strategy and implement it correctly.

    This will also help you identify the right metric to measure your success. For example, if you are focusing on increasing your sales Advertising Cost of Sales (ACoS) can be the right metric. Similarly, if you are here to create brand awareness customer impressions can be a perfect fit for you.

    The product page of Amazon is divided into objectives to help you easily choose the best-suited advertisement strategy for your brand or product.

    As explained earlier Amazon only charges the advertisement fee when a user clicks on your ad to view the product details. To make every click count you must advertise the best of your products so that maximum numbers of clicks turn into sales.

    You must also ensure time and again that the advertised products are available in stock and competitively priced.

    It is also advised to choose the products that display the featured offer on Amazon. When several brands are selling the same product, Amazon combines them into one product detail page.

    If your product becomes a part of a featured offer, it will definitely increase the visibility and sales of your product.

    You can use a number of measures to make your product the featured offer such as pricing your product reasonably, including multiple shipping options or free shipping wherever possible, offering support services to ensure happy and satisfied customers, and reviewing your inventory.

    Strong title and compelling details

    This is one of the most ignored but impactful steps. The title of your product is the first impression for the potential customers. Therefore, it should be strong and catchy.

    You can include details such as brand name, product type, size, color, material, key features, quantity, etc. in the title. The best titles are usually 60 characters long, easy to read, and informative.

    Next, come the product details. An attractive title might tempt the user to click on your product but the precisely crafted, clear, and concise details are the reason most users buy a product.

    It is always a good idea to include multiple bullet points in the description of your product. The shoppers today are smart and capable of making informed decisions. Your responsibility as a seller is to guide them in making the right choice.

    The product description must provide the details such as uses, content, dimensions, origin, operational considerations, etc. of the product.

    The product description is the small narrative of your product so it must be crisp and clear including all the necessary details. Apply the unique voice of your brand while writing the description. This will help you create a positive user experience.

    You must also include high-quality, zoomable images of your product. This will help provide the user with a clear picture of what to expect. If possible also include a short demo video highlighting important features and details of the product.

    Select the right channel to advertise:

    Amazon offers multiple options for you to display your product advertisement. For example, voice ads can be put on Alexa-enabled devices.

    Choose the right channel to advertise your product.

    Get creative with your ads and give them a unique positive tone that reaches the customer and rings a bell.

    Also, you must choose the right advertising campaign for your product between sponsored brand and sponsored product. While the first type of advertisement is meant to increase brand awareness the latter helps you boost the individual product sales.

    Category-specific targeting

    While looking for products on Amazon you must have seen the heading “Product you might be interested in”. This is category-specific targeting.

    Basically, the advanced targeting functionality feature of Amazon gives you the opportunity to display your products along with the other products belonging to the same category.  This helps you enhance the effectiveness of your ads.

    Displaying your products alongside the other famous brands and top-rated products makes them look more reliable and allows you to increase brand recognition.

    Choose keywords wisely

    Keywords are the essence of your advertisement so it is highly crucial to choose them wisely. The right keywords can really make your brand popular.

    Choose specific keywords that are likely to be used by high-intent people. Include important details of the product as keywords that may be of interest to the target audience.

    Also, it is equally important to get rid of negative keywords that do not serve the purpose of your product. These keywords just increase your ad spend without bringing any traffic.

    You must regularly check the viewer response to include the new trending keywords in your advertisement strategy and remove the old redundant ones.

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    Conclusion

    Amazon being the largest online marketplace worldwide provides you with the platform to reach a much wider than possible through any other way. However, without an impactful marketing strategy, it can be difficult to create brand awareness or boost sales through this great platform.

    By using the simple tips for running a successful advertising campaign on Amazon mentioned in this blog you can definitely increase the visibility and sales of your product on Amazon. You can thank us later.

    FAQs

    Can you run ads for Amazon products?

    Yes, you can run ads on Amazon for your products. Amazon ads are a great way to increase the visibility of your product and get on the front page of Amazon.

    Is it free to advertise on Amazon?

    Ads on Amazon work on cost-per-click ads, if a user clicks on the ad Amazon charges you.

  • Amazon Cloudtail India: Why Did It Shut Down? | Is It Good News for Retailers?

    If you have ever tried to buy or sell products on Amazon, you must have come across this brand “Cloudtail India”. It used to be the largest seller on Amazon in India but has recently ceased its operation.

    This joint initiative of Amazon and Catamaran Venture was shut down on 19th May 2022 leading to the end of a seven-year-long partnership between the two well-recognized organizations.

    Before announcing the end of the partnership Amazon India announced a 100% acquisition of Cloudtail India. The employees earlier working for the joint venture has been given the option to continue at Amazon or take a voluntary exit.

    In this blog, we will discuss everything about Cloudtail India, how it worked and why this successful partnership was brought to an end with mutual agreement between the two parties.

    If you are associated with Amazon, either as a seller or a buyer, this is important for you. If you are asking “Why”, keep reading this blog till the end.

    What is Cloudtail India?
    How Did Cloudtail India Work?
    What Went Wrong With Cloudtail India?
    Is Shutting Down of Cloudtail India Good News for Retailers?

    What is Cloudtail India?

    Catamaran Venture is a venture capital firm i.e. it funds the startups or other organizations that require capital. The net worth of the company is around $ 127 million. It is headed by N.r. Narayana Murthy has made investments across high-growth sectors such as technology, eCommerce, healthcare, etc.

    Amazon started functioning in India in 2013. It was the time when the online market in India was least developed and Amazon had to work hard to get customers.

    For this reason, in 2014, Amazon India and Catamaran Venture initiated a joint venture under the name Prione Business Services. The basic objective of this venture was to bring more small retailers and businessmen online.

    This on one hand would help the retailers to expand their market and reach more customers and on the other hand, helped Amazon to earn a reputation and recognition in the country.

    Prione Business Services contributed quite a lot to advancing the online market in India. It provided support systems for the retailers or merchants by helping them with issues as small as listing or describing their products on Amazon.

    According to the statement, Prione enabled more than 300,000 sellers and entrepreneurs to establish their online market. Also, it helped 4 million merchants with digital payment capabilities.

    However, in the same year i.e. 2014, Prione also established its very own subsidiary company in India, under the name “Cloudtail India Pvt. Ltd.” which was engaged in the B2C retail business.

    Under Prione’s ownership, Cloudtail worked as an online retailer and by the end of 2020, it was selling over 30 lakh products under multiple categories such as fashion, apparel, appliances, media, consumables, etc. on Amazon.

    No doubt, Cloudtail India became the largest seller on Amazon leaving its other competitors behind with a great margin.

    How Did Cloudtail India Work?

    At present, Amazon has over four lakh sellers and more than two crore customers registered with it.

    The normal procedure for retailers to sell their products on Amazon includes registering themselves on the website. After this, the sellers list their products on the website with the price that also includes the profit share of Amazon.

    Generally, this profit share lies between 5-25% depending on the product category and price. This share includes commission, fixed fees, and other similar charges.

    As the seller has to earn profit by selling these products, some amount of profit share is included in the price of the product due to which the customer has to buy the product at slightly higher rates.

    The price of the product further increases as the vendor also has to pay delivery charges to Amazon which start from Rs. 82/- onwards. Moreover, these sellers also have to bear the promotion charges for their product which again adds to the price of the product. Therefore, the prices at which the customer has to buy the products of these brands are quite higher in comparison to what the seller would offer without including these charges.

    However, as Amazon had its own equity in Cloudtail India Pvt. Ltd. the company does not pay any commission to Amazon for listing or selling its products. There is no delivery or promotion fee included for any of the products sold by Cloudtail.

    Due to this the prices of the products obviously remain quite low in comparison to its competitors. This gave Cloudtail India an edge over other retailers.

    Moreover, being the parent company Amazon prioritizes the products sold by Cloudtail India by always listing them at the top of the page. This further increased the sale of products making Cloudtail India Pvt. Ltd. the biggest seller on Amazon.

    Amazon Cloudtail India Business Timeline
    Amazon Cloudtail India Business Timeline

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    What Went Wrong With Cloudtail India?

    As per the law, India prohibits Foreign Direct Investment (FDI) in inventory-based models for eCommerce. This means that the companies such as Amazon and Flipkart are only allowed to work as a marketplace.

    These companies are only permitted to provide platforms to other sellers or merchants or businesses to enlist their products and sell them but they cannot list their own products on the platform.

    Due to this legal concern, a number of objections were being raised by other retailers and merchants selling their goods on Amazon about the close partnership between Amazon and Catamaran Venture.

    In this regard, the Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and Industry issued a Press Note on 26th December 2018.

    This note clearly disallowed the participation of marketplaces in any type of seller activity even through any “Group companies”. This means that these platforms are not allowed to sell their own products on their platform as this would hamper the business of other small retailers.

    Here, Group Company meant two or more enterprises that directly or indirectly exercise 26% of the voting rights in another enterprise or appoint more than 50% of the board members in their entity.

    To abide by this law, Catamaran Ventures 2019 increased its stake in Cloudtail India from 51% to 76%. Thus, the stake of Amazon in the joint venture was reduced from earlier 49% to 24% later.

    Therefore, as Amazon now had only a 24% share in the joint venture, and the law spoke about 26% or more share, Cloudtail India Pvt. Ltd. could still sell products to Amazon without violating any law.

    Even after this, the small businessmen and other retailers or vendors on Amazon claimed that the parent company of Cloudtail India Pvt. Ltd., i.e. Prione Business Services was established with the intention to help small retailers and sellers to start their online businesses.

    However, as the online market has now gained enough popularity in the country, the target has been fulfilled and the company is no longer required.

    In 2019, Delhi Vyapar Mahasangh (DVM) submitted a plea with the Competition Commission of India (CCI) against Amazon and Flipkart.

    In this plea, they accused these marketplaces of abusing their market dominance and preferential listing and deep discounting on products sold by selected vendors in which they control indirect stakes.

    They alleged that these marketplaces were drawing indirect benefits from these brands indicating a conflict of interest. Due to this, the online market of small businesses is getting hampered as they are unable to efficiently reach their target customers.

    In this regard, the Director-General of the Competition Commission of India launched an inquiry for alleged violation of Section 3 of the Competition Act, in January 2020.

    To resolve this issue, Catamaran Venture and Amazon India first approached Karnataka High Court and later the honourable Supreme Court of India. However, both the courts stated that the companies should be open to such anti-trust investigations in their business practices.

    In the light of this statement, as well as the changing regulatory environment and unfavourable eCommerce operating guidelines, both the companies announced the end of their seven-year-long partnership.

    Hence, Cloudtail India was finally shut down.

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    Is Shutting Down of Cloudtail India Good News for Retailers?

    Honestly speaking, Yes. This decision will provide small businesses and other online retailers and vendors a level playing field. Strict regulatory rules were required in this field for a long time which have now been implemented.

    This will also reduce the monopoly of these marketplaces to endorse a few specific brands that bring more indirect profit to them.

    Overall, the small sellers will be benefitted who will now be able to sell their products in a healthy competitive environment.

    Conclusion

    With the partnership between Amazon and Catamaran Venture coming to an end, this is certainly an issue of concern for Amazon as it has invested around $ 1 billion in India.

    Also, the customers might have to buy the products at slightly higher prices as the subsidiary brand is no longer available to provide the products at the least rates.

    However, this will provide equal rights and symmetry to the small businessmen, sellers, vendors, etc. who will now have better opportunities to expand their online market.

    FAQs

    Is Cloudtail India owned by Amazon?

    No, Cloudtail India was a joint venture with Catamaran Ventures but Amazon has purchased a 76% stake in the company and now Cloudtail is a wholly-owned subsidiary of Amazon.

    Is Cloudtail India shutting down?

    Yes, Cloudtail India will shut down its operations on May 1.

    Who is the owner of Cloudtail India?

    Prione Business Services Private Limited was the owner of Cloudtail India.

    Why did Cloudtail India shut down?

    As per e-commerce regulations, online marketplaces cannot own any direct stake in seller entities which is the reason Cloudtail India has to shut down its operations.

  • How to Make Impressive Use of 404 Page on eCommerce Stores to Boost Conversion?

    Frequent online shoppers must have come across a 404 error page at least once during their online shopping journey. As the site keeps getting bigger, so do the chances of encountering such pages. An eCommerce store can render a 404 error page for several reasons.

    For example, the site owner may have forgotten to permanently delete the page without any redirect, poor server configuration may be causing the problem, or the page is currently unavailable because it is being worked on. The reasons can be several, but the eCommerce store owner cannot take the risk of losing potential sales because of an error page.

    To ensure store owners make the most from 404 error pages, we’ve analyzed hundreds of eCommerce stores to check how they tackle this problem. After studying various eCommerce stores, we’ve handpicked and listed below some of the best ways to boost conversions from 404 error pages. Let’s quickly head to the list shared below.

    Pitch in Your Most Popular Products
    Display Product Categories with Working Links
    Incorporate a Product Search Bar in the 404 Page
    Sprinkle Some Humor or Add a Surprise Element
    Skyrocket eCommerce Sales by Optimizing 404 Pages

    If a visitor landed on the 404 page, he was looking forward to buying a product from the online store. This opportunity should not be wasted. The best way to monetize such situations is by recommending some of the most popular products on the 404 page. Something like Urban Outfitters does.

    Urban Outfitters 404 Page
    Urban Outfitters 404 Page

    Their entire 404 page is divided into two sections. The top section features an old-style black and white GIF stating the page can’t be found. At the same time, the second and lower part displays the most popular products with high-quality image and product name. Since the best and most sold products are shown, the visitor may be tempted to check them out and make a purchase.

    Since this is an excellent way to optimize the 404 page, Urban Outfitters isn’t the only eCommerce store following this method. Steve Madden, a popular shoe-selling online store, also follows a similar approach for maximum conversions.

    No shopper would appreciate landing on a dull 404 page. If the eCommerce store only tells the visitor that the page doesn’t exist, the chances are rare that the visitor will continue browsing the same site. He may instead prefer going back and looking for better-optimized eCommerce stores.

    To prevent this from happening, provide the visitors with a starting point once they reach the 404 page. An excellent way to do it is by adding category pages.

    Missguided 404 Page
    Missguided 404 Page

    Take a look at the 404 page from Missguided, for example. It tells the visitor that the site couldn’t find the page they were searching for. But they don’t end there. The 404-page message is quickly followed by the line “let’s get back on track.” Visitors can see a list of categories with relevant images just below this message.

    It prompts them to start their search again by simply clicking on any of those categories.

    For example, if a visitor was searching for tops, they can click on the “tops” category instead of leaving the eCommerce store. It will boost the chances of the visitor making a purchase. Birchbox is another eCommerce store that follows a similar approach to increase conversions.

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    Incorporate a Product Search Bar in the 404 Page

    When visitors visit a particular eCommerce store knowing what they want, converting them becomes much easier. But missed sales are guaranteed if they accidentally land on a 404 page that isn’t optimized.

    It is why various big eCommerce stores are taking appropriate measures to ensure visitors don’t leave their site after coming across a 404 page. Take Etsy, for example.

    ETSY 404 Page
    ETSY 404 Page

    It is one of the biggest eCommerce marketplaces and knows how to bring back lost sales. It gives visitors two options – type for the relevant product in the search bar or heads back to the homepage.

    These two options give visitors a reason to stay back instead of abandoning the site. Since it becomes difficult to anticipate what each visitor is looking for, giving them an option to search their way out is one of the best-performing ways.

    It is why Etsy is not alone in adopting this approach. eCommerce stores like Need Supply Co., Ted Baker, UnderArmour, etc., follow a similar template while designing their 404 pages.

    Sprinkle Some Humor or Add a Surprise Element

    Making a prospective customer annoyed or frustrated is always a big no for eCommerce store owners. It takes them away from the brand and reduces their chances of returning for future shopping.

    To prevent such events, eCommerce brands should adopt a more personal or humorous approach. Everyone can take inspiration from Amazon, the biggest eCommerce platform on the internet.

    Amazon error 404 Page
    Amazon error 404 Page

    Whenever a visitor lands on a 404 page, Amazon displays a picture of one of its ‘dogs of Amazon’ to make them feel less annoyed. Everyone loves dogs; hence, this approach works in most cases.

    No one expects to see a smiling dog when landing on a 404 page, so it makes them giggle a little instead of making them feel annoyed. Another aspect of this page is a direct link to the homepage.

    Now that the dog’s picture made the visitor smile, he can continue searching for relevant products by returning to the homepage. eCommerce store owners can either replicate the same strategy or make some tweaks to make the 404 page look humorous. It will help prevent visitors from going to another online store.

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    Skyrocket eCommerce Sales by Optimizing 404 Pages

    A mistake some eCommerce store owners make is ignoring their 404 page. They forget that these are also part of the website that needs proper optimization for better conversions. eCommerce store owners that desire high sales must develop unique 404-page optimization methods.

    They can either design their own optimization ideas or pick one from this article. No one can entirely prevent visitors from landing on 404 pages, but efforts can be made to ensure they don’t leave the site without making a purchase. So act wisely.

    FAQs

    What does the 404 error indicate?

    404 error is a Hypertext Transfer Protocol standard response code that indicates the server was unable to find what was requested.

    What is 404 error in eCommerce websites?

    404 error in eCommerce websites indicates that the webpage is down to a misspelled URL, a broken link, or a product page doesn’t exist anymore.

    What are the best ways to optimize 404 error pages on eCommerce websites?

    Some of the best ways to make your 404 error pages of eCommerce websites impressive are:

    • Pitch in Your Most Popular Products
    • Display Product Categories with Working Links
    • Incorporate a Product Search Bar in the 404 Page
    • Sprinkle Some Humor or Add a Surprise Element

  • The Challenges and Winning Strategies of Selling Products Digitally

    The article is authored by Nishit Nanda – CEO, Youlry.

    Where once, jewelry was seen as an important part of daily rituals – later evolving into something of a political statement, late-stage modernity sees it through the lens of the personal. Which begs the question – how do you sell something intimate to the body and to the wearer that by its very nature, distances itself from a physical experience, while keeping it authentic at the same time? The crux of it all – selling jewelry online with its virtual carts and anticipation is still undergoing a learning curve. Especially for brands in India where digital is in its infancy when it comes to the consumer experience journey.

    Designer or not, the value of its parts requires fine jewelry to be expensive. However, beyond product merit, brands are now in the race to create other forms of value that are more evolved for the current crop of target groups

    The luxury market and specifically fine jewelry arrived fashionably late to the online retail space in 2018. For a lot of legacy brands that were trend adopters rather than trendsetters, the main reasoning for this delayed entry was the flawed reasoning that online would be detrimental to brand image, leading to the loss of a certain touch-and-feel immersive experience of brick and mortar high street stores. This was all taken down a notch as 2019 saw luxury brands committing to evolving their hunting grounds despite a slowing global economy, to win over Millenials and Gen Z. As far as fine jewelry was concerned, the emergence of an omni-everything strategy seemed imminent.

    Why omni-everything? Because, compared to omni-personal, omnichannel is the easier stop-gap. While omnichannel comes with a checklist: seamless customer experience, consistent point of contact etc. omni-personal is what distinguishes the haves from the have-nots. It is the secret sauce that seeks to understand consumer desire across categories which is where digital joins forces to create a balance of personalization, privacy, accessibility, and security with dedicated soft touches that are luxury-ready. To say the least, this is more important than ever in a post-pandemic world where brands were thrown into a tailspin because of market flux and supply chain disruptions.

    A big shift nonetheless, increased online shopping has led to a mass quickening of trust across segments and fine jewelry is no exception. If the pandemic taught us anything, it is that in the face of crisis, consumers chose accessibility, value, and convenience control over brand loyalty – all factors that had retailers needing a new way of doing business to stay relevant.

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    As the retail landscape reinvents itself, some of the omni-personal strategies tried and tested to prove successful are:

    Being Agile

    Adapting retail strategy through social listening is a good starting point. Which is how born-on-the-cloud brands have begun their personal journeys in the consumer mindscape. Unlike most legacy brands that hurried to become relevant, new-age luxury brands are redefining the term “presence” itself to create likeable, relatable, and aspirational appeal for a consumer segment whose tastes evolve very quickly. In an era of highly informed consumer behaviour, adapting consistently is crucial to brand form. It showcases a brand’s inner ability to swiftly meet the end-to-end needs of shoppers with a digital response rate that is instant – especially when it comes to content creation, deployment, and response.

    Making Data Relevant

    Like Moses, parting the red sea of dirty data – irrelevant information can be quite daunting. This is why it is very important to understand how to utilise data in a meaningful way to avoid ill-targeted marketing communications that hinder personalized shopping experiences in a segment that is high value, high risk, high investment and high emotion. After all, the whole premise of purchasing jewelry whether online or offline is based on trust which needs to be reinforced digitally – a crucial requirement for omni-personal marketing.

    Building Relationships

    Personalising individual shopping experiences while providing superior end-to-end service is not easy within B2C.

    Bridging the digital divide with a human touch, and solving logistical, communication or inventory hurdles in a more likeable and personalised manner is crucial. Sometimes this could mean taking on certain losses that will even out in the long run with gains made in the form of trust, reliability and service quality for creating an exceptional lifetime customer value.

    Adopting an Omni-approach

    Shoppers need a wealth of choices and integration – including but not limited to product catalogues, purchase execution, delivery etc. This is where omnichannel disrupts the traditional sales funnel in exchange for a more personalised, non-linear route that stands for individual choices in terms of brand discovery, research, payment and after-service along with post-purchase. It is a human touch strategy and evolved retail strategy that places the consumer at the centre of a changing landscape.

    Conclusion

    Ultimately it is the responsibility of brands to understand that they do not determine what the customer wants and instead, are there to fulfil evolving consumer needs with a sound strategy across design, development, sales and marketing. In an era that no longer worships commodities or brands but the consumer, it is important to remember that only the personal is personable.

  • How to Evaluate the True Worth of an ECommerce Business?

    Running an eCommerce business has emerged as a highly lucrative and sought-after online business model. It allows you to expand your customer base on a global level without requiring massive investment. If you know all the ins and outs of running a successful eCommerce store, you can rake millions in revenue in an incredibly shorter timeframe. But this is just one way to earn using eCommerce stores.

    Another way is to sell it off for a rewarding price. If you take a quick look at different website flipping marketplaces like Flippa, Empire Flippers, etc., you will find various eCommerce stores listed for sale. The listing price is usually a multiple of the revenue the site generates. If you don’t want the hassle of maintaining multiple stores, you can choose to set up profit-generating eCommerce stores and start selling them for substantial profits.

    But the question is, how will you know the ideal selling price of an eCommerce store? You can do it by evaluating the store’s worth using the following methods.

    Ways to Evaluate the Worth of an eCommerce Store

    Valuation Factors that Matter for ECommerce

    Determine the True Value of an eCommerce Store for Maximum Profits

    Ecommerce Business Valuation

    Ways to Evaluate the Worth of an eCommerce Store

    There are various methods to evaluate the worth of an eCommerce store, but specific methods are best suited for particular situations. You can use any of the techniques shared below that you deem fit.

    Seller Discretionary Earnings

    When evaluating an eCommerce store’s worth, factoring in the seller’s discretionary earnings emerges as the top option. It can be best described as net earnings before tax. To get the most accurate figure, you will have to deduct the total cost of products sold and operating expenses from the sales revenue and then multiply it by a given number. This number ranges from 1.5 to 5 and depends on various factors we will cover later in this guide.

    After deducting these expenses, you can add back any costs that are not deemed mandatory to operate the store smoothly. The owner’s earnings can also be added to gain better clarity on the total revenue. In simple words, the net profit of the past months (generally 12 months) is taken into account and then multiplied by a number (ranging from 1.5 to 5) to ascertain the store’s present worth.

    Discounted Cash Flow Analysis

    Buyers that want to estimate the future return on investment after factoring in inflation should use this method to evaluate an eCommerce store’s worth. Although it is best suited to calculate the worth of traditional, offline stores that are more stable, one can always turn to this option for analyzing an online store’s value more reliably.

    Under this method, you must deduct the last year’s capital expenditures from the operating cash flow. The resultant figure will be the free cash flow for the particular period. Do it for the previous five years to get an accurate cash flow growth rate and discount it according to the WACC of the eCommerce business.

    For the uninitiated, WACC refers to the Weighted Average Cost of Capital. If this looks too technical, it is best to hire a professional to do it for you. If the current Discount Cash Flow (DCF) remains above the proposed investment figure, the investment could result in positive returns in the near future.

    Precedent Sales

    It cannot be termed the primary value evaluation method, but it can help the eCommerce store buyer and seller arrive at figures worth contemplating. If the previous two methodologies weren’t sufficient, try looking at the listed selling price of similar eCommerce stores on online marketplaces.

    The acquisition price of similar eCommerce stores can offer some insightful points for reference. It can get tricky as the valuation criteria are never the same for all stores. Hence before proceeding with this point, predetermine a few key metrics, like company size, annual revenue, years of operation, and other things that are relevant to you.

    Both buyers and sellers can have an unreasonable figure in mind, and checking the precedent sales can give a reality check to both.

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    Valuation Factors that Matter for ECommerce

    Valuation of e-commerce industry
    Valuation of e-commerce industry

    Now that you’re aware of the standard and most popular methods to determine the worth of an eCommerce store, let’s quickly get a brief understanding of the factors that play a crucial role in most valuation processes.

    Store Traffic

    ECommerce Websites Traffic
    ECommerce Websites Traffic

    All eCommerce stores rely significantly on online traffic because higher traffic often translates to higher sales and vice-versa. Besides the quantity, it is also the quality that matters. For example, an eCommerce store attracting 5,000 high-quality monthly visitors will be worth much more than a store that attracts 50,000 low-quality monthly visitors.

    Customer Base

    Customers are the lifeline of any business, and eCommerce stores are no different. If your eCommerce store has a dedicated and loyal customer base that makes repeat purchases, its value will always be on the higher side. Many sellers make it a point to check the statistics related to repeat purchases before making any purchase decision.

    Brand Value

    If given an option, would you buy a product from a well-known brand you trust or a new store? You’ll most probably go with the former option because you’ve imposed your trust on the brand. Other online shoppers also think along the same lines. The sales prospects of a branded eCommerce store will always be higher than that of a non-branded one. Hence, you should never ignore this factor while determining the store valuation.

    Besides these factors, you can also consider the financial history and operating costs for a more appropriate valuation.

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    Determine the True Value of an eCommerce Store for Maximum Profits

    Evaluating an eCommerce store’s worth isn’t easy and requires much of your time. But putting your efforts into it can prevent you from underselling your eCommerce store or paying more while buying one. If you want to employ the correct business valuation methods, you can stick to the above mentioned options. These methods are used by a major portion of eCommerce store buyers and sellers, so you have nothing to worry about.

    FAQs

    What are the types of e-commerce stores?

    Traditional types of eCommerce stores are:

    • B2C (Business-to-Consumer)
    • B2B (Business-to-Business)
    • C2B (Consumer-to-Business)
    • C2C (Consumer-to-Consumer)

    What are different ways to evaluate the worth of an eCommerce store?

    The Worth of an eCommerce Store can be evaluated by:

    • Seller Discretionary Earnings
    • Discounted Cash Flow Analysis
    • Precedent Sales

    What are the factors for ECommerce Valuation?

    Valuation Factors that Matter for ECommerce are:

    • Store Traffic
    • Customer Base
    • Brand Value

    What are the marketplaces for eCommerce stores sale?

    Some marketplace where ECommerce stores are listed for sales are:

    • Flippa
    • Empire Flippers
    • Motion Invest
    • MicroAcquire Marketplace
    • Investors.Club

    What is the biggest ECommerce store?

    Amazon is the biggest ECommerce store.