WSW - Online Sales Channels Audio:Video Synced
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Dan DeLong: Welcome again to another workshop Wednesday brought to you by schoolbookkeeping. com where it's casual conversations for serious workflows. And we are continuing our never ending saga. It seems with that e commerce fundamentals Rachel Dolce is joining us again, as usual, we appreciate her joining us as we, as [00:01:00] she guides us through these fundamental aspects, we.
Just to recap, we had, we talked a little bit about just an overview of what is e commerce. We talked about the components of an e commerce business to be able to sell sell online. And then we talked about the oh, so interesting topic of sales tax and sales tax implications. And last week we talked about inventory, right?
So now. Okay. So we've talked about, handling those inventory situations and those types of things. Now, I want to get, take a little deeper dive into how you sell online. So there's online sales channels. So this is really the high level topic of what we're going to talk about today.
So Rachel let's set the stage. There are a variety of ways to do selling online and, we want to bucket these into two major categories. So let's talk about how do you sell all you were just talking about right before we started [00:02:00] about selling on Facebook and Instagram shops and those types of things.
This is almost like a lions and tigers and bears on my, with the choices that are available, right? Yeah.
Rachel Dauchy: First I just wanted to say you make it sound so exciting as a never ending saga, it makes people really want to listen.
Dan DeLong: This is a song that never ends.
Rachel Dauchy: It is a never ending saga.
Like I feel like sometimes when I sit down and do it, it's never ending, but yeah, so I specifically was referring to the Facebook and Instagram channels within Shopify. So when we're talking about selling online. There are different platforms that you can sell online, and Shopify is probably the biggest when it comes to selling product, and there's several out there, Square sorry, not Square [00:03:00] Squarespace, WooCommerce, Wix, BigCommerce, Magento, all kinds of ones like that, but Shopify is really the most In my opinion, the best platform to sell on if you're selling, they're really starting to get into the subscriptions and digital downloads and service based business stuff, too, that they're trying to push that.
But as far as checkout carts, it's the best in the world in my opinion.
Dan DeLong: So that's one category or one classification of online sales channel, which is a shopping cart. And this is, I guess one of the some of the main categorizations of what makes a shopping cart versus as we'll talk about a marketplace.
It is, it's more of an extension of your existing website, right? Like you're gonna have your website and [00:04:00] then there's gonna be a store or something like that on your website. Would you say that would be a yes. Good general categorization
Rachel Dauchy: about that? Yes. So this is where your business's website would be?
It would be. on one of these platforms. Shopify has a multitude of themes that they call them that you can use and then pick a theme and according to the design that you like and all of them have an amazing shopping cart ability, and a lot, most of them do or if not all, they all do as well, so that Shopify is really meant to scale, and it can handle all kinds of stuff, and it's really meant to sell across the world, it can, handle that kind of stuff, but yeah, so this is where your website would be.
And then if you want to talk about the opposite, which would be the market.
Dan DeLong: We talked a little [00:05:00] bit about a, the analogy of the difference between a marketplace and a shopping cart. So a marketplace, the biggest marketplace of them all would be Amazon, right?
Amazon is a marketplace, right? And they even say so on their advertisements, right? X amount, X percentage of things that you buy from Amazon are from small businesses, just like yourself, right? So that is a marketplace differs from a differs from a shopping cart in that it's not necessarily part of your domain, right?
And we talked to a little bit about the difference between a yard sale and a swap meet, right? The way we're. A swap meet is a marketplace where people can bring their wares to and you have that built in foot traffic of it, of people already being there looking for things to buy.
Amazon is a great place for that, right? You've got people that are already know [00:06:00] about Amazon. They already know, and if they're going to buy something, look online. I think, I think back and, of all of the things that Amazon sold for me when I would go from store to store looking for a specific thing.
And I'm like, just go and buy it online and ship it to my house. And here I am trying to support a small business and, or, a local business, keep the, keep the economy going in the local. And then here we go. Boom, can't beat convenience, right? They have cornered the market.
Rachel Dauchy: It's totally changed our culture and the way that we live. And you could even send some, buy something and send it ahead of where you're going. Like fun, going to visit family out of town, a sense, get something on Amazon and send it ahead. It's send gifts, Christmas gifts, just send them there.
It's really a total game changer, but yeah. Like you said. With where [00:07:00] your website is on your own platform, that's your domain. So if you have if for instance, if my store is 1 800 Flowers, that domain, 1 800 Flowers. com, if I've gotten it from GoDaddy or something, I can point it to Shopify, or I can get it from Shopify domain.
But that is my website. And in Amazon, Buyers are going to your URL, they're going to Amazon, and then you may have a Amazon shop within Amazon, because a lot of people do that. And then, there's all kinds of different ways that you can sell within Amazon, but like you said, it's really just the world's largest marketplace.
Dan DeLong: And then there's others that are out there, Amazon is not the only one that's out there. What are some of the other more common marketplaces? That you've that you've come across, Rachel.
Rachel Dauchy: I have clients on eBay, on Etsy, which is the the, for [00:08:00] the, I can't even think, the marketplace for makers, handmade goods.
EBay is, just people selling whatever. And then you have places like big chain stores that are now launching their own marketplace. Like Walmart, Walmart now has. They're on marketplace. So when you go to walmart. com, some of the items you are purchasing or that you see they're listed are Walmart items that are bought by Walmart buyers and then mixed in there are Stuff that people have uploaded into their own marketplace account.
So it's mixed in so when you go to walmart. com You could be buying from an independent seller. You could be buying from Walmart and There's all kinds of other retailers that are doing that as well. I think Michael has the arts and crafts store has a marketplace now, and they're all getting into that game.
Dan DeLong: Yeah. The and would he, the [00:09:00] biggest differentiator between between the marketplace and an online shopping cart is obviously control, right? As far as the cool control that you have. With regards to how you how you market, and pricing options and Yeah, basically everything that you can control, just like a yard sale, right?
You can advertise as much or as little as you want. And that sort of thing in order to ensure that you have foot traffic, you can control the pricing. But at a swap me type of thing where it's a gathering of other vendors, now you're, you've got that built in call co op, not cooperation, but competition, right?
Especially if you are selling some of the same things that other people are. And you'll see that on Amazon or all of these marketplaces where they'll have, they'll have a listing, it's the exact same listing, and then there'll be a little tiny thing that says. See from [00:10:00] other vendors or see from other suppliers.
And then you see a whole bunch of listing It's people dress better at a garage sale than at Walmart. Yeah, you don't have, you don't have people at Amazon. That's a website that's devoted to the strange.
Rachel Dauchy: I know people at walmart. com. I was just going to say that. And then I'm like, is that really like a nice website?
Maybe not.
Dan DeLong: But yes, it is good for people watching. That's for sure. By going to Walmart. But Now I lost my complete chain of thought
Rachel Dauchy: but the control
Dan DeLong: factor. Yeah, amazon has a lot of requirements and and the, when you have that little tiny link that says see from other suppliers, that's where you're actually seeing everybody who could potentially could sell that same product or maybe a different price or anything like that.
Maybe the newer used or something like that. I actually have this really interesting story about, about a [00:11:00] marketplace. I was caught in a marketplace typhoon whirlwind. I don't know. So here's a, here's the thing. So I was looking for a webcam. All right new webcam for, that was good.
And somebody recommended a certain brand. All right. So I went and I look first on Amazon, see how much this thing is. And so I'm like let's see if there's other places. And so I went to at that time it was Sears. So this is just how old this is, I went to Sears and saw listing for the exact same model.
For 30 less than I saw it on Amazon. Here we go. This is exactly what I want. So I you have to drive
Rachel Dauchy: there?
Dan DeLong: No, this was the marketplace. I'm so bad. It was just a listing. And this is before I knew, all how, people could game the system. So here we go. I order it.
I order it through this through, through this marketplace. [00:12:00] And then maybe two weeks later, I get a webcam in the, from Amazon with a gift receipt, right? And so I thought somebody had gifted me a webcam, but it's not the model that I thought I had ordered. And so at the time, you could not go in and you couldn't find out who gifted you anything, so I, I actually slowly went through the whole buying process again, through years, and what happens was, is that there was, it was a listing for the specific brand, but when you clicked on it, it took you to an eBay list and then it was not the brand. And all that person did is go and buy that brand of that they were selling.
Through Amazon as a gift, which I put up there.
Rachel Dauchy: Oh yeah. Yeah, I totally did that all the time. Yeah. [00:13:00] Sears head webskin. Yeah. They do that. They, they, that's how they fulfill their orders. Yeah.
Dan DeLong: So they went, they bought it. Yeah. We even to do that, bought it as a gift.
They bought it a gift. That's so funny. A gift a gift order, right? Yeah. Yeah. And so that, that totally got me confused. And then, so this was, yeah.
Rachel Dauchy: So dating and then box it. Yeah. They just sent it straight to
Dan DeLong: you. Yeah. It was one marketplace leading to another marketplace that led to another marketplace in order for.
Me to get what I wanted, which I never, which is not what I wanted because I wanted a specific brand. And that's why I brought it up to Sears. I'm like, Hey, this listing. And then the reality is not, it says it's a Logitech webcam on the listing, but then what I actually get is some, generic brand that I could have bought for less than what they charged me, because that's how they made their markup is they.
They just submitted the order through Amazon for the no name brand of [00:14:00] webcam that I ultimately got, which I could have done myself.
Rachel Dauchy: That's how a lot of people do things like we, when I know my Shopify store is under a different name, but when it was the other name, we if we ran out of stuff, we had to get it on Amazon because, we weren't buying in large quantities and we would have to do that every once in a while.
But. I don't do that now, but yeah, I'm guessing a lot of people do that.
Dan DeLong: Yeah, this is a good question that's on Facebook, this is what, is this is what they call drop shippers when they never actually have inventory. And we'll talk about this is actually next week's when we talk about fulfillment and shipping and those types of things.
We'll put a pin in this particular. A question, but you want to speak to what a drop shipper is just so that
Rachel Dauchy: yeah. So set the stage. Yeah. And yeah, I'm happy to talk about that next week, but yeah, essentially drop shipping is you are selling items that you don't physically have.
So somebody is buying them from your site. And then you're sourcing them from [00:15:00] somewhere else and sending them directly to the buyer. The opposite would be is if you are holding the inventory and then you pack it up and you ship it. And then, there's financial differences between the two, but we can get into that next week.
Dan DeLong: Yeah we'll dive and unpack that next week about fulfillment when we talk about shipping and fulfillment next week. So online, online platforms, right? The shopping cart experience versus the marketplace experience. You, and you've talked, talked to the gold standard for you is Shopify because it does have that ecosystem that's built in, built into that you start with a Shopify plan and then you can add on and add on plugin.
That's what I found very similar to WooCommerce as well is that it had its core functionality, but then if you needed additional things on top of that, you end up having all these add ons and plugins that ends up being a [00:16:00] little bit of a monstrosity, I guess it's this is the challenge, like, how do you heard those cats when, when it could potentially be, I want to do this with my online store or my online shopping cart.
How do I, how do you get involved in the selection process of the apps or the add ons or is that more of a they added it on they get to deal with it as far as the clients.
Rachel Dauchy: It's for my clients, it's pretty much they do their own app because I'm not really involved in their store design and their store setup, but because I have my own Shopify store and I have gotten involved with that with them before.
It's just not the norm. I usually don't put that into my scope, but yes, there's an app for everything. Every single thing in the world. So there's even an app to have somebody create an app, an online app on your phone, you, so an app for now, anyway, it's there's nothing that you can't have an app for, if you can imagine it, [00:17:00] there's an app for it.
So the Shopify app store is very cool. So yeah, it can be very overwhelming, but I, usually I have people ask me do you know if there's an app for blah, blah, blah, and I'll, recommend design facing the customer facing stuff that they're needing an app for certain design. Not so much.
I don't really know, but the different sales channels and stuff within Shopify and all that's definitely my strong point. But another reason why Shopify is excellent is because it's you can sell through the Facebook. And Instagram channels that are built within Shopify.
Now you can sell on Facebook without Shopify and you can sell on Instagram without Shopify. And you can sell on Tik TOK and Pinterest without Shopify. But if you're on Shopify, in addition to your URL store, you can sell through those channels and they come through your Shopify reporting. [00:18:00] So you're selling on those places and then it comes into Shopify like it's a regular sale.
Those are apps, but they're sales channel apps, so there's an inventory apps. There's all kinds of different apps that you can use. So yes, it can get really overwhelming, but that's, you, we could have a whole other discussion on
Dan DeLong: it. Now, what would you consider Facebook, Instagram, TikTok, Chop, since we talked about, online.
Sales channel and then the marketplace, what, where would where would Facebook and those fall in your estimation of defining an online sales channel versus or a shopping cart versus a marketplace. To make it even, to make it even more confusing, Facebook has a place to sell things called
Rachel Dauchy: Marketplace.
Yeah. And that's not selling on Facebook. That's just accessing the Facebook Marketplace. But yeah, so when you're on when you're [00:19:00] on a Marketplace, you're really just dealing with that Marketplace and its rules and regulations. Walmart, you have to deal with their rules and regulations and so on and so forth.
So when you're Dealing with your Shopify store there's just a lot of more flexibility. Oh yes, I would like to push my items to the Facebook store. I, yes, I would like to push my items to this Instagram store. And that way, when I make Instagram and Facebook posts, I can then link my store to it and then they can buy on their phone.
So there's all it's mainly for creativity for people that really want. To sell on a lot of those different channels when you're dealing with a marketplace, and I have people that sell on both, they're on Amazon and on Shopify, and then they can do various channels through that, but There's just more available for you to do within the Shopify world, whereas in, if you're on [00:20:00] Amazon, you're just going to do it the way that they do it.
And you might get into this next, but for me, the single most important difference between the two is the cut that they take. I don't know if you... Exactly, you stole my thunder. Yeah, sorry.
Dan DeLong: So that's the biggest thing. With a, with an online shopping cart, right? You have control.
You have the responsibility as well as driving the traffic. Whereas Amazon or the marketplaces are going to have that built in foot traffic and brand recognition as far as where I'm going to buy stuff. But then we, the flip side of that is the fees, right? Whereas, whereas you could have a Frankenstein monster of apps on your.
On your online shopping card, but you're going to have a [00:21:00] Frankenstein monster of bees when it comes to a marketplace, because because why? Let's tee it up for you there, Rach.
Rachel Dauchy: If you're going to be listing your items on Amazon, then you're going to pay to do it. I, like you said earlier, everybody buys from Amazon, even when you don't want to, even when, I'd rather buy from a local seller, but just because of convenience and The way that our culture has changed, we now, we shop around and then ultimately end up buying it on Amazon out of convenience, sometimes not even just for the price, but for that delivery time.
You're going to pay dearly to sell your things on Amazon. You're going to pay listing fees, advertising fees. All kinds of stuff, transaction fees fulfillment fees, there's all kinds of different things. So that could eat up to 50% of your profit. When you're selling on your own platform, your own store, even, on Shopify, when you're selling into the different channels, selling.[00:22:00]
On Google selling on Facebook, Instagram, you're going to keep predominantly most of that money, less transaction fee. Transaction fees are really what you're going to spend. But, and sometimes you're dinged twice on that with transaction fees, when you see them come into QuickBooks, you'll usually see a transaction fee twice, but your marketing, which.
In Amazon, you just pay them to do it. And you say, you know what? I wanna be listed in the, when somebody searches, let's say somebody's searching cat socks and you wanna pay and you, if you're selling cat socks, you're socks with cat prints on 'em. Not like actual socks that go on cats, but, yeah. So Yvette, if you want your camp socks, a Meel Moccasin, yeah. To come up first. The very first listing that people see if they're searching cat socks, then you're going to pay dearly for that. That's going to come out of your Amazon [00:23:00] payout, but that's incredibly convenient. And if that's part of your model, that's what are you, that's your budget for marketing and advertising.
Then that's fine. When you're on Shopify, the main place that you're going to have to be advertising that is search engines, Google and Bing and all those things. So it's, where are you going to advertise? This place or that place? Not advertising isn't an option, unless you're George Clooney and you have a tequila line and everybody knows what it is or something like that.
Or you
Dan DeLong: have 50 million followers and all you have to do is just hold it up on your Instagram and voila, there's my built
Rachel Dauchy: in marketing. Exactly. And, but that's what that whole world of creative marketing, you pay 1 million for Kim Kardashian to show it for 30 seconds and then people see it. Again, that's.
Instagram marketing. So there's all kinds of different ways to do it, but [00:24:00] it's really just a matter. It's not one you don't have to market. It's well, where are the places that you're marketing here or there?
Dan DeLong: And then and then another big thing I know with Amazon, maybe you can fill us in on the other marketplaces is they they hold your funds.
For two 14 days, right? But they do this thing called a settlement report, which then is, here's your, here's the proceeds during this two, two week period, and here's all the fees that are coming out and some are so convoluted that you can't even, you need a decoder ring to try to figure out what this fee is actually for there's this And within that two weeks there, Lord knows there's returns, and as again, Amazon has cornered the market on convenience, so they make it really easy for people to return things. But that, that ultimately comes back to the supplier when it comes to the month, following the money. And [00:25:00] did they actually return the thing?
Did it get put back into stock? And that's when they pull the funds back and they have to reverse their referral fees. It's just very complicated. I guess it's the easiest way to describe it. Like it's like a Facebook relationship status. It's complicated. Yeah.
Rachel Dauchy: It is, but if you're using a, connector for your bookkeeping and accounting, that when the payout does come, it'll break that things down, those things down into your books and, they, yes they have a suspense account and they'll hold things past your end of balance and then you got to keep that on your balance sheet and yeah, it can get complicated.
FARE does that too. FARE is a wholesale market. And they also don't pay out for quite some time. I think they hold it for 90 days or something like that. And now I know why. Because I buy from FARE, but they give me 60 day terms. That's [00:26:00] why the sellers don't get their money for a really long time.
But yeah, so you have to account for that. So doing that's bookkeeping for that is adds another of layer of complexity. If you're dealing with fair sellers or Amazon sellers or any other platform, marketplace that's holding their money. And I think it's also if you're starting out on Amazon.
You're not an established business they immediately don't pay you out. They'll hold the majority of the money until you've established yourself as a reputable seller. Prepare
Dan DeLong: for that . What with other marketplaces, do they have that same lag time with as far as the settlement or is it does it vary?
What about like Etsy or Walmart? Do they have the same. Length of time to for, from the time of sale to the time you received your funds.
Rachel Dauchy: I, Etsy has a setting that you can say pay out sooner or [00:27:00] later. I feel like it does. I might be imagining that. But other than that, I think the paths are standard, like two to three days.
I think Walmart is the same, unless I'm wrong. Shopify, again, two to three days. All that's your standard payout. Same as the payment processors, usually, anywhere from one to three days. Shopify payments is usually one to two days or something like that. So it's, but also Shopify will hold.
So Shopify payments will hold. The more established seller you are, the less likely you are to have your payouts withheld.
Dan DeLong: One other thing that I saw that was unique is revolving around Etsy, the marketplace, where because they are, focused on creators, it's the one off Tumblr or t shirt or needlepoint, things that are customized.
The listings are not [00:28:00] for a product that, you have 10, 15 in stock, right? So they charge on a per item listing fee. Yeah. And so just to list something is a fee to list and then when you sell that one and you want to replenish the same thing, then there's another. Yeah. Just to list
Rachel Dauchy: Again and again, there's a fee on top of little fees like that in Etsy.
And. Yeah, so that's called made to order. As opposed to made to stock, it's made to order. Yeah, they're not holding any kind of inventory. I have a few different Etsy sellers that they do. And, yeah it's pretty ridiculous what Etsy does. They take so many fees. Man, like if you can get that process know when to buy and when to surge and when to this and when to that, there's just some sellers that are they're so good.
And that's the thing, but that's all about online selling is if you can get that magic mitt of [00:29:00] knowing where to advertise and whom, then you can. You can make a lot of money and you can do it really well. I'm just not an expert on that. I have my own store, but I mainly have it just for, testing and understanding how everything works from soup to nuts.
But it's a real functioning store, but that's that whole realm of, and I do have clients that are big sellers and they, gosh, they know how to do it, but it's magic. I wish I knew how. Yeah.
Dan DeLong: Yeah. They won't let you know what the magic potion is if they do yeah, so that, that kind of gives us a real high level, fundamental picture of, selling things online and the two major categories, there are a variety of ways within each one.
And other multiple players in that space, but you have essentially an online shopping cart and a marketplace as your choice. And then of course you could do a combination [00:30:00] of the two and in multiples so you could end up with a. Sears, Walmart, Marketplace eBay. Yeah, I
Rachel Dauchy: do have one client that's on 10 different marketplaces, and a lot of the things are made to order too, but he's on a lot.
And the one other thing I was going to say that I think is probably the most important thing in all. And. From a bookkeeper or accountant's perspective, I usually say bookkeeping and accounting because I, I do both. We're inputting the data, but then, we're manipulating it in all kinds of different ways.
Very complex accounting. But you have to, If you start to do this kind of bookkeeping and accounting, you will have clients ask you, should I sell on Amazon? For you to be a trusted advisor and partner to them, it's better if you know the fundamentals of [00:31:00] all of these things, like what we're discussing.
You don't, I'm not an expert in Google marketing. I really don't even know anything about it. But, I... I know, a few different things and I know, enough to understand the language. And if you have clients that are asking you how hard is it from your perspective as far as integration and bringing all the sales in from all the different platforms?
And, of course I can speak to them on that and I can let them know what the pricing is going to be and with different payment processors and, they'll ask can I use Square on, for here and for here? So there's an endless amount of things that you can specialize in and understand and know what syncs with this and what works with that.
And that is just technical aspect of it. If you can bring your knowledge up and, about really fundamentally, how does Amazon work and how does Etsy [00:32:00] work, then you can have those conversations with your clients and you can say if they've got a very simple setup where they're maybe managing their inventory in QuickBooks and then they're in Shopify and Then they say, I'm thinking about going to Amazon and then, you have the information, you know what you need to do, and you can have that conversation with them and so it's, that's wildly important.
I've never had a client that has said to me No, I'm not going to discuss any of those things with you. Usually they come to me and they'll ask what do you think about work? What do you know about the fees for X, Y, and Z? So it's really helpful to know the nuts and bolts of all of this stuff.
It really is.
Dan DeLong: Appreciate you joining us again Rachel, for your For your wisdom and and guidance as we navigate this never ending story of e commerce fundamentals so hopefully everybody found some nuggets [00:33:00] of information as we as we unpacked, packed unpacked
selling things online as far as the methods to be able to do that. And hopefully you can join us next week where we talk about shipping and fulfillment. This is going to be another juicy topic to to, to bite, sink our teeth into. So everybody have a great week and we'll see you next time on the workshop.
