9 Mistakes Retailers Make When Adding Sales Channels

Many retailers decide to add another sales channel or two once it’s clear that they can effectively sell a product or service on their existing platform. The trouble is, the business strategies that were effective for a single channel don’t always apply to multichannel selling. 

How can you make sure you’re using the right systems and strategies in your multichannel business to ensure it’s set up for success? We put together a list of the top mistakes retailers make when leveraging multiple channels, straight from the experts.

Manually entering data

Tip-type, tip-type. Is that how you pictured your life running a successful business? It might seem that adding another sales channel can double (or triple) your data busywork, but it doesn’t have to be that way. Say it with me now: automate, automate, automate! By using automation tools that integrate with your core ecommerce tech, you won’t have to do any manual work to keep your business information accurate.

“Absolutely automate everything,” says Webgility CEO Parag Mamnani. “Margins in omnichannel and retail are razor thin, so your competitive advantage is your speed. Without automating your processes and systems, it’s incredibly hard to build a successful and profitable business. You have to find every ounce of optimization and automation you can in your customer base.”

Plus, manual data entry opens the door for human error. “If any human has to retype information, you’re gonna have a problem,” says Denise Brooks, founder of Alexis Information Systems. “Think of the simplest data entry error,” she continues. “There’s a town here in Arkansas called Bella Vista. John Doe could type Bella Vista, Jane Doe could type Bella-Vista, another could type BellaVista. None of those entries would be considered the same. With automation, you avoid those common issues.”

Keeping your apps separate

In the same vein as automation is integration. Your apps and software should talk to one another—syncing the same information so you don’t run the risk of losing important data. This includes key features of your tech stack like your marketplace, online store, accounting solution, sales tax program, inventory management system, and shipping solution.

One example of the benefit of connecting your apps? If you update a product listing on one platform, it should automatically update the listing on another platform. This saves you valuable time and keeps the customer experience the same across channels.

QuickBooks Point of Sale expert Peter Eastvold noticed in the early days of his operation that he was missing leads from prospective clients because his systems weren’t connected. “If you don’t have a system that combines your data in one location, then you drop the ball without even knowing it,” he says.

Not tracking where your customers are coming from

When you add sales channels to your business, it’s important to keep track of which ones are performing best, and what is driving your customers to visit them. Find your most successful conversion paths so that you can meet your customers where they are and better suit their needs.

“Identifying where your customers come from prior to making a purchase on one of your channels is crucial,” says Sean Buckley, retail partnerships lead at Shopify. “You want to identify the conversion paths that produce the most valuable customers and focus on the profitable paths to increase the quality of your customer base.”

Once you understand where your customers are coming from, then you can look at the results and find patterns. “You might say, okay, well the pathway that starts with Facebook is generating a lot of sales on my ecommerce checkout,” explains Buckley. “Then you want to see what types of customers are following those pathways so you can get an understanding of who your customer base is. After doing that, you can start to see who those customers are that are following your most valuable path.”

Having a siloed customer experience on each channels

With a multichannel commerce strategy, customers have different experiences depending on which channel they’re using. For example, Sean Buckley explains, “You might have an ecommerce store and a physical store, or you might list on places like eBay or Amazon. But those channels aren’t necessarily connected. They’re not talking to one another—they’re not sharing data and insights on the pre-purchase journey, at the point of purchase, and post-purchase.”

When selling on multiple channels, consider how you can move closer to an omnichannel commerce strategy. Omnichannel commerce is a multichannel sales approach that provides a seamless customer experience across each channel, regardless of whether the customer is in-store or online.

Anati Zubia, VP of marketing at Webgility, gives this example of an effective omnichannel experience: “A physical store’s sales associate uses a mobile device to assist an in-store customer by checking inventory on an item that isn’t available in the physical store, instead placing an online order to have the product delivered to the customer’s home.” See the benefit to the customer experience?

Not scaling your tech stack with your business

If you still have a hodge-podge of apps and software that might not scale as your business grows, now might be a good time to reassess your tech stack. Apps that are not serving your business may be costing you time, money, and data security.

One weakness to look for? Free or “freemium” apps. Choosing a free app may have made sense when your business was just starting out. But when the apps are designed to serve a single purpose, you may soon find yourself accumulating more than you—or your operational backend—can handle. You likely could find one paid app that does everything your free apps do, and more.

Denise Brooks suggests that multichannel businesses choose one premium app to anchor their business around. “Businesses patchwork too much together instead of upgrading to one better app that can do everything,” she says. “The anchor app you choose will be your main tool, and it should sync with everything else you need.”

Overstocking your inventory

So you’ve added a new channel, and you’re optimistically expecting many more sales. It’s understandable that you want to avoid running out of stock and missing a sale, but be careful before buying too much inventory.

According to Hilary Halstead Scott, president of jewelry wholesaler and distributor Halstead Bead, overstocking is the number one mistake retailers and brands make when managing their inventory. “It really requires discipline from your purchasing department to make sure they’re trying to match stock levels to demand as closely as possible without carrying too much excess,” she advises.

The problem with overstock, Scott says, is that “it not only drains your cash flow, but can also cause problems if you carry a type of product that may go out of fashion, spoil, or somehow degrade over time. You end up writing off inventory later in order to capture a sale now. You really have to watch those balance points, make sure you’re not kicking the can down the road and causing problems later, and look at your profitability over longer-term periods instead of just the current quarter.”

Leaving shipping & fulfillment as an afterthought

Food for thought: Shipping cost and time is one of the top reasons customers abandon their online shopping carts. Although you may be tempted to focus your energies on marketing your new sales channel or redesigning your online store, don’t forget about your shipping and fulfillment operations. Make a plan for how your fulfillment strategy can keep up with your growing business.

One way to prioritize shipping is to make sure the customer has the same shipping experience across your channels. “You want to make sure that in your omnichannel solution, purchasing from Facebook [for example,] has the same shipping times and fulfillment experience as purchasing directly from your online website,” says Sean Buckley. “Integrating your fulfillment to your inventory and order management allows for a customer experience that is consistent across all of your sales channels.”

Another way to improve your shipping strategy is to partner with a fulfillment company. Jake Rheude from Red Stag Fulfillment explains, “When you have partners, not simply impersonal vendors, then everything along your supply chain and all the way down to your end customer will move more smoothly because your partners will work with you and for you to create the best buying experience imaginable.”

Poor communication across your team

As you focus on your company’s “hard” skills—leveraging technology, systems, and processes—don’t forget about the “soft” skills too. Communication is one of the most important facets of a growing business: because things move quickly, you have to ensure everyone is on the same page.

“As you expand channels, your team is only going to grow,” says Parag Mamnani. “Whatever tool or system you find, make sure you create a strong communication strategy with your team. This will ensure you always know where the customer order is, and whether you’re missing your shipping and cut-off dates.” Making errors on orders because your team wasn’t in sync is always something to avoid, but especially as your business grows.

A good communication strategy also means that managers should involve relevant workers in decision making. In her experience, Denise Brooks says, “Unfortunately, big decisions are not made by the people who use the technology. Whenever I have to deploy a point of sale system or online store, I have to understand what the finance department needs, what the warehouse workers need. I interview the future users, which often span the whole company.”

Not knowing your business analytics

The more channels you add to your business, the more complex your numbers. Mamnani explains, “You’re having to track inventory, customer orders, and your supply chain from multiple channels. That means you can often run into collisions or data loss. Plus, you may be looking at aggregate data as opposed to channel-specific data. When you drill down into your numbers at the channel level, that’s when you’ll know how your business is truly performing.”

It’s not unusual for business owners to run into trouble seeing how their business is doing financially. For example, Alec Avedissian, cofounder of Rareform, says that despite his company’s ascent, he admits he didn’t know what the company’s sales were on any given day. “At the end of every month,” Avedissian says, “we would do a one-time journal entry with all the sales and the processing fees, so we didn’t really know on a day-to-day basis where our sales were.” He had to switch between Excel, QuickBooks, and other apps just to align all of his figures.

This process is simply not sustainable for a growing business. Multichannel sellers should prioritize finding reports, apps, or systems that deliver easy-to-understand insights that show exactly how their business is faring.

By guest contributor Leah Allen-Manning