Implementing a multichannel sales channel strategy has become a requirement for every business. The strongest brands are the ones that meet customers where they already spend their time.
These businesses offer exceptional commerce experiences and establish strong brand identities. They create resiliency by fully owning their customers and the customer experience, selling to them through an online store that they control.
Getting these elements right first will help you reach previously hard-to-access customers through different sales channels, but with the capability to maintain a strong relationship with them.
We’ll take a deep look into the different types of sales channels and how you can set your business up to be more resilient in the long term.
What is a sales channel?
A sales channel is the route that a business takes to reach its end customers, either directly or indirectly. Sales channels include traditional marketplaces, ecommerce, wholesale, mobile apps, and more.
The most important sales channels
The different sales channels include traditional and modern marketplaces, retail and wholesale, and your own online store. All of these channels have their own pros and cons to take into account when choosing the right channels for your business.
Ecommerce is any transaction that is completed online. For example, when you buy clothes from your favorite online store, that is ecommerce. Every time you order food from a delivery app like Doordash or Postmates, that is also ecommerce. Ecommerce is a huge market, worth over $5 trillion, and it’s expected to make up 24.5% of global sales by 2025.
- Lower startup costs, since you won’t have to pay for a physical storefront.
- Can sell internationally and 24/7, as long as your website is active.
- You can collect customer data to help you figure out what your target market wants.
- Problems in your distribution channel may cause the end of customer relationships.
- Might have higher return rates because customers can’t try before buying products.
- Direct sales in brick-and-mortar stores is still more popular despite ecommerce’s rising popularity.
Amazon, Etsy, eBay, Walmart Marketplace, and Google Shopping are examples of traditional marketplaces. These channels feature a wide range of product offerings and, for the most part, customers search by the product they’d like to buy rather than the brand they’d like to purchase it from.
While traditional marketplaces come with a preexisting customer base, these platforms require you to give up control of customer service and fulfillment speeds, and to compete on margins.
- You get your products in front of the existing customer base of those marketplaces.
- You can use their distributors and marketing channels already in place.
- Being part of a traditional marketplace can give you legitimacy in the eyes of your target market.
- Indirect sales mean you have to pay a commission for every sale made using a traditional marketplace, and those commissions can change.
- Marketplaces can have really strict terms and conditions for how you communicate and represent yourself in their stores.
- There might be a lot of different brands selling similar products in these stores, so it may be hard to find a way to stand out.
Modern marketplaces are content-driven platforms that enable commerce. This includes social media channels like Instagram, TikTok, Facebook, and Pinterest. It also includes places like Spotify. One of the reasons these modern marketplaces are so successful as sales channels is because buyers are already there. Adding a Buy button allows you to meet buyers where they are.
- There are apps that can help you track various metrics on your social media platforms to help you optimize your posts and reach.
- You can collaborate with other brands and influencers to cross-sell and cross promote.
- Most social media platforms have useful templates you can use for your ads and store.
- Customer support can be instantaneous on social media.
- You constantly need to create content to stay visible.
- You need to be vigilant against any negative feedback or trolls.
- If a social media site goes down or your account is hacked that could really affect your business.
The retail channel includes both permanent and pop-up shops, like a short-term rental in a mall, a booth at a craft fair, or a stall at a local farmers market. Retail channels provide the opportunity for you to build relationships with your customers in person and get real-time feedback. Retail is a powerful piece of the modern commerce playbook.
- You get face-to-face contact with your customers
- Cut out the middlemen and get products straight into the hands of your customers.
- The sales process is direct and ends with you having payment in hand at the end of the sale.
- May have added cost of hiring sales team (sales reps, sales manager, customer support team).
- Can be expensive paying for overhead on brick-and-mortar shop.
- Dealing with interpersonal issues with staff and customers.
Wholesale involves selling your products to other businesses who then retail them. Some businesses choose to make wholesale their only sales channel; others use wholesaling as one leg of an omnichannel sales strategy. Wholesale is a great way to move a lot of inventory at once.
- You can move a lot of inventory all at once.
- Retailers will act as intermediaries for you and you can use their marketing and sales teams to sell your products.
- You can set minimum order amounts for your product, which gives you a better idea of what your sales forecasts will be.
- You’ll need a lot of capital to create a lot of inventory.
- If your inventory doesn’t sell, it can be expensive to store all your inventory.
- You don’t get direct interactions with your customers.
A reseller is anyone who increases the value of a product and sells it for a higher price. Adding value to a product can mean: affiliation with an established retailer, repackaging it, or even improving the product itself.
- Low overhead cost.
- If you add value to an existing product, you can upsell it and increase your margins significantly.
- It’s simple, anyone can do it.
- Price and availability can fluctuate depending on the items you’re reselling.
- Your margins won’t be constant.
- You’ll have to comply with the original manufacturer’s terms about reselling.
White label products are generic products that are then customized with a brand’s logo or name. A good example of this would be the branded reusable grocery bags and totes that every grocery store sells at their checkout counters. Trader Joe’s doesn’t manufacture its bags themselves, they simply buy generic ones and has its name printed on them.
- Reduced cost of production.
- Can take advantage of recent trends (think of the stainless steel water bottle trend).
- Products are market tested—in other words, you already know people want this product because it’s become so popular that generic versions of it have popped up.
- Competition is very high.
- Anyone can take your idea and use similar designs and place them on inferior products, giving you a bad name.
- Your prices will be dependent on the suppliers’ prices for those generic items.
Consumers are turning to apps to do their shopping, and businesses prefer it that way. That’s why brands like Sephora offer great coupons and special deals to people who download and shop through their app.
- You stand out from your competition.
- Users tend to spend longer on apps than on websites.
- You can leverage sales by using your app to deliver special offers, deals, or coupons to anyone who downloads it.
- The expense of building an app can be high, especially when trying to make your app compatible across all platforms.
- Apps require constant updating as technology advances.
- It’s not as simple to make changes to an app if you decide to add or delete products or make any sort of design changes as it would be on a website or social media store.
Direct to consumer
When you go to the Gymshark website and buy a pair of shorts or a sports bra, that is a direct-to-consumer sales transaction. You are buying Gymshark’s products directly from Gymshark. And according to the Drum, research shows that 55% of consumers prefer to buy from brands directly rather than from multi-brand retailers.
- You get better customer data through the traffic on your website, which helps improve your sales lead generation and future marketing campaigns.
- There are no restrictions to how you present yourself or describe your products.
- You get all the profits of your sales.
- You must saddle all the marketing and logistical costs in your sales channel management.
- Could be difficult to get your brand or name out to your target market.
- Higher startup costs than if you wholesale or white label.
Business-to-business sales are when one business sells products or services to another. A good example of this is Salesforce’s customer relationship management software (CRM) that’s used by a lot of major companies like Macy’s, Spotify, and Toyota. To illustrate how big the B2B sales industry is, online B2B sales are projected to reach $1.8 trillion by 2023.
- Companies usually have more spending power.
- If you’re able to land a big company as a client, that will lend your product visibility and legitimacy, leading to even more sales.
- Once you develop a good relationship with a company or business, you’ll have a repeat customer.
- Limited market, especially if you have a very specific product that is only used in a few industries.
- Companies usually take a longer time to make a purchase (especially if they have a big board or hierarchy).
- Usually higher cost to create product/service, as well as higher cost in selling it to companies.
A sales channel partnership is when you employ a company or individual to act as an extension of your sales team. For example, when a company uses social media influencers to promote their products, that is a sales channel partnership. The social media influencer gets a discount on those products or a commission of all the sales their posts generate, and the company gets the benefit of the influencer’s reach and the trust of their audience.
- Built-in consumer trust.
- Expand the reach of your brand/company quickly to reach new customers.
- Save on costs of marketing campaigns.
- Your partners can misrepresent you.
- You won’t get as much customer data as direct sales.
- You have to make the relationship profitable for your partners as well, so may have to sacrifice a portion of your profits.
Examples of using multiple sales channels
A single sales channel limits your ability to engage with your customers on different mediums—and assumes they don’t like shopping anywhere else.
Adam, owner and founder of The Poster List, a poster, t-shirt, and sticker shop based in Long Beach, California, uses wholesale, in-person shows, and internet sales as the main three channels for his business.
Since starting the business in 2006, Adam found that some channels boom while others dip, an unpredictable ebb and flow influenced by outside factors like the COVID-19 pandemic.
“Starting out, shows were definitely the majority of where the money was coming from, and then, 2010 through 2015, it flipped and it became more wholesale,” says Adam. “In 2016, 2017, the apparel space got soft at retail, and so we started doing shows again.” By building out multiple sales channels, The Poster List was able to adapt quickly to the changes happening in the larger market. Meeting your customers at the channels relevant to your brand helps you build a more resilient business.
“It’s good to have a couple of venues for selling,” she says. “Sometimes I feel like one is pulling me, like Etsy is pulling me away from Shopify, or if I’m working on updating Shopify, I’m not paying attention to Etsy. And I think that’s OK. You can cycle it. But try a couple of channels to see what works. You can’t have all of your eggs in one basket, that’s for sure.”
Overall, all of your sales channels should work together, and inform and support each other. For example, you might do the bulk of your business on your ecommerce website, but run flash sales to get rid of excess inventory on Instagram Stories. Or, you might make a lot of sales on a traditional marketplace but plug it into your online store to track and fulfill orders. That’s why it’s essential to set up an ecommerce site as the “mission control” of your business.
Using your ecommerce site as mission control
You can think of each sales channel as a bolt with a different type of head. As you build your business, you might be tempted to craft one type of screwdriver to unlock one specific sales channel. But that’s only going to get you so far.
Do you want to build a screwdriver or do you want to build a universal screwdriver? An ecommerce site like Shopify is the universal option, where you can remove and put in whatever kind of bit you need to unlock each channel individually.
Starting out with an ecommerce site first allows you to establish your brand, find footing as you develop your products, and set up a mission control center before you accelerate your success through other third-party sales channels.
If you’re already using another type of sales channel to sell, like a traditional marketplace or social media, here’s why it might benefit you to set up an online store as well.
1. Ease of use
Setting up and managing your online store on Shopify is less complex than using any one sales channel exclusively. Shopify lets you get up and running quickly, create and customize your site without any coding skills, and integrate with many different sales channels. It’s also a great way to manage your orders and data in one central place, which will keep you organized.
With Shopify, setting up pathways to additional sales channels is quick and easy—just navigate to the dashboard for your store and hit the plus sign next to Sales Channels. Then, select the sales channel you’d like to add. Don’t see it on the list? Visit our app store for more options.
Once you hit the plus button, you’ll see this screen, where you can confirm adding the channel. And then you’re off to the races.
Tip: Shopify supports traditional marketplaces like Walmart Marketplace, eBay, and Google. That integration can help you do things like sync your products, inventory, and orders, or find new customers.
As you get started, especially if you’re still developing your product, it can be easier to build your business on an ecommerce site first and plug into different sales channels once you’re ready to grow your business.
The biggest barrier to entry for traditional marketplaces in particular is that they require high-quality and accurate product information upfront, even if you’re still developing and iterating on your product. For example, to even be approved to sell on a marketplace, you need to provide detailed information about your products. This includes unique product identifiers like SKU or ISBN numbers.
2. Building within a siloed ecosystem
Customers follow trends, both in regards to what products they buy and which platforms they purchase from. Third-party platforms are susceptible to these shifts: policies change, algorithms shift, and users move on. Because you can’t control these changes, it’s best not to over-rely on one platform to make sales.
Say you’ve created a business selling solely via Instagram Stories. If user sentiment changes and your customers move over to TikTok, you’re faced with a fundamental business risk in which you’ve built your business within a siloed ecosystem.
That’s just one example—customer behavior can shift gradually, flow back and forth seasonally, or switch overnight. Events can influence it as well.
The Poster List team experienced this type of shift during and after they hosted a booth at an in-person show in San Jose.
“The orders that we got Friday and through the weekend and Monday were insane, and we did zero advertising for it,” says Adam, the shop’s owner. “And a lot of those orders were people within the general vicinity of San Jose.”
These customers may not have been ready to purchase while they were at the event, wanted to browse inventory more online, or needed a size or color that was out of stock. The Poster List’s online store allowed the business to make sales once its customers were ready to make a purchase. If The Poster List didn’t have an online headquarters, it would have missed out on all of those sales.
Shopify lets you set up different entry points to your business via sales channels, but all roads lead home to your Shopify headquarters. You maintain reach and ownership, which means you can sell to your target audience on whatever platform, channel, or marketplace they’re on.
3. Seller restrictions
When you sell through traditional marketplaces, those channels control branding and how you upload products, and they own the customer and your interactions with them. Customers will associate more with the product and the marketplace rather than with your brand, so it can be difficult to differentiate yourself from other shops that sell similar or the same products as you.
These marketplaces are built with buyers and sellers in mind. As a seller, you get a destination that buyers naturally want to visit, but you give up ownership over a lot of decisions. A marketplace might make decisions based on their average seller, or to improve the experience for buyers (at the expense of sellers), and you’re signing up for that in exchange for access to their audience.
Different marketplaces also attract different types of buyers. Not all products are a fit for Etsy, Walmart, or Amazon, given the type of buyer these platforms have attracted over time.
Overall, your relationship with a traditional marketplace is one of tradeoffs. You might acquire a built-in customer base, but risk losing your identity as a brand if you don’t build your own online presence before diving in.
4. Building a brand story
While you can build a compelling brand on a social media platform or at a retail location, it’s not something you can do effectively on a traditional marketplace.
Mary, of Maryink’s, built a separate Shopify store in order to differentiate and establish a new brand. “I wanted to break out of Maryink and develop a new brand that’s still associated with Maryink, but that brings about the imagery of a bandana,” Mary says. “So we came up with Abracadana, because we think bandanas are magical. They’re so simple and you can do so many things with them. We broke off and started our Shopify site because you can do a lot more with the design, and that was important to us.”
Your owned website is a blank canvas to help fully realize your brand. In a marketplace, your brand has to fit within the provided requirements. You’re limited in how you can express your brand—which makes it significantly harder to leave a lasting impression.
Meeting buyers where they are with modern marketplaces
Modern marketplaces are content-driven sites with commerce functionality. These sites capture attention via content, but with Shopify you capitalize on that attention by providing a fluid commerce experience. As people discover content that features a product they like, it’s quick and easy to make the purchase within the platform, rather than having to hunt for the item or reach out to the content creator. On these channels, the place where people go for entertainment also becomes the place they make purchases.
Data from this year’s Black Friday Cyber Monday (BFCM) shows that the number of sales generated by social media integrations almost tripled in 2021 compared to 2020. The data suggests that customers prefer to make purchases within social media platforms. This could mean that the checkout experience is improving and customers are becoming more comfortable making purchases on these platforms.
On Instagram, for example, you can make posts and Stories shoppable. If a customer sees an item they like, all they have to do is tap the shopping bag symbol next to it. They’ll be directed to another page where they can see other images of the item and its price, and can tap a link to view it on your Shopify store and check out. That means an “Outfit of the Day” post on Instagram becomes instantly shoppable, or a vase used in a living room redesign is easy to add to your cart.
Customers experience products differently when they discover them on these marketplaces. They see them in context, rather than against a plain white background while scrolling through an online store. These are rich shopping experiences where both you and your customers benefit if they don’t have to come back later and remember a URL to get the item they want.
Spotify, the music streaming service, is another modern marketplace that’s transforming into an ecommerce platform. Now, listeners can scroll down to the bottom of a band’s profile to see offers and preorder albums or purchase vinyl records and merch.
For example, you can check out Jamestown Revival’s tour schedule and pre-order their newest album to get ready for an upcoming show.
Overall, setting up your business headquarters on Shopify will allow you to link your shop easily with all of these platforms, creating a better purchase experience for both you and your customers.
Which sales channels are right for you?
Determining which sales channels are right for your business depends on quite a few factors. To get started, sit down and answer the following questions:
- What is your business model?
- What are your overall business goals?
- What kind of payment processing system do you use?
- What do your cash flow and revenue cycle look like?
- Who is your target audience and where do they like to shop?
- How are you positioning your brand and products in the market?
- What types of products do you sell?
- What’s your social media presence like? Do you have a following?
Once you pull together the answers to these questions, start testing out the different channels you think will work best for your business.
How to build a strategy across multiple sales channels
When you started your business, you likely prioritized a single sales channel—for example, your Shopify store. However, as you look to scale, implementing strategies across multiple sales channels is key for growing your business.
Moving into new sales channels may seem daunting, but with our five-step guide, you’ll easily be able to pinpoint the best channels to start with and create a strategy for success.
1. Prioritize your channels based on profitability
Multichannel selling is not a one-size-fits-all strategy, so you need to pinpoint the best channels for your specific business. To do this, you need to consider a few different factors:
- Who your target audience is and where they spend their time
- Which channels will have the lowest overhead to get started
- Where your competitors seem to be having the most success
For example, starting to sell your products on a traditional marketplace like Amazon, Etsy, or eBay might be the best next step for your ecommerce business.
Once you see profitability through one sales channel, you can then prioritize other channels accordingly, moving to each new channel as you see success on the previous channel.
2. Create a different strategy for each sales channel
Each sales channel you expand your business to will require a different strategy for success. For example, you’d take a different approach to sending customers to your online store than you would creating foot traffic in a brick-and-mortar retail shop.
Furthermore, you’ll need to tweak your product descriptions and marketing messaging on different sites. Your Shopify site might tout how quickly products ship, but Amazon shoppers are used to the speed, so you’ll need to find a different way to entice customers to make a purchase.
3. Manage inventory and fulfillment
As you expand to different sales channels, you need to have the proper processes in place for inventory management and order fulfillment. Increasing the number of ways you can make sales will—hopefully—increase your total number of sales. And you need to have the inventory to accommodate that increase.
More than that, you need to make sure you have the capacity to fulfill all of those orders. Taking advantage of Shopify fulfillment can be one way to take this step off your plate, and Amazon offers the same thing for their marketplace.
Otherwise, you may look into hiring an assistant to help with fulfilling orders to help you keep up as you expand your business to even more sales channels.
4. Ensure quality customer service across sales channels
Growing your business means you might have more customer issues to deal with, so you need to put parameters in place to keep up the quality of your customer service. Consider hiring customer service reps or checking out some of the customer service apps in the Shopify app store.
Adding live chat to your Shopify website can be a manageable way to deal with customer service questions and complaints yourself as you start to scale your business. Keep the app on your phone or open on your work computer so you can quickly respond to anything that comes in.
5. Keep an eye on your sales and analytics
Pay attention to how many sales each channel is driving. It will likely take some time to build up a new channel, but you need to keep an eye on your sales to make sure the channel eventually starts paying for itself—and then some.
If you discover a certain channel isn’t making enough sales, put together a marketing campaign aimed at that channel to help boost it. Perhaps all you need is a bit more brand awareness so your customers can discover your additional sales channels.
Building a resilient business
By creating a headquarters for your business on an online store, you set yourself up for success in a few ways. You’ll be able to develop a unique brand and maintain ownership of your customers and your data.
Your sales channels help your brand reach customers in the places where they already spend their time and attention. With Shopify, commerce on these platforms can be more seamless, which is good for your customers. Plus, they’re integrated with your online store, so you maintain access to order data, customer relationships, and your brand identity.
Customer needs, marketplaces, social media, and the greater commerce market are constantly changing. Building a centralized ecommerce shop will allow you to be a more resilient business long term.
Hero illustration by Mitch Blunt
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Sales channels FAQ
What is an example of a sales channel?
Amazon, Instagram, and an online ecommerce store are examples of sales channels. Amazon is considered a traditional marketplace, while Instagram is a modern marketplace.
What are the most common sales channels?
The most common sales channels are:
- Online store
- Traditional online marketplaces
- Social media
- Retail (both temporary and permanent)