Free shipping is every online shopper’s dream. It dominates consumers’ decision making when it comes to whether or not to place an order. Shopify found that 75% of shoppers care about free shipping, even more than fast shipping (60%) and flexible shipping (53%).

As eCommerce becomes the norm, customers have high expectations regarding their online experience. Free or low-cost shipping is one of the main reasons why customers prefer shopping online. Knowing this, it’s no surprise free shipping can skyrocket your eCommerce conversion rate.

But for eCommerce retailers, it can be a financial nightmare if done incorrectly. Offering free shipping isn’t as easy as clicking a button in the back end of your eCommerce website. It requires careful consideration.

Create an affordable free shipping model and you may find your dispatch times are slow — much slower than customers expect. On the flipside, if you offer free shipping at faster speeds without optimizing for distance, it can get expensive and even break into your bottom line.

Simply put, a free shipping option can seriously harm your profit margins and business growth without a strategic plan. If you don’t build the cost of free shipping into your store margins, you run the risk of your eCommerce store operating at a financial loss.

So, how can you offer free shipping while protecting your margins?

In this article, I’ll walk you through various strategies you can use to make sure free shipping doesn’t kill your profits.

Why you should offer free shipping

If you haven’t been scared off by the risk free shipping can pose to your profit margins, then you’re ready to hear why you need to offer it.

Free shipping is guaranteed to improve your conversion rate. While there isn’t a single hard figure for how much it will, there are plenty of case studies out there sharing free shipping success stories. Retailers all around the world constantly report how free shipping has amplified their eCommerce conversion rates.

Along with this, it also helps online stores recover abandoned shopping carts and could boost your average order value.

Outside of the financial benefits, free shipping can also give you a competitive advantage within your product niche by making your product seem more desirable. This is especially true for retailers selling goods through marketplaces such as Amazon or Walmart.

Remember that psychology is also at play here. Psychological pricing strategies can carefully and subtly influence the way consumers react to product costs.

When it comes to product prices and shipping rates, every cent counts. According to Ben Kennedy, CTO and co-founder of The Feed, changing the shipping fee to $7.99 outperforms a shipping rate of $8. Reducing the shipping rate from a two-digit figure to a one-digit figure (i.e., from $10 to $9) has the biggest impact on purchase behaviors.

The psychology of free shipping is far more complex than you may initially think. And, of course, there is a downside.

Before you slash your rates, make sure you first consider how you plan to account for the cost of shipping. You can absorb the cost of free shipping in several ways, but, if you fail to account for these, it can and will kill your bottom line.

Offsetting free shipping isn’t as easy as increasing the price of your products. Marking up your prices can counteract the benefit of free shipping if it means your products are no longer competitively priced. Similarly, offering free shipping at the expense of slow delivery times can also harm customer sentiment towards your brand.

Fear not! I have a few eCommerce strategies up my sleeve that’ll help you protect your margins while reaping the benefits of free shipping.

How to offer free shipping while protecting your margins

Free shipping doesn’t have to be expensive. You can give your customers the luxury of free shipping while maintaining ROI. To do this, you need to be smart about how you offer free shipping.

Implementing free shipping rules such as a minimum order volume or creating up-sell rules to boost average order value are just a couple ways you can make free shipping an affordable sales tactic for your eCommerce store.

1) Unlock free shipping at a minimum spend

You don’t have to offer free shipping on all orders. In fact, being selective with free shipping could work in your favor.

Rather than exercising an “all or nothing” shipping policy, create a tier of exclusivity where customers can only unlock free shipping once they’ve met the minimum spend threshold. You could, for example, offer free shipping on orders with a value of $20 or more.

Setting a minimum order threshold for free shipping can increase your average order value. If a customer needs to spend $20 or more to qualify for free shipping, it can tempt them to buy more. After all, would you rather spend $10 plus $4.99 for shipping, or spend $20 and receive free shipping? Chances are, like many other online shoppers, you would prefer the latter option.

2) Boost average order value with upsells

If you don’t want to offer free shipping for spending a flat $20 (or whatever minimum spend you choose), you could use upsells to boost AOV and qualify customers for free shipping.

Upselling at the checkout is a great way to increase cart value while offsetting the high cost of free shipping.

This can be done in one of two ways. First, you could upsell products on all orders. This tactic is similar to the Amazon strategy of add-on items. It’s great for encouraging customers to add related, often high-margin products to their order before they check out.

Alternatively, you could upsell online customers by only offering free shipping if they buy a specified upsell or add-on item with their main purchase. With this method, you get to strategically choose items from your add-on collection and select high-margin products to offset the cost of free shipping.

Using upsells helps protect your margins while providing your customers with another item to enjoy.

3) Provide free shipping for product bundles

Product bundles are a not-so-secret eCommerce tactic for increasing sales and shifting stock. But did you know they’re also an effective free shipping strategy?

In simple terms, product bundling is the act of offering a pre-defined collection of products at a lower price point than if they were bought individually.

Product bundling is a careful balancing act of pairing high-value items with relevant low-value ones. The idea is to build an attractive product bundle that customers want to buy. Stuff your bundle full of low-value items, and the desirability isn’t going to convince shoppers to buy.

You can then offer free shipping on any bundle purchases, including pre-defined or custom-built bundles.

For pre-defined product bundles, you can build the cost of shipping into the price of your bundle. This covers the cost of shipping while also boosting order value and selling surplus stock — a winning strategy for online retailers.

If you want to offer free shipping on custom-built bundles, you could, for example, set a rule whereby customers who buy three of the same item receive free shipping on their order. This lets customers build their own bundle to unlock free shipping.

4) Build the cost of shipping into your product margins

A free shipping option requires you to absorb the cost of dispatching orders. The easiest way to do that is to build the cost of shipping into your product margins. By doing this, the customer will unknowingly cover the cost while still receiving the free shipping incentive.

You can increase product prices to cover the full cost of shipping, or you can increase prices slightly to cover partial costs.

Let’s look at an example to illustrate how to build the cost of shipping into your product margins easily.

Say your average order value is $20 and you sell products at an average price of $5 per item.

If the average shipping cost is $3 per order, that means you would lose $3 each time you provided free shipping.

If, however, you increase product prices by 20% so the average product price is $6, you can offset the cost of shipping on an average order.

Buy 4 x $5 items = $20 order plus $3 shipping ($23 total order value) vs. buy 4 x $6 items = $24 order plus free shipping ($24 total order value)

However, incorporating the cost of shipping into your product prices isn’t always the best route. This method could be damaging if it makes your products more expensive than competitors’. You need to make sure your products are still competitively priced so as not to price yourself out of the market.

You also need to be aware of how large or heavy items might impact your shipping rates. If you don’t account for higher shipping rates for bulky items, your free shipping calculations likely won’t work in your favor. To be safe, you may want to exclude large or heavy items from your free shipping offer.

5) Create a loyalty program

In the world of eCommerce, loyalty pays.

Customers are more likely to promote their favorite brands online, especially if those brands offer high-quality products, rewards such as discounts and free gifts, and great customer service, according to the Brand Watch 2021 Customer Loyalty Report.

Launching a loyalty program with free shipping as a reward is a lucrative way to recoup the cost of shipping.

You could create a loyalty program where customers pay $10 per month to receive VIP benefits like free shipping for a year. This means you get to reward your customers for their loyalty and recover some of the cost of free shipping.

The most obvious example of how this works is Amazon Prime. Prime members can pay $12.99 per month or $119 per year to receive a number of shopping benefits, including free shipping, early access to deals, and a “try before you buy” initiative.

Granted, Amazon is a trillion-dollar industry. However, you can implement your own version of a free-shipping loyalty program on a smaller scale.

Get creative to craft a process that works for you and keeps your returning customers happy. Your loyalty program could, for example, have different tiers that customers reach by either paying more money for the loyalty program or for being a frequent shopper. Within that hierarchy, one of the tiers could unlock free shipping.

If you choose to develop a loyalty program, consider the various risks and requirements. Loyalty programs can be wildly rewarding, but they do need careful implementation.

6) Give away free shipping as a referral perk

Free shipping doesn’t have to be restricted to loyal customers; you could also use it for new customer acquisition. Similar to building free shipping into your loyalty program, you could offer free shipping as a referral perk.

Referral programs let you reward existing consumers, reach new customers, and drive sales across the board.

You could launch a like-for-like referral reward where customers get free shipping off their next order each time they refer a new customer to your store and once that new customer places their first order. The more friends they refer, the more free shipping opportunities they acquire.

In turn, you could give new customers free shipping off their first order. This offer entices new customers to shop with you, increasing your number of average orders. You could pair this offer with a minimum spend threshold to help offset the cost of free shipping and protect your profit margins.

Wrapping up — How to offer free shipping and protect your margins

Free shipping can be a gamechanger for your business, but only if you protect your profit margins while doing so.

To make free shipping financially viable for your business, be smart about how you offer it. Make sure you fully understand how you plan to recover the cost of free shipping and whether it’s a viable option for your eCommerce store.

Choose the free shipping tactic that works best for your store — and remember, you can always change it! Keep an eye on competitor and customer activity so you’ll know whether you need to change tactics to suit the current landscape.

Whatever you do in eCommerce, always keep your bottom line as a top priority.

We’ve all been there: perusing an online shop, adding an item or two (or fifteen) to our cart. Perhaps we’re shocked by our lack of self-control, having placed far more than we needed into the cart. Maybe the taxes were higher than we thought, or unexpected shipping costs jarred us. It’s possible we’ve simply run out of time or interest. Whatever the reason, we exit the tab or window and leave behind our virtual cart filled with unpurchased goodies.

Cart abandonment is a dreaded, but undeniable reality of eCommerce. Understanding the factors that contribute to this is important. By doing so, you can decrease the frequency of cart abandonment and increase the likelihood of closed sales.

Read on to learn more about the most common factors of cart abandonment and how to mitigate them.

Cart abandonment factors to watch out for

What causes cart abandonment? A number of reasons drive shoppers to leave their carts before finishing the checkout process which, when combined, add up to a nearly 70% rate of abandonment.

1) Long or confusing checkout process

One-click buying introduced a major shift for both eCommerce professionals and shoppers. The shorter and simpler checkout process made customers more likely to see it through to the Order Complete page. Think of it this way: Would you stand in a gigantic line for one unnecessary item? Probably not. You might not even stand in a big line for a necessary item.

The biggest perk of one-click buying is that it reduces the likelihood of customers becoming bored or confused while completing their purchase. But, if one-click isn’t an option, you can still streamline your checkout process:

• Reduce the number of steps from “Purchase” to “Complete”
• Ship –> Pay –> Confirm should be the maximum number of steps
• Leverage tools like address lookups and verifications or integrations like ApplePay, GooglePay, and others that can make the process easier for users

2) Unexpected shipping costs

Much like its one-click buying, Amazon Prime’s free and speedy delivery has led to sky-high expectations from online shopping customers. And once expectations have been set, it’s hard to deviate from them.

If your customers click through to the checkout page only to discover high shipping costs or long timelines, they’re likely to abandon the cart. So, what can you do?

It’s not always feasible to meet free or two-day shipping expectations, but it is always possible to be transparent about known costs and/or timelines. If you know your items will ship within 7-10 days of the purchase date, state this on your product pages. If you have free domestic shipping, but flat-rate international shipping, same deal: spell it out. You can’t dictate your customer’s acceptable threshold for shipping fees, but you can be transparent and set expectations honestly.

3) Other surprise costs

Additional costs often cause sticker shock. Although shipping fees are one of the most common repeat offenders, there are also things like customs and import fees to look out for, especially if you sell internationally.

While you can’t always account for or calculate additional duties or taxes, a banner or fair warning alerting customers in certain jurisdictions that their order may or will be subject to duties can prepare customers for the total cost of purchasing your products.

If you do know the relative cost of import fees, be sure to include them in a visible space (for example, in italics just beneath the price of your item à la Amazon). This enables your customer to calculate immediately the price of that product before tax and shipping. By also including those expenses in the same general space, you’ll further provide necessary cost information.

4) Mandatory account creation

Creating an account might feel like a pretty low-effort requirement for online shopping, but many users find the process cumbersome and leave as a result.

The reason why goes back to setting up a seamless check-out process: Mandatory account creation adds extra steps that busy consumers simply don’t want to take.

Give customers the option either to create an account (you can always offer a loyalty program as an incentive) or check out as a guest. For an even better user experience, you can also prompt your customer to set up an optional account after they’ve completed their purchase with the promise of making their future checkouts even easier.

5) Payment security concerns

No one wants to input their financial details when it feels unsafe. As eCommerce fraud continues to cause headaches for professionals and consumers alike, it’s more important than ever to protect yourself and your customers. Enter PCI Compliance Guidelines.

The Payment Card Industry Data Security Standard is an information security standard designed to ensure all companies who accept, process, store, or transmit credit card information maintain a secure environment and protect this data. The PCI DSS requirements can be found here.

In addition to adhering to these guidelines, use high-quality fraud management systems to further protect your customers and help them feel safe throughout the checkout process. This includes requiring the Card Verification Value (CVV) on all credit card payments, using an Address Verification Service (AVS) that ensures the billing address is correct, and clearly stating your privacy and security policies for customers in an easy-to-find location.

6) Shipping address errors

Your customer knows where they live and want their package delivered, but address verification can create a hassle if systems don’t recognize a particular address, as can happen when customers have to input a unit number or post office box. The frustration of being unable to settle the shipping or billing address can lead consumers to throw in the towel altogether.

Using tools that offer address suggestions, like USPS address verification via SmartyStreets or Canada Post’s AddressComplete address verification tools, ensures customers input their address in the manner the postal service will best recognize. If these tools don’t float your boat, SmartyStreets, Loqate, Melissa Data Quality Suite, and many others can help you help your customers avoid address errors and get to the Order Placed page faster.

7) Slow delivery and limited shipping options

Delivering goods across the country and beyond borders can take time if you default to the most economic option. By offering multiple shipping options with varying timelines and, yes, prices, you provide your customers with the most important element: that of choice.

While there’s no denying that free, two-day shipping is practically everyone’s favorite perk, your customers may still be willing to pay a premium for faster delivery times.

8) Restrictions on product quantity

When products are in high demand during peak seasons, product quantity limits can certainly be beneficial for your inventory management. However, product quantity restrictions at checkout can spell frustration for your customers.

If you must implement restrictions, make sure your customers can’t  add quantities greater than those allowed to their cart. For example, if your limit is three, make sure the drop-down doesn’t allow your customer to select 10. You should also note quantity restrictions in your product description.

When possible, offer flexibility (e.g., let a customer contact your customer service team) and provide timelines for restock if the product quantity restriction is based on existing stock levels.

9) Comparison shopping

Ask any savvy shopper and they’ll tell you: they won’t buy something based on the first price they see, especially if the price point is questionable. Consumers look for the best price possible, which is why it’s imperative you do your research and stay competitive with your pricing. If your customer drops an item into their cart only to realize they can save a few bucks elsewhere, they will go elsewhere.

Although you can’t always compete on price point, you can get creative to provide your customers unique offers that deliver added value.

Perhaps your differentiator is a great bundle where the price per item is slightly lower, but the overall revenue impact to you is higher. Investigate opportunities to provide loyalty discounts or subscribe-to-save models to increase value and keep your customers from looking elsewhere.

10) Lack of desirable payment options

Have you ever made it to the end of the checkout process only to realize your preferred method of payment isn’t an option? This frustration is yet another factor of cart abandonment — and an easily avoidable issue.

Research conducted in 2018 unearthed that less than 30% of American adults don’t have a credit card, while 82% do have a debit bank card. That same report concluded that credit and debit usage is on the rise in the U.S., with total card purchases predicted to top $10 trillion by 2023. For shoppers without a credit card, online purchases can get tricky, but payment providers like Paypal allow these same shoppers to pay directly from their bank accounts, a workaround to the traditional online payment catch of requiring a credit card.

More recently, digitized alternative payment options like Buy Now, Pay Later have grown in popularity. A throwback to the days of layaway, companies like Affirm, Afterpay, Klarna, and Sezzle are now available at many e-tailers, making it easier to find a payment option that works at the critical checkout stage.

11) Ambiguous return and refund policy

From buyer’s remorse to poor fit, the reasons for returns are many, and the fear of being unable to return an item can be a turn-off for any would-be customer. According to Shopify, about one in 10 cart abandonments occur as a result of inadequate or ambiguous returns and refund policies.

A transparent and generous return policy can sway customers towards completing their purchase, knowing they’re covered if the product doesn’t meet their expectations. Clearly state your returns and refunds policy, highlight any applicable fees, and explain how the process works so customers feel at ease.

12) Lack of mobile optimization

In 2022, if you’re not thinking mobile-first, what are you thinking? With more than half of all internet traffic shopping from a mobile device, your mobile strategy is more important than ever. More than three-quarters of smartphone users have made an online purchase with their mobile device in the past six months, a number that’s expected to continue to grow.

When building your eCommerce website or product pages, be sure to prioritize the mobile experience first and invest in a responsive website.

How to recover abandoned sales

Sometimes, an abandoned cart is destined to remain in limbo — but not always. In some cases, your customer may simply run out of time or are pulled away from their online shopping activity. In these cases, you can gently remind your customer of their cart items via email or digital ad retargeting based on items they’ve previously added to their cart.

1) Email

Email subject lines like “You forgot something…” or “An item in your cart is selling fast” can jumpstart the checkout process and bring customers back to their carts in a hurry.

Sending a gentle reminder directly to the user not only gives them an easy one-click trip back to the checkout page, but also provides you with an additional checkpoint that can support relationship building and customer loyalty.

Read: How to write effective abandoned cart emails

2) Retargeting

When a customer leaves a product behind, retargeting your digital advertising can keep your product top-of-mind and drive them back to the checkout page to complete the process.

Retargeting involves reengaging previous visitors with the goal of convincing them to come back.

If your site uses cookies, you can use that data to deliver retargeting ads based on the products they engaged with during their most recent visit.

Read: Amazon advertising guide: Best sellers, ads, and pushing slow-moving stock

3) Loyalty discounts

Whether offered as a pop-up during the checkout process or leveraged during the retargeting or email contact, offering loyalty discounts or other cost savings on future purchases is a great way to reduce cart abandonment and/or drive consumers back to the cart they left behind.

You can also promote these types of discounts and offers on product pages — “buy today, save tomorrow!” — to increase the likelihood your customer will complete their checkout the first time.

Read: Customer loyalty programs: 8 Benefits you can provide to encourage repeat customers

Wrapping up — Save on acquisition costs by boosting conversion rates

While you’ll never completely eradicate cart abandonment, you can make changes today that will improve the likelihood of closed sales tomorrow. By focusing on the common factors of cart abandonment and being proactive in solving them, you’ll realize greater sales and create happier customers.

March 2020 may go down in history as the turning point for global eCommerce adoption and acceleration. eCommerce sales launched to all new heights in the immediate wake of COVID-19 shutdowns around the world. As a result of the global pandemic, shoppers turned to the internet to buy everything from grocery store basics to at-home fitness equipment and more — and they did it at rates that would have otherwise taken years to reach.

But, just like bell bottom jeans, what’s old becomes new again.

The advent and subsequent rise of eCommerce over the past two decades saw retailers around the world scramble to keep up or get out of the game. Big chain retailers who simply couldn’t match consumer behavior faced huge losses. Now a new, yet old trend is emerging: the return to experiential shopping.

Following a global lockdown, it’s understandable  people are itching to return to in-person shopping, and as consumers become more comfortable leaving their homes, they’re heading back to stores in a big way. IHL Group, a research and advisory company, found through the analysis of more than 900 chains that retailers are expected to open more stores than they close for the first time since 2017. Thanks to new privacy laws, the cost of acquiring new customers online is skyrocketing, and physical stores have become a less expensive way to attract more shoppers, especially since landlords are more willing to accept shorter and more flexible lease terms in the post-pandemic world.

For eCommerce professionals, this shift is just another in the ever-evolving retail space and presents an opportunity to deliver greater value and better experiences to customers.

Read on to learn more about consumers’ shifting behaviors from in-store to online to in-store again and how you can take advantage of this growing appetite.

Started at the bookstore, now we’re here

Online shopping has become increasingly popular over the past decade and throughout the COVID-19 pandemic in particular, but its history extends farther back than this.

eCommerce arrived on the scene in 1979 with a focus on business-to-business (B2B) sales, while online shopping for the consumer as we know it entered the chat in 1992 with Book Stacks Unlimited (eventually becoming Books.com, which Barnes & Noble later acquired).

With major marketplaces like Amazon, eBay, and other eCommerce platforms beginning to emerge in the mid-90s and evolving into their present incarnations, online shopping today has become as normal as a morning cup of Joe.

Unlike brick-and-mortar stores at the time, eCommerce offerings were seemingly unlimited — Amazon, for example, could stock exponentially more books in its early days than the traditional bookstores’ approximately 200,000 titles, providing shoppers with more choice than ever before.

Thanks to the introduction of Prime and expedited shipping, Amazon further changed the eCommerce space by driving up customer expectations and forcing the competition to get creative.

What is experiential shopping and why should I implement it?

Although more and more consumers are flocking to the internet for their shopping needs, retailers around the world have dug their heels in and created unique offerings to draw customers back through their doors by providing experiential shopping.

Experiential shopping is about more than simply walking into a store and selecting items to purchase; it’s an all-encompassing experience for shoppers to engage with your brand and connect on a personal level, focusing more on the customer than on sales. The driving point is physical retailers deliver things that can’t be replicated online.

So, what is experiential retail?

For starters, it’s immersive and shareable. This could mean the use of Extended Reality (XR) tools like Augmented Reality (AR) and Virtual Reality (VR). Experiential retail inspires shoppers to whip out their smartphones and share their experiences in real time with followers, generating buzz for your brand and building irreplaceable social proof organically.

The priority of experiential retail isn’t sales — it’s creating an on-brand experience that engages and delights a customer from the moment they walk through your doors. The goal should always be to build a relationship with your customers and focus on their needs, even if it feels counterintuitive to refrain from delivering your killer sales pitch.

Aim to provide your customers a personalized and engaging experience. Lush offers a great example of experiential retail. Head to your nearest Lush store and notice how each of your five senses is engaged, as well as how attentive the staff is to your needs and wants.

Additionally, experiential shopping completely upends customer expectations. Consumers are hardwired to expect pushy salespeople, traditional cash registers, and slow lineups. Experiential retailers are bucking these antiquated trends to build exciting, engaging spaces to shop.

Another great example of experiential shopping? IKEA (big shock). Rather than simply filling its showroom with products categorized by function or type, IKEA’s curated and fully constructed “rooms” allow customers to get a sense of what their lives would be like if they incorporated those products into their homes.

Bridge the gap between online and in-store

Creatively bridging the gap between online and in-store can be challenging, but it’s not impossible. If you currently have a storefront presence, that’s great! There are oodles of unique and fun ways to leverage the space and gain an edge. But, if you don’t have a storefront presence, don’t panic! With technology, social media, and good old-fashioned imagination, you can build amazing experiences that inspire and dazzle your customers.

Here are some of our favorite ways to link the virtual with the physical world if you don’t have a storefront presence:

1) Leverage XR to offer an in-store experience online

Virtual stores are popping up online, creating an in-store experience from the comfort of your shoppers’ living rooms. The use of XR tools like VR and AR lets you craft unique shopping sessions for your customers: They can browse your “store room” virtually or even try on items via AR tools that superimpose items like eyeglasses, makeup, and hair dye using a smartphone or computer’s camera image.

If you’re not yet ready (or lack the interest) to invest in XR tools, consider “live” social events instead. A [Your Store] live shopping event could include you or a member of your team, an influencer, and some of your best-selling items. Host the online event on your preferred social media channel and invite customers to join the party, shop top picks, and engage directly with your brand. These events can be highly personalized and curated to meet the needs of specific target audiences and offer an in-person experience without the out-of-the-house requirement.

2) Create unique opportunities to build community

You don’t need to have a dedicated retail space or storefront to foster an incredible in-person shopping experience. Partnering with local markets or other brands is an effective way to reach new customers and give your existing base a unique chance to engage with your brand.

Pop-up shops at markets or events allow customers to gain access to special deals, novel experiences, and to interact with the brand in a more personal setting. These events can be low-cost — or even no-cost, depending on your partnership — ways to attract new customers and boost exposure for your brand. From seasonal markets like Christmas fairs and Spring Flings to activity-based pop-ups like a yoga class accompanied by racks of fitness apparel, the opportunities are endless.

Whatever the event you design, keep your focus on building relationships and a sense of community among customers, and let the sales come in organically.

Make the most of your physical location

For retailers with both a physical store and an eCommerce presence, making the most of your physical location is paramount. It’s possible (and even likely) some of your online customers aren’t aware of your physical location, and vice versa, meaning you can expand your audience in both spaces with a relatively low lift.

Here’s how we recommend you take advantage of your physical location.

1) Establish a hub for distribution & in-person shopping

Regular locations can provide a hub for distribution as well as in-person shopping experiences that build relationships. With Covid-19 restrictions easing, many communities have seen a surge in #BuyLocal initiatives as a result of supply chain upsets and increasing interest in supporting local businesses.

As a distribution hub, your physical location could house a majority of your inventory, which you can update on your eCommerce platform as sales occur. Allowing in-person shoppers to see your distribution process and practices builds trust in your eCommerce branch, encouraging omnichannel growth.

When it comes to in-person shopping, your physical location lets you offer your shoppers unique experiences. Consider hosting your own pop-ups by partnering with local influencers or leveraging XR technologies to demonstrate how your supply chain process operates. Or, simply set up a destination for your shoppers to come in and engage with your brand and products.

2) Offer your customers additional choices

A great way to boost the customer experience is to let them choose their own adventure. Retail locations allow customers to select the shopping method or experience they prefer. This can include buying online and picking up in store (BOPIS), curbside deliveries for limited or no-contact interactions, shopping online and reserving to pick up and pay in store, and other options.

For shoppers who enjoy the in-person element of interacting with a brand, but perhaps lack time, having the ability to browse online and select items for in-store pickup can be an attractive perk. Similarly, the cost savings and reduced carbon footprint gained by avoiding traditional delivery fees and packaging could be viewed as a benefit for eco-conscious shoppers.

Wrapping up — The future promises a new harmony between eCommerce and retail

Just a few years ago, much discussion revolved around whether or not eCommerce would wipe out brick-and-mortar retail. On the contrary, it seems online and in-store experiences have become more closely linked as customers adopt a fluid approach to shopping. The Wall Street Journal notes the major store retailers opening today are different; they’re smaller and offer experiences beyond simply browsing products.

Although consumers have expressed an interest in and an appetite for experiential shopping as well as a return to the retail store, it doesn’t mean you need to rush out immediately and find a permanent space for your business if it wasn’t previously part of the plan. According to recent statistics, eCommerce is expected to grow another 15.9% in 2022, and consumer behaviors still show a clear preference for the ease and convenience of online and mobile shopping.

Whether or not you currently have a physical space, keeping an eye on this old-but-new trend towards in-person shopping can help you carve out an edge and expand your business. Whatever your future plans, now is the perfect time to reimagine your approach to customer service and experiences, both online and in the real world.

Be sure to focus your energy on a unique and streamlined experience for all customers, deliver on your promises, and prioritize the customer relationship at every step of their journey.

This is a guest post from the Payability team.

Growing a business is one of the most challenging and rewarding journeys a person can embark on. Every phase of business growth comes with excitement and requires significant investment. While each one is different, all businesses share certain similarities in their life cycles, from the early stages of development to an initial public offering (IPO).

One consistent, long-term need that small businesses share is cash flow. Every stage of growth requires an injection of capital, either from business profits or outside investors –– sometimes from both.

Read on to discover the different growth stages where merchants should inject capital into their business to propel growth.

3, 2, 1, Launch! –– Acquiring start-up Capital

Most businesses start as an idea dreamed up at someone’s dining room table. While the initial funding will come from the owner’s pocket, the time eventually comes to secure outside funding to spark initial growth. People often acquire launch capital for small businesses from small loans or by calling in favors from family and friends.

The launch phase is when a small business grows from an interesting idea into a legitimate venture.

Securing early funding with a minimum viable product

During this phase, small businesses conduct market analysis and product testing to develop a minimum viable product (MVP). The MVP is the product or service that provides the foundation of the entire business model. In the long term, every new product line stems from the original MVP.

A business’s MVP sets the initial trajectory for long-term growth and transformation. A proven MVP paired with a strong business plan will attract investors during the first stages of expansion. This early injection of capital allows small, private companies to expand marketing and advertising budgets to generate word-of-mouth for their products.

To grow beyond the start-up stage, entrepreneurs need more than an idea –– they need proof. To prove the merit of their business venture, most entrepreneurs choose to test their MVP in the market, gathering accurate market data to present to potential investors. Robust market performance data sets them up for the next stage of business: the growth phase.

The growth phase –– Acquiring venture capital for business development

During the growth stage, a small business evolves into a brand. This requires investment in staff, technology, equipment, inventory levels, and more. That’s where growth funding comes in. While start-up funding fuels initial product development, growth funding provides the cash flow for marketing and operations.

In this stage, a business owner (or hired representative) presents the MVP along with a detailed business plan to angel investors, venture capitalists, and other private investors to secure growth funding.

Small businesses can secure early growth funding through many avenues, but it typically comes in the form of cash flow aids, private investors, or loans.

Angel investing and venture capital

Private investors — including angel investors and venture capitalists — are typically individuals with large amounts of cash who will invest in small businesses in exchange for a portion of the ownership. On the upside, these investors offer a swift capital injection for a growing business. On the downside, as part owners, they have the power to challenge the company founder’s decisions — or even eject the founder from the company entirely.

Small business loans

Entrepreneurs with solid business plans and existing cash flow can acquire small business loans from credit unions and investment banks. These loans provide an injection of capital while leaving the founder in control of the company. On the other hand, small business loans are difficult to qualify for, require lengthy credit checks, and often take a long time to deliver funds.

Capital advance

A capital advance is one of the swiftest and easiest ways to generate cash flow for small businesses. It’s easy to qualify for and provides quick funding for small companies. However, a capital advance typically requires a record of business success and so isn’t available for unproven companies.

Using growth capital to fund early business development

The growth stage is when small businesses refine their marketing campaigns and find their voice. During this time, brands will test different types of packaging, come up with standard procedures for inventory flow, and study and react to marketing trends to maintain a business edge and capture greater total market share.

In the growth phase, a business will face heavy competition as it works to prove its value to consumers. The company may consider adding new product lines, purchasing sponsored ads, or investing in staff and technology to improve customer service. Stellar customer experiences will fuel word-of-mouth advertising to build trust and drive conversions. At the same time, strategic marketing will generate leads and keep the brand at the forefront of consumers’ minds.

Success during the growth phase of a business’s life cycle will set the stage for the next level: the maturity phase.

The maturity phase –– Increasing market share by building a reputation

During the maturity phase, a business is finally able to study its cash conversion cycle (CCC) metrics and make improvements according to performance data. At this point, a company should have several months or years of data to review and respond to, along with a strong team and standard operating procedures.

A mature business should carefully analyze its CCC data to determine how long it takes (and how much it costs) to acquire new customers and move finished products. Critical analysis will reveal optimization opportunities in staffing and procedures — and expose any operational inefficiencies. Discovering and capitalizing on these opportunities is essential to attracting additional investors.

In the maturity phase, a business with healthy synchronization between marketing, sales, and operations will consistently outperform a company with asynchronous goals and inefficient communication.

Funding a mature business

A mature business acquires growth funding from two primary sources: profit reinvestment and public investors. While some businesses, such as Publix, grow to multi-billion-dollar corporations without ever “going public,” the largest companies in the world — for example, Apple, Microsoft, and Amazon — are often publicly owned. Becoming a publicly traded company is a complicated process that we won’t explore here, but it is an option for large, thriving businesses.

For most mature small businesses though, profit reinvestment will drive future growth. This means the owner will have to decide between saving profits, paying profits out as wages, or investing profits in expansion.

Supply chain analysis and inventory management are key

After a small business makes a name for itself, inventory management and demand forecasting are critical to avoid inventory stockouts (as many companies learned the hard way throughout the COVID-19 pandemic).

Careful supply chain analysis based on market research and past performance can result in market share gains during busy seasons like the holidays. A business that approaches each quarter with a strategic growth plan that integrates cash flow, supply chain, and marketing will reap significant success.

For example, in 2021, holiday shopping started earlier than ever due to a combination of pent-up pandemic demand and global supply chain issues. Many businesses secured their holiday stock levels in advance and launched their holiday campaigns as early as September. Businesses that acted quickly in 2021 saw increased total sales throughout the fall and winter, despite the first historical year-over-year decrease in Black Friday/Cyber Monday sales.

Reducing business costs drives additional growth

For a mature business, reducing costs is a primary way to maintain growth. One of the best examples of a mature business achieving this comes from the grandfather of American industry, John D. Rockefeller.

Rockefeller regularly audited his costs for opportunities to reduce his operating expenses. In one famous story, Rockefeller noted his production line sealed each kerosene can with forty drops of solder.

Wondering if he could do it with less, he experimented and found that, while 38 drops occasionally resulted in a compromised seal, 39 had the same success rate as 40 drops. The new sealing procedure, implemented at scale, saved Rockefeller a fortune in materials and labor.

Diversification creates new growth opportunities

Product innovation (and adding new product lines) is another principal way to grow a mature business. Some businesses may opt for in-house research and development, while others may acquire competitors or adjacent businesses.

A great example of a highly diversified, mature company is Coca-Cola. Coke started with a single product, then slowly expanded into additional soft drink offerings. Eventually, the brand branched out into other types of beverages:

• They reached water drinkers with AHA sparkling water and smartwater.
• They attracted health-conscious consumers with “Simply” beverages, fairlife products, and Honest Tea.
• They enticed athletes and physically active consumers with Powerade and vitaminwater.

Coca-Cola has driven business growth and drawn investors for over 130 years by constantly experimenting and innovating.

Creativity and efficiency drive growth during the maturity phase

The maturity phase is all about optimization. After several years of operation, a mature business will examine itself for weaknesses and risks. Companies that commit to ruthless optimization will continue to attract investors, even over a century after their initial public offering.

Businesses that don’t continue to grow during the maturity phase will enter the final stage of business growth: decline.

The decline phase –– How to save a declining business

Descent is the final stage of the business life cycle. When a business enters decline, it must pivot or close. A company will present many subtle signs of stagnation before entering decline, for which business owners should always remain vigilant.

Declining revenue is a warning sign

Declining revenue is never a good sign for a business, but it doesn’t always signal the end. For example, major black swan events like wars or pandemics can cause enormous losses over one or several quarters. However, if net income continues to drop for a year or more, it’s time to investigate your revenue streams.

Perhaps a competitor has begun to threaten your dominance, like upstart rental company Netflix did to Blockbuster, the former reigning champ of movie night. Maybe technology and shifting consumer sentiments have transformed the market; for example, the rise of eCommerce led to the demise of many major retailers who resisted the change.

Decide whether to exit or evolve

At this point, an owner needs to decide either to exit the business — through sale or dissolution — or evolve. Depending on the company’s size, this decision can affect anywhere from dozens to thousands of employees.

Business owners who are ready to let go should implement a careful exit strategy to ensure they stay on the right side of federal business laws.

How to renew a declining business

Renewing a declining business is similar to starting from scratch. The owner must draft a new business plan, attract investors, and make hard decisions about their trajectory. As part of the renewal campaign, the business may pivot its goals entirely, replace staff, or even make deals with competitors, much like Apple did with Microsoft before it became the biggest company in the world.

While it isn’t easy to revitalize a dying business, it’s possible for a company to convert even major failure into success.

Grow your business with cash flow aids from Payability

If you’re ready to enter the next stage of business growth, Payability is here to help. Payability provides versatile funding solutions for eCommerce sellers.

Its Instant Access provides daily marketplace payouts for eCommerce businesses, while Instant Advance provides instant funding of up to $250k for small business growth. Don’t let slow money hold your business back; accelerate your success with eCommerce funding tailored to your needs.

Payability’s solutions are swift, easy, and flexible and offer benefits for all kinds of eCommerce businesses:

• Easy approval — No credit check required! Apply online and get funded in as little as one business day.
• Free, fast transfers — Access your money on your schedule with Instant Transfer, Same Day ACH, or wire.
• Earn cash back — Get up to 2% cash back on every purchase you make with the Payability Seller Card.

Payability is ready to help you grow your business. Get started today!

We all know the saying “failing to prepare is preparing to fail.” This rings especially true for your eCommerce launches. If you don’t set goals and develop a strategic roadmap for launching, you’re setting yourself up for ruin.

90% of eCommerce start-ups fail within the first 120 days of operation. The top three reasons cited for this are poor online marketing (37%), lack of online search visibility (35%), and little to no market for their products and services (35%). But fear not; with a well-developed pre-launch checklist focusing on driving awareness and interest, you can make sure your eCommerce brand is properly equipped for a smashing success.

Don’t launch your eCommerce store, new product line, or latest campaign until you’ve first ticked off everything on our eCommerce pre-launch checklist.

Why you need an eCommerce pre-launch checklist

Whether it’s a new eCommerce store or a new line for your existing eCommerce brand, launches of any type require a substantial amount of time, effort, and hard work.

With a solid eCommerce pre-launch checklist, you can make sure those precious resources pay off.

Even the most successful eCommerce stores can’t just launch a product and cross their fingers. If you want to promote the long-term success of your brand, you need to fine-tune and optimize your launch strategy.

Having a pre-launch checklist will help you stay on track by holding you accountable for your goals. Using this checklist, you can develop a clear action plan for your launch strategy that will minimize mistakes, streamline your launch process, and ensure your launch is poised for success.

Your pre-launch checklist can also guarantee sales before you even have inventory. It’s a sure-fire way to make sure your launch is a success before it even goes live.

Better yet, you can then use this checklist to consider what did (or didn’t) work well in previous launches, allowing you to roll out optimizations and improvements ahead of your next one.

Your must-follow eCommerce pre-launch checklist

You need to personalize your pre-launch checklist to your exact needs to give your launch the best chance of success.

To help you get started, we’ve highlighted the six eCommerce activities that every pre-launch checklist should include.

They are:

• Target the right channels
• Build your email list
• Take pre-orders
• Make scarcity a good thing
• Generate future sales
• Plan your logistics

With these key activities in mind, let’s take a look at how you can build a pre-launch checklist that generates sales and generates success before you go live:

Target the right channels

When planning an eCommerce launch, you need to make your launch campaign (and your wider brand) visible in the places where your audience spends most of their time.

Knowing which channels to target will help you get your launch in front of the right people at the right place. Consider the channels your target audience uses before deciding which ones to target.

You can either look at where most of your existing customers come from (if you have existing data) or talk to your target audience to understand more about their online shopping behaviors and interests.

When targeting the right channels for your eCommerce launch, use a mix of organic and paid channels.

Organic traffic channels include tapping into your personal network, leveraging partnerships, hosting events, and delivering an organic social media strategy. As for paid avenues, you can make use of paid social media marketing and advertising across channels such as Google Ads, affiliate marketing, and display advertising.

Decide which traffic channels are best for your launch, then craft a launch plan that’s specific to each of them.

If you’re launching a product aimed at new homeowners and interior design enthusiasts, organic and paid Pinterest marketing might be one of your must-target traffic channels. However, if your campaign targets parents-to-be, you might find them more responsive to Google Ads and partnerships with trusted experts in the parenting niche.

As a brand that’s just getting started, never underestimate the power of your personal network; it can prove to be your largest source of growth. Your network can spread the word about your launch, demonstrate positive sentiment, and serve as personal recommendations for your campaign. Be explicit in your approach and don’t be afraid to ask your connections to show their support.

Build your email list

Reaching your ideal customer through channels such as social media and paid advertising is great. But nothing compares to connecting with those people through email marketing.

Earned channels, like SEO and marketplace ads are unpredictable. You’re going head-to-head with competitors, algorithms can change, and the success of your chosen avenue is in the hands of others. So, having a channel you own (i.e. email marketing) lets you exercise control over the conversations you have with your target audience. The result? You’ll be able to nurture those relationships to generate more sales.

As part of your eCommerce pre-launch checklist, make sure you develop a plan for building your email list before launch.

Expanding your list will not only mean you “own” your customers (as detailed above), but it will also give you insight into launch demand. You can then use this insight to forecast supply planning and paint a picture of what sales might look like once you go live.

Contacts on your email list are likely highly engaged customers who’ve demonstrated a genuine interest in your launch. This means you’ll have a strong pool of people and early adopters you can tap into for product refinement and customer feedback further down the line.

If you’re wondering how to build an email list as part of your pre-launch checklist, try these tactics:

• Host a giveaway for people who sign up for your mailing list
• Create a pre-launch landing page containing your mailing list subscription form
• Leverage social media to convert followers into email subscribers
• Guest post on relevant publications with a link to your mailing list
• Partner with trusted experts and brands in your niche to promote your mailing list

Focus on growing your email list and you’ll foster a strong community of early adopters and customers to champion your launch.

Take pre-orders

eCommerce launches are risky, but you can offset some of the risk by taking pre-orders before you go live.

Accepting pre-orders builds momentum before your launch. It’s a smart marketing strategy that generates buzz while also allowing you to gauge market demand for your product. You can then forecast product demand and inform production runs based on these pre-orders.

Securing pre-orders locks in sales before you go live and, potentially, before you even order stock. You can then use the revenue from these sales to fund production, boost your launch marketing efforts, or put them back into the business pot for future launches.

Your pre-order strategy is also a smart way to leverage quiet periods for your business. If, for example, you know your sales are typically lower during the spring months, you can develop a summer launch campaign that accepts pre-orders in the preceding season. This will boost your revenue during these commonly quieter months while also fostering excitement for a summertime product launch.

If you choose to take pre-orders during your pre-launch period, give yourself plenty of time to build momentum. The typical pre-order timeline takes place between two weeks and two months ahead of going live. If you launch pre-orders too soon, you’ll lose interest. But launch too late and you won’t give yourself enough time to gain interest.

You can accept pre-orders through a third-party platform such as Kickstarter. Alternatively, you can set up a pre-order option on your product page, create a pre-order landing page, or use your email list to collect customer information for pre-orders.

Pre-orders are commonplace in the gaming industry. From consoles to individual games, gamers can be found lining up to secure the latest releases before they launch. Take Cyberpunk 2077, for example: Ahead of launch, this game secured eight million pre-orders, which equates to approximately $500 million in revenue.

Make scarcity a good thing

Your items are scarce because you haven’t launched yet, but that can work in your favor.

Leverage scarcity as a way to build exclusivity for your eCommerce launch. With it, you can increase product demand and collect more leads and sales for your launch.

Some of our favorite ways to leverage scarcity for your eCommerce launch are:

• Making a waiting list
• Offering invite-only access
• Creating exclusive launch content for members
• Sharing limited early-release product runs
• Incentivizing early orders

Don’t let scarcity hold you back. Have fun with it and use it to boost hype and demand for your launch.

Making a waiting list introduces a sense of exclusivity around your eCommerce launch. It also gives people an opportunity to be the first to get their hands on your new offering. In a similar fashion, providing invite-only access can add a layer of prestige to your pre-launch strategy by generating both FOMO (fear of missing out) and desirability.

Meanwhile, established eCommerce brands can reward loyal members with exclusive launch content and early access to product launches ahead of the masses.

Transform stock scarcity into a positive by announcing you’ll only release a limited number of items at launch, with the rest to follow at a later date. This presents you with an opportunity to ramp up pre-orders or collect contact information for the release announcement — a win-win situation for you.

You can even generate scarcity and exclusivity within your pre-launch strategy by incentivizing early orders. For example, you could offer a free gift for the first 100 orders. Doing this creates scarcity around the initial orders and encourages people to get their orders in early if they want to bag the limited run of free gifts.

Generate future sales

Your pre-launch strategy should focus on collecting contacts as well as sales.

You can use your pre-launch checklist to collect contacts and encourage future sales.

While we’ve already mentioned the importance of building an email list as part of your eCommerce pre-launch checklist, we wanted to touch on how this can benefit your future sales, not just launch revenue.

In your pre-launch strategy, create a sign-up or waitlist landing page for your campaign. This waitlist can be an effective tool for building anticipation leading up to your product going live. Post-launch, you can then tap into these contacts for future marketing and sales activity, nurturing the leads and turning them into valued customers.

You can create a waitlist landing page on your website that’s connected to your email marketing platform through a sign-up form. This will let you collect contact information from people who are interested in your launch offering. As such, these contacts should be both high quality and relevant to your business.

Send out a series of pre-launch emails to your email subscribers to remind them about your launch, further generating hype and demand. Once ready to go live, these subscribers should be lining up, ready to get their hands on whatever you’re offering.

Post-launch, you can reengage these contacts to inform them of future launches, gauge feedback, and keep them up to date on new product releases, sales, and other offers. This will feed into your long-term sales strategy, driving sales well into the future.

Plan your logistics

Finally, no pre-launch checklist is complete without an ironed-out logistics strategy.

For an eCommerce launch, you need to know exactly how you plan to hold stock and fulfill orders. Otherwise, your campaign will fail at the last hurdle. Nobody wants to sign up for a pre-launch only to find out it’s oversubscribed and they’re unable to get their hands on the goods.

Pre-orders guarantee immediate shipment upon release — however, this only works if you forecasted effectively. Manufacturing and logistics departments need to stay on their toes to react appropriately to supply issues.

An example of logistics planning gone wrong can be seen with Sony’s launch of the PS5 gaming console. In the lead up to the launch of the PS5, Sony ran a large-scale pre-launch campaign. However, they underestimated the market demand and were unable to fulfill pre-orders to schedule.

This logistical nightmare, teamed with Sony forgetting to mention the pre-order period during their PS5 launch event, had a snowball effect: stock sold out within seconds, producing a backlog of orders that couldn’t be fulfilled. (I was only able to land one within a 5-minute order window a year after they released).

If you fail to plan your logistics, you put your entire eCommerce launch at risk. Just like Sony experienced, overlooking your logistics can result in slow lead times, insufficient inventory to meet consumer demands, and dissatisfied customers.

To combat this, you need to meticulously maintain and monitor stock forecasting and the logistical needs within your pre-launch strategy. If you plan to sell on Amazon, you can use MyFBAPrep to offload your logistics and gain end-to-end transparency. This will allow you to know exactly how much stock you have for future sales.

Wrapping up — Crafting a successful eCommerce pre-launch checklist

Your pre-launch checklist is about more than organization; it’s an opportunity to grow your brand before you’ve even launched. The result? It drives traffic and sales to your eCommerce store while also forging strong relationships between you and your customers.

Next time you plan to launch a new product, campaign, or even an eCommerce business, make sure you refer to this checklist.

From choosing which channels to target to determining how to build an email list and embracing scarcity, you can adapt this checklist to help your launch generate as many contacts and sales as possible.

Amend and optimize your pre-launch checklist with every new launch to produce a strong strategy that drives success for your store.

Sellers on Amazon have two main choices for their order fulfillment: Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM). Over the past year and a half, many sellers have been forced to rethink their fulfillment strategies as a result of the COVID-19 global pandemic, worldwide supply chain upsets, and Amazon’s own restrictions for FBA and warehousing.

If you previously used FBA exclusively, or if you’re still learning the ropes of fulfilling orders yourself, this Amazon FBM 101 article is for you.

Fulfilling your own orders can be complicated: You have to deal with Amazon prep guidelines, finding a reliable third-party logistics partner (3PL), customer service, tracking, returns, and more. It’s no wonder many sellers feel overwhelmed.

The good news is that FBM doesn’t need to be overwhelming — if you know what you’re doing.

Read on to learn everything you ever need (or want) to know about FBM.

What is FBM?

Fulfillment by Merchant (FBM) means you, the seller, are responsible for every element of your shipping and handling process. Instead of paying a service fee and shipping your inventory to Amazon distribution centers for fulfillment, you rely on your own resources to prepare and ship items directly to buyers. With FBM, you have complete control over this entire process, from purchasing to shipping and receiving, as well as customer service and managing returns.

Contrary to this description, FBM doesn’t necessarily mean you go it alone. Many sellers choose to work with 3PLs like MyFBAPrep to enable and support the fulfillment process.

FBM is not Seller Fulfilled Prime

It’s important to note that FBM is not the same as Seller Fulfilled Prime, which allows merchants to fulfill on their own and display the Prime badge on their non-FBA listings as long as they meet certain speed requirements and SLAs.

Seller Fulfilled Prime requirements include:

• Offer Premium Shipping Options
• Ship over 99% of your orders on time
• Have an order cancellation rate of less than 0.5%
• Use Amazon Buy Shipping Services for at least 99% of orders
• Have nationwide delivery coverage for all standard-sized products
• Use shipping methods that support weekend delivery and pickup (Saturday or Sunday)
• Meet targets for one-day and two-day delivery promises
• Deliver orders with our supported Seller Fulfilled Prime carriers
• Seller must agree to the Amazon Returns Policy
• Allow for all customer service inquiries to be dealt with by Amazon

FBA vs. FBM

Both FBA and FBM share the same goal: to get your items to your buyers quickly and efficiently. Both methods can achieve this, however, your business’ role and degree of involvement in each differs.

For starters, Amazon manages all FBA products. You send products to a designated Amazon fulfillment or distribution center and Amazon then picks, packs, and ships products when they sell. If any returns come in or customer service issues arise, Amazon handles those, too.

FBA products are displayed automatically with Prime badges to Prime members, and shipment often adheres to the famous two-day Prime shipping. This is in contrast to FBM, where sellers are in charge of these aspects of the order fulfillment process.

According to Jungle Scout, other key differences between FBA and FBM include:

• FBM sellers enjoy more revenue, with 33% earning more than $25K monthly versus 26% of FBA sellers.
• FBM sellers launch their Amazon businesses faster, with more than half going live within six weeks.
• Finally, FBM sellers spend more time on their business, with 20% investing more than 40 hours a week, compared to 16% of FBA sellers.

Pros and cons of FBM

If you’re trying to decide between FBA and FBM, it’s important to review their pros and cons and see how well they meet your expectations. Choosing your fulfillment strategy, either FBM or FBA, comes down to the unique needs of your business, and it’s likely those needs will change over time, which means your strategy will, too.

The most obvious challenge of FBM is that you’re responsible for figuring out the logistics, warehousing, preparation, and customer service required for your Amazon sales. On the other hand, this also means you have all the power.

Advantages of FBM

• Total control of every aspect of your business
• Better margins and cushions
• Reduced risk of unavoidable losses due to Amazon policy changes
• Less paperwork and processes to deal with, freeing up time to spend on other activities
• More easily build a relationship directly with your customers
• Freedom to run your business as desired
• You know exactly what’s in stock, what’s selling, and what changes you need to make to ensure ongoing success because you manage operations from end to end
• You can choose a 3PL tailored to your needs to support your fulfillment strategy

Disadvantages of FBM

• When everything is in your control, it’s also on you to fix it when things go wrong
• For high-volume businesses, fulfillment can be an enormous task (and even an entirely separate business you have to run on the side)
• If you’re not properly set up, you could run into big, unexpected costs
• You have a lower likelihood of winning the Buy Box
• You need enough space to prep, store, and package your inventory neatly and systematically
• Overhead fees for warehousing, staff, and shipping can outweigh FBA pricing if you aren’t careful
• You need to find a reliable logistics network, or risk late deliveries

Creating your FBM strategy

Your FBM strategy will be unique to your business and will include many moving parts. We recommend using a combined approach of both FBA and FBM to streamline your operations and maximize your efficiency and sales.

FBM setup in a nutshell

When you sell using FBM, assuming you already have an Amazon seller account, you simply list a product to sell and select “FBM” as your fulfillment channel. Your FBM product listings should have the same relevant information as your FBA listings: great visuals, strong written content, keywords, and an accurate item description. You’ll also include the price, condition, and the quantity.

When a sale goes through, you need to fulfill your order quickly. To start, you must pack your item according to Amazon’s prep and packaging guidelines. Your chosen delivery service will then get your product to your customer’s doorstep. If customer service requests arise, you’re responsible for those as well, and you’ll need to process returns and refunds when they occur.

FBM implementation

Implementing a strategy is often a difficult task to accomplish, and this is where a little creativity and pre-planning come into play.

To implement your FBM strategy, coordinate your teams and processes so you’re ready to fulfill an order at the drop of a hat. Strategically organize your products in storage into a system that’s easy for you (and your team) to manage. This could include placing lower-volume products in a less accessible spot, and high-volume products at eye level near the front of your warehouse so you can easily grab your best-sellers.

Ensure you have the appropriate packing materials, labels, inserts, and any other items you need for your Amazon prep on hand to avoid last-minute trips to the store for things like boxes, packing tape, or bubble wrap.

Finally, establish a process for fulfilling and tracking your order progress. Are you handling this exclusively? Or is a team member going to be responsible? Assigning roles and accountability is an important step in implementing your strategy.

And don’t forget — you don’t have to do it all alone.

When to choose FBM vs. FBA

At times, FBM will be more sensible for you than FBA and vice versa, but knowing when can be tricky.

If you sell exclusive items such as handmade products, FBM can be the better option. An FBA seller has little chance of winning a deal because FBA can deliver more quickly, and you can build your brand and credibility using unique packaging and inserts.

FBM is also a good solution if you sell large or more expensive products, which carry significantly higher FBA fees. In these instances, it’s best to find a prep partner and 3PL that specializes in this type of product to support your needs.

Small-volume businesses would benefit from using FBM as well, since shipping isn’t an overwhelming task and won’t impact the standard Amazon and customers expect.

Similarly, FBM is a great solution for your lower-volume products (those that don’t fly off the online shelves and might incur higher long-term FBA storage fees).

That means FBA is a good bet for your highest-volume and best-selling products. This puts the bulk of your work onto Amazon and reduces the burden of managing a high volume of deliveries. Not to mention, the more you sell, the more likely customer support inquiries will pour in, which Amazon handles when you use FBA.

Of course, you can expertly manage even your high-volume products via FBM if you work with a 3PL who can handle fulfillment on your behalf.

Fees and pricing to keep in mind

FBM comes with a different set of fees from FBA, since you aren’t purchasing storage and fulfillment services from Amazon. Instead, you’ll have to deal with the standard cost of selling on Amazon.

The three main fees to keep in mind are a monthly subscription fee, referral fees, and per-item selling fee.

Monthly subscription fee

Professional Selling Plan: USD $39.99 per month. If you sell 40 or more products every month, this one would be the most cost effective.

Individual Selling Plan: No subscription fee, but you need to pay the per-item selling fee instead.

Per-item selling fee

Professional sellers: No per-item fee, as you would be paying the monthly fee.

Individual sellers: USD $0.99 fee for each item sold, so this is most cost effective for low-volume or casual sellers.

Referral fees

When you list and sell your products on Amazon, every sale made is considered a referral. Amazon’s referral fee will depend on the type(s) of product you sell and usually falls between 8% to 15% (with 30% and 45% being on the higher end, associated with Amazon products).

Additional fees

If you choose to partner with a 3PL to handle your Amazon FBM, you need to factor in expenses like storage and fulfillment costs. If you store and fulfill sales on your own, look into these fees to understand what strategy or solution is best for your bottom line.

Don’t forget opportunity costs, too — you’ll be spending your own time packing boxes and running to shipping supplies stores instead of growing your business.

Common FBM challenges

As with any strategy (including FBA), FBM comes with a few challenges that need to be managed and mitigated.

Bandwidth

Perhaps the greatest challenge for small businesses using FBM for their Amazon sales lies in the bandwidth needed to pick, pack, and ship items during busy times.

For lean teams, this can quickly become overwhelming with high-volume items, which, in turn, creates shipping delays that diminish the customer experience and potentially breaks compliance with Amazon’s shipping time requirements.

Shipping times

Two-day shipping has become the standard expectation for Amazon buyers, but this timeline may be unrealistic if you lack a strong supply chain network or shipping partner to support you.

Read: What to look for in a third party logistics provider

Space

Storing items takes up space, and leasing or owning warehouse space can be pricey. Additionally, you need a place to physically prepare those orders for fulfillment.

Adequate warehouse real estate can be a major challenge for FBM sellers, especially those with high-volume businesses that keep large quantities of stock on hand.

Customer support

Both a challenge and a perk, direct access to your customers is an FBM characteristic typically not experienced by FBA sellers since Amazon handles customer service/support.

However, customers can be needy, and handling their requests can be time-consuming. Since Amazon requires vendors to match its return, customer satisfaction, and timeliness policies, this can produce a major challenge for FBM sellers.

No Prime badge

Unless you’re already a member of Seller Fulfilled Prime (there’s currently a waitlist and Amazon doesn’t appear to be expanding the SFP program), missing out on that Prime badge can be a drawback for FBM sellers.

However, your FBM products can still offer free two-day shipping or any other free shipping speed that works for you. Once you’ve consistently met the Seller Fulfilled Prime requirements you can then consider applying for the program to get the Prime badge.

Choosing a partner for your FBM strategy

Even if you use FBM for some or all of your Amazon selling, you can still seek outside help. A partner like MyFBAPrep specializes in handling fulfillment on behalf of Amazon sellers to ensure products are picked, properly packed, and shipped quickly to customers for a seamless and efficient experience. Better still, a great partner will help mitigate the challenges outlined above.

Look for a partner who understands Amazon’s requirements and who will help you stay on top of policy changes as they arise so you remain in compliance. Depending on your business, you may need a nationwide or even global network to support your sales processes. A good 3PL partner will also advise you when to make changes to your business, such as switching a product to FBA.

Wrapping up — Strengthen your eCommerce operations with FBM

Fulfillment by Merchant is a great way to manage your Amazon business needs and to differentiate yourself from other sellers. It also allows you to develop a more personal connection with your customers so you can build strong relationships and establish trust and loyalty among Amazon buyers.

With a bit of pre-planning and a solid strategy in place, FBM can be an effective way to grow your business and give you more control over your Amazon store, whether you elect to handle fulfillment on your own or with a 3PL partner to support you.

For many eCommerce professionals, a lot of time and marketing budget is spent on acquiring new customers to increase revenue. Granted, attracting new customers is important for your overall business success, but it’s equally important to convert new customers into repeat business. This channels your marketing efforts and resources into customer retention, which can actually be more profitable for your business.

According to a survey of 1,000 small businesses, more than half of annual revenues were generated from repeat customers. Additionally, those repeat customers were found to spend over two-thirds more than new customers.

Look at it this way: If you spend $25 to acquire a new customer who spends $100 one time, you’ve earned $75, and that customer has a $75 customer lifetime value with your business.

So, you spent $25 to earn $75. But if you spend another $25 to retain that customer, based on the statistics above, their next purchase may be worth $167, meaning their lifetime value has increased to $217.

We can talk all day about why return customers are critical to your business’s success. But first you need to learn how to convert customers into repeat buyers. One such strategy is employing a subscription model with auto-renewal.

What is a subscription model?

An eCommerce subscription model lets customers subscribe to products or services they need on a recurring basis. According to McKinsey & Company, 15% of online buyers have signed up for one or more subscription services, which is a lot considering that 2.14 billion people shop online today.

As a business owner, subscription eCommerce is a brilliant strategy that ensures the stability you need to scale and grow.

What is auto-replenishment?

Auto-replenishment is a type of subscription model that utilizes machine learning to help shoppers predict when they’re due to reorder products. An auto-replenishment model often recommends a timeline for replenishing an item — for example, your toothpaste — and allows the customer to set their subscription to auto-refill in X number of days, weeks, or months.

How does it work?

For consumers, auto-replenishment works as a “set and forget” method to ensure their favorite or most critical items are always well-stocked. When it comes to daily-use items they may need to refill suddenly, auto-replenishment is a great marketing and sales strategy to reduce the number of things your customers has to keep track of.

For a business, auto-replenishment helps you better manage your inventory cycles. This gives you peace of mind knowing you’ll have repeat business with your customer, increasing their lifetime value and your revenue.

Behind the scenes, auto-replenishment relies on a set of algorithms driven by machine learning. The machine captures information about how regularly customers reorder an item and then learns what the average replenishment schedules are. From there, the algorithm can recommend or suggest auto-replenishment timelines based on real-world customer behavior.

Auto-replenishment as a marketing and sales strategy

In today’s busy world, finding ways to differentiate your product that capture consumers’ attention can be challenging. An auto-replenishment model is an excellent way to position your eCommerce business to current and potential customers.

The greatest value proposition of auto-replenishment lies in the recommendations for reordering timelines and the convenience of putting that on autopilot. However, you can sweeten the deal further in your messaging and offers to entice customers to sign up for this subscription type.

Offering subscription-based discounts when you sign up for auto-replenish

When it comes to frequently used products, receiving an ongoing discount can add up to major savings for consumers. Many merchants offer discounts ranging from 15% to 20% for auto-replenishment, which allows customers to save on their preferred products without worrying about running out.

You can set your auto-replenish discount at a flat rate, or you can offer increasing discounts after multiple replenishment dates to further incentivize customers to continue the subscription.

The importance of flexibility in auto-replenishment plans

If you offer an auto-replenishment model to customers, it’s imperative you include flexibility to accommodate individual customer needs. If your data suggests the majority of your customers have to reorder toilet paper every six weeks, you might provide options to schedule auto-replenishment for every four, six, eight, or ten weeks to accommodate both large and small families.

Flexible options for auto-replenishment enable your customers to choose what’s best for them to provide a convenient and customized experience.

Examples of auto-replenishment in retail

Amazon Subscribe & Save

Amazon Subscribe & Save gives customers free standard shipping on auto-deliveries and the option to schedule deliveries while getting a discount. This service is usually for household goods and consumer packaged goods (CPGs). Eligible products can even include greater discounts after reaching a predetermined number of deliveries.

Il Makiage

Il Makiage is a makeup company that offers auto-replenishment on many of its products. Customers can choose to have their orders replenished as often as every month or as infrequently as every six months. When customers subscribe to the auto-replenishment model, they save 10% on their auto-replenish orders and an additional 20% on anything extra they add to their box at each shipment date.

Dollar Shave Club

Dollar Shave Club (DSC) could be hailed as the gold standard in auto-replenishment models for eCommerce businesses. In fact, it’s their entire business model. Like Il Makiage, DSC allows subscribers to save money when they add items to their regular auto-replenishment box, but their discounted price is always available to customers.

Meal plans and food boxes

Food subscription companies like HelloFresh, Chefs Plate, and Good Food have capitalized on the basic need to eat by offering convenient, to-your-door deliveries every week. These auto-send boxes let customers customize their weekly deliveries or cancel by a certain date; otherwise, they have to live with (and eat) the consequences if they forget. These boxes often have discounts for your first box before returning to full price for the remainder of the subscription.

Stitch Fix

Stitch Fix is a clothing subscription company with selections for men, women, and children. Users take a style quiz and sign up for regular clothing shipments based on style, fit, and price range, and shipments are constantly curated based on user feedback.

Why auto-replenishment works

It’s easy to look at auto-replenishment and think, “There’s no way it’ll work long-term,” and that’s not totally wrong. Customers will cancel their auto-replenishment subscriptions when the service isn’t great or if they no longer find it useful. But, when done right auto-replenishment works extremely well for several reasons.

Easy for customers to set and forget

Auto-replenishment allows customers to set their preferences, input their desired payment, and then leave it to the algorithm to ensure their products are shipped. “Set and forget” is a value proposition that appeals to busy consumers willing to pay for the convenience of removing another item from their to-do list.

According to McKinsey & Company, as many as 40% of customers who use subscription services will cancel within one year. However, Shopify found that replenishment business models tend to have higher long-term subscription rates — 45% of customers subscribe for at least one year. This is due in part to the nature of the products you typically see in auto-replenishment models (e.g., daily-use items versus curated subscription boxes).

“Set and forget” can also work in your favor if customers simply forget to skip or pause renewals.

You can count on repeat business

Auto-replenishment models mean you can count on repeat business month after month to help you grow your revenue and your business. This rapidly increases the ROI on acquiring those first-time customers who’ve signed up for auto-replenishment, making them more profitable.

Better manage and plan for inventory cycles

Auto-replenishment can help you better understand, manage, and plan for your inventory cycles by giving you advance insight into your upcoming month’s sales volume. Short of having a crystal ball, this is otherwise difficult to achieve.

You may even be able to turn this technology around to help YOU reorder based on your real-world auto-replenishment data so that you, too, can “set and forget.”

How to set up auto-replenishment

If you’re interested in creating an auto-replenishment model, it’s time to get cracking.

First, evaluate your product viability. If your product is oversaturated in the market, it can be difficult to enter said market. Do some research and see if there’s a need for your product and if auto-replenishment makes sense.

How to start a subscription business on Shopify

You can easily create a unique subscription model within Shopify while managing everything within the platform for additional convenience. Decide whether you want to start from scratch, build your own solution, or add a Shopify app to your store.

DIY Solutions

Shopify APIs and tools allow you to build new subscriptions directly within your Shopify Checkout. This is best for savvy merchants or teams with developers who are prepared to build from scratch. Here are some resources that might help:

• Shopify Subscription APIs
• Product Subscription Extension
• Developer documentation for migrating subscription contracts to Shopify

Shopify Apps

Set up a subscription offering easily by installing one of Shopify’s subscription management apps. Simply install the app, set the necessary parameters, and away you go. Here are just a few of the apps you can choose from:

PayWhirl Recurring Payments. Create, manage, and sell subscriptions through Shopify’s native platform.

Awtomatic Subscriptions. The Awtomatic app (previously Bundle Subscriptions) lets you add subscription options to your products and is fully integrated with Shopify’s native checkout.

Bold Subscriptions. Bold lets you customize, manage, and scale a subscription business for enterprise.

Recharge Subscriptions. Launch and manage subscriptions for your Shopify store quickly and easily.

You can see a full list of Shopify subscription apps by searching “subscription” in the Shopify app store.

Auto-replenishment best practices

With auto-replenishment models, you can easily run the risk of missing out on customer engagement when customers take advantage of the convenient “set and forget” element. To avoid this and other issues, make sure you:

Send out email reminders

Remind customers their auto-replenishment is almost on the way around a week before their scheduled ship date. This helps remind them of their order and provides the opportunity to make any necessary changes.

Use this email as a touch point, a chance to cross/upsell, and a way to let your customers adjust their subscriptions to their preference.

Offer special discounts for add-ons

In your email, highlight any special discount offers you have for add-ons to their regular subscription renewal. For example, Il Makiage and Dollar Shave Club both give customers the opportunity to add extra items to their auto-replenishment orders at reduced rates and free shipping.

Provide options to skip or pause

Life sometimes gets in the way, which means your customers may not need their monthly or quarterly auto-replenishment.

By offering scheduling flexibility, you show your customers you care while avoiding a cancellation when a customer receives an auto-replenishment they didn’t need. Remember, customers want choice. Having the ability to skip a month or pause their subscription for a set amount of time allows them to make your auto-replenishment work for them.

Make it simple to cancel subscriptions too. If your customer finds auto-replenishment isn’t the right fit for them, they shouldn’t have to jump through hoops to stop their subscription.

Thank customers for repeated business

Always demonstrate your gratitude towards your customers. Make sure you say “thank you” at every opportunity — from sign-ups to reminder emails, shipping alert notices, and in the box itself. This helps with brand recall, builds up your buyer experience, and can even inspire social shares of your brand.

Wrapping up — Use auto-replenishment for your next subscription strategy

Surprising and delighting customers with new and exciting subscription boxes and gifts has grown in popularity over the years, but don’t let it overshadow the necessities. By providing auto-replenishment on common household items and CPGs, you can make it convenient for your buyers to continuously use your products without ever running out.

Providing auto-replenishment makes it easy for shoppers, and extends loyalty for brands.

Want to start scheduling auto-replenishments? Check out how MyFBAPrep can help manage your subscription logistics.

Influencer marketing has changed the way businesses and consumers look at advertising. The advent and exponential rise of social media over the past two decades has created new opportunities and completely reshaped the landscape of direct-to-consumer (DTC) marketing.

While mass advertising is still an option, social media and, in particular, influencer marketing allows you to hone in on your audience to reach people most likely to convert to customers.

You’ve seen influencer marketing before, and in some cases, it’s possible you didn’t realize the content you were consuming was sponsored. (This has changed in recent years, with new advertising regulations requiring influencers to clearly state that they’re promoting a product as part of a business agreement.)

With the visibility of social media platforms, influencer marketing can be an innovative and cost-effective way for you to grow your business. This article will cover what influencer marketing is exactly, how to choose the right influencers to align with your brand, and how to create an influencer marketing strategy.

Influencer marketing 101

Influencer marketing encompasses much more than simply sponsoring a video, and what constitutes an influencer can be difficult to define. Let’s break it down.

What is an influencer?

An influencer is a personality or brand with a social media following and network who uses their platform to share information and influence their followers’ thoughts and actions. Influencers can be celebrities or they can become celebrities through social media. Their content affects their audience’s buying decisions; when celebrities or big influencers mention a product or wear a brand in a TikTok or Instagram video, that brand or product tends to see a spike in sales.

Of course, not all influencers are the same; they fall into various categories. Commonly, influencers are separated or ranked by their number of followers, their content type (blogger versus vlogger versus visual artist), and their level of influence. If you analyze influencers based on followers, you’ll find the following.

Mega influencers

These influencers have a huge number of followers on their social media networks, usually in the millions on a single platform. Many mega influencers previously gained their fame offline as movie stars, professional athletes, politicians, or reality TV personalities. However, some mega influencers grew their followings exclusively through their online and social media activities.

Example: Hyram Yarbro, with 4.5M followers on YouTube and 1M on Instagram.

Mega influencers are best suited for major brands, as their services can cost well into the hundreds of thousands or even millions per post, and their partnership requirements are stringently aligned to their personal brand.

It’s worth noting that there is a subcategory in mega influencers that goes to extreme numbers. These are the top of the pack in follower numbers, such as Charli D’Amelio with almost 130M followers on TikTok and 50M on Instagram.

Macro influencers

Smaller than the mega crowd, macro influencers are more accessible as influencer marketers. These folks tend to have roughly a million followers on a single social media platform, but they may also have more. Often, this group is composed of online experts who’ve amassed a following by sharing content that resonates with a wide audience. They generally have a high profile and are great at raising awareness. Because the pool of macro influencers is larger than that of mega influencers, it’s usually easier to find a partner.

Example: Ginny Di, with 300K followers on YouTube and 130K on Instagram.

However, macro influencers tend to have the highest instances of influencer fraud. This means some influencers in this category only reached their position by paying for followers, including bots and inactive accounts. Be sure to keep an eye on the engagement on their posts to work out whether they have a truly active following or not.

Micro influencers

Micro influencers are everyday people who became known for their knowledge and personality in a certain niche. They’ve usually gained a sizable following from either devotees in their niche or a group of followers in a particular region. An important thing to note about micro influencers is that, while their numbers might not be astronomical, they often have strong relationships and higher engagement with their followers.

Example: Ann Handley with 50K followers on Twitter.

The jury is out on the number of followers micro influencers have; it’s usually under 50,000 on a single social media platform, but more than 1,000. Micro influencers are a fantastic option for eCommerce brands given their accessibility and their close relationships with their audiences. They’re less expensive to work with and are often regarded as more trustworthy than celebrity endorsements.

Nano influencers

The newest type of influencer to gain recognition is the nano influencer. These people have small followings, often under 10,000 per social media platform, but they’re regarded as experts in their highly specialized fields or niches.

Example: May Zune Win with 13K followers on Instagram.

Nano influencers are sometimes more inexperienced, and have a considerably shorter reach than their other influencer counterparts. However, that doesn’t mean this group should be overlooked. Perhaps you sell or want to start selling a tailored niche product, and would be the perfect fit for their audience.

What is influencer marketing?

At the most basic level, influencer marketing is a form of social marketing that uses endorsements and/or product mentions from influencers. The reason influencer marketing works and continues to grow is the high level of trust an influencer develops with his or her following. Recommendations from them serve as social proof for your potential customers.

Influencer marketing features several content types and activities including, but not limited to the below list (either separate or as part of a combined package).

Bloggers

Blogs are everywhere and cover just about every topic imaginable, but social media bloggers and influencers — especially in the micro group — have the most authentic and active relationships with their fans and the most targeted audiences.

Successful blogs have a large and, more importantly, active readership, meaning fans hit the blog every time a new post lands.

In a blogging agreement, the influencer could mention your store or products and link to them in a blog post. Or, you might be able to guest post on the blog, which allows you to share your store or products in both the copy and your author bio.

Vloggers

This group of influencers relies heavily on video (think YouTubers, Instagrammers, and TikTokers).

Although it’s still true that “content is king,” video content specifically has taken the throne. YouTube is a longtime player in the game, and the addition of Instagram video content (stories, reels, etc.) with the overwhelming growth of TikTok proves consumers are watching more videos.

Previously, brands aligned with YouTubers, but as audiences move to shorter-form video content as offered by TikTok and Instagram, it’s time for brands and product managers to shift gears and meet consumers where they’re at.

Many video creators have loyal followers — fans who tune in to every video as they’re posted. Depending on their audience size and type of channel, a short video could have hundreds or even thousands of potential buyers’ attention.

Podcasters

Podcasts have become increasingly popular over the last few years. Audio content is attractive to audiences due to the ease and convenience of listening, as opposed to watching or reading information.

With podcasts, you have the option to sponsor or advertise on a particular podcast, or you can work with the podcast host to create unique content to promote your business. Bonus: many podcasts are filmed concurrently with the audio recording, meaning you get two pieces of content for the price of one.

Social media influencers

Social media influencers come in many shapes and sizes, from differing niches to audience sizes and even preferred platforms. One of the most common influencer platforms today is Instagram. It turns out a picture really is worth a thousand words.

Photo content is an awesome fit for most eCommerce professionals because it presents the products in an aesthetically pleasing way (and we know aesthetics sell).

A social media influencer can provide multiple posts on Instagram at a price per post or per story, or they could share plugs on their Facebook page or Twitter feed. The opportunities are vast, and your influencers may cross-promote even non-sponsored content, earning you even more exposure.

Choosing the right influencers for your business

Now that you know the types of influencers and the activities you could engage in, the next step is to choose the right influencer for your business. Finding an influencer who aligns with your brand is imperative to a successful influencer marketing strategy.

Selecting the right influencer to partner with requires careful consideration. You need to think about your budget, your goals, and your existing audience before you write up the partnership agreement. So, where to start?

Where to find influencers

Unsurprisingly, the best place to find influencers is in their domain — online. When seeking out an influencer for marketing campaigns, you have two options: take the search into your own hands, or approach an agency to assist you.

Doing your own research

Depending on the scale of your business and how much time you have, you can look for influencers on your own through a broad internet search or by digging through a particular social media platform.

Start with a quick search of influencers in your industry with a tool like SparkToro. If you sell camping supplies, look for outdoor enthusiasts who share their adventures online and cross-reference those results against your business needs.

To take the solo route, you’ll need a deep understanding of influencer marketing or be prepared to let the influencer take the reins (a risky choice) and handle all onboarding and campaign tracking alongside them.

Leveraging an agency

An influencer marketing agency is a great option for busy eCommerce professionals. Agencies like Viral Nation, Clutch, and INF Influencer Agency are experts in this type of marketing and have wide-reaching networks of influencers to draw from.

An agency will not only match you with the influencers best-suited to your business, but they can also act as a liaison throughout the campaign and help you develop KPIs and other metrics to measure.

How to approach potential influencers

The best way to approach any new relationship is to reach out in an authentic manner. If you work with an agency, they’ll handle outreach and introductions, but if you operate solo, you’ll want to make sure you’ve done your homework first.

Begin by familiarizing yourself with your potential influencer’s content. Clearly define what you like about their content and determine whether or not they’re already working with your competitors.

Then, reach out via their preferred channel. Influencers who regularly partner with brands or companies usually have contact information for business inquiries in their bios or somewhere on their websites.

Creating a tailored influencer marketing strategy

Like any strategy, there’s no “one size fits all” solution for influencer marketing. Your business has its own unique challenges and opportunities, so it’s important to consider those needs and then craft your strategy around them.

Set goals

Start by establishing goals. Are you trying to increase traffic to your site? Boost brand shares? Sell more of a particular item or category of products? Once you’ve set your goals, it’s much easier to understand the steps you need to take to achieve them.

Establish a cadence of marketing collateral

Once you’ve aligned with an influencer or influencers, you need to determine the appropriate cadence of posts (this should be ironed out before your campaign kicks off).

If you have a longer campaign, say six months, to promote a particular product, you may set a biweekly schedule of posts to go live. If your campaign is shorter, you might have two posts in a single week.

Sometimes your campaign will involve influencers engaging in activities on multiple platforms, so you could have multiple posts each week across two or more channels. Consider what cadence fits your needs and confirm a schedule with your influencer

Payment agreements

Payment agreements can vary widely based on the influencer you work with and the strategy you create, but it’s common to have one of the following payment agreements in place.

Packaged campaign pricing

A packaged pricing agreement means you pay one lump sum for an agreed-upon deliverable from your partnered influencer. Often, the package includes a free product plus a fee in exchange for the deliverables laid out in your agreement.

So, over the course of a month, you might pay your influencer a total of $X for six Instagram posts, one story two minutes in length, and one blog post as part of your campaign.

Per-post payment

Some influencers and eCommerce professionals prefer to work per post or ad hoc. In these cases, each post will have a unique fee and may not be a part of a larger campaign. Per-post payments are common when working with multiple influencers, especially as you test out different audiences or platforms to find the right fit.

Payment through tracking

Ever see an Instagram post where the influencer tells you to “use coupon code MYNAME20 to save 20% off your order”? That coupon code is trackable and demonstrates the customer who used that code was directed to your store by the influencer. In these scenarios, the influencer often receives a portion of the sale as payment for their post or mention.

Affiliate links are another common tracking method to capture the sales an influencer drives. With affiliate links, you can track customers and understand their behavior. You can customize them to an individual post or larger campaign to track performance. Tracked payments on referred sales are often paid out once a particular threshold is hit.

Product or service as payment

Product or service as payment is a common agreement between eCommerce professionals and influencers, though the product or service may not hold enough value to influencers to be a viable plan on its own.

Common elements of an influencer marketing strategy

Several common elements pop up in most (if not all) influencer marketing strategies. These best practices will help ensure your campaigns are measurable, successful, and that all parties are held accountable for their respective duties.

Affiliate links

Affiliate links are unique links created for influencers to share when promoting your brand or products. They can be tracked to measure campaign success, from understanding how traffic increases during a campaign to capturing conversions and recording payments (when applicable).

Affiliate links are used in blog posts, author bios, social captions, and video descriptions to push potential buyers to your site.

Agreements + activations

Agreements and activations are the two most important documents you’ll share with an influencer when kicking off your campaign.

The agreement is your legal document outlining the contract between you and the influencer with whom you’ve partnered. It includes all relevant information about pricing, payment, campaign deliverables, timelines, and any other important details such as targeting and more.

An activation is a document that details everything your selected influencer requires to do their job. This includes, but is not limited to:

• Links (including affiliate links)
• Hashtags
• Business name or product name
• List of items to promote
• Visuals such as logos or photos you want them to use

Social media guidelines

Clearly outline social media guidelines for your influencers to adhere to during the campaign. For example, if you prefer to keep it PG, your guidelines may include no usage of profanity, nudity, or instances of violence.

These guidelines can also include the type of language and even art direction for the style of photography or videography you’d like to see, or platforms you’d like to use (or avoid).

Product as payment

As previously mentioned, product as payment is commonplace in influencer marketing. While it may not replace a monetary fee, a free product in exchange for deliverables is the bare-minimum requirement for an influencer to use, review, and share your product with their followers. If you opt for this route, you could send the product to several influencers to test for free as part of your initial ask.

Campaign tracking and measurement

A campaign won’t bring a full return on investment if you don’t track and measure its success. You can manage your campaign tracking in a dashboard through your influencer marketing agency, if you use one, or by having the influencer share his or her analytics with you on a regular basis. If you have special KPIs you’re trying to meet, the influencer should work with you to make sure you hit those targets.

Wrapping up — Use and scale influencer marketing alongside your brand

Influencer marketing is a great way to increase your brand visibility and reach new, targeted audiences through compelling content. With thousands of influencers now impacting buying decisions en masse, it’s a perfect time to leverage the power of social proof.

Select an influencer who fits your brand to promote and elevate your image, increase sales, and expand your customer base onto new platforms.