Unboxing Loot Crate: How a Subscription Box Became a Leader in Geek Culture

Unboxing Loot Crate: How a Subscription Box Became a Leader in Geek Culture

No longer just the obscure interests of a passionate few, the objects of obsession found within geek culture—Harry Potter, Star Wars, Pokemon, Halo, Marvel, among other worlds—have become wholly embraced by the mainstream.

It’s hard to ignore the trends that are feeding the growth of geek culture: from the spread of Japanese anime in the west to the comic book adaptations that dominate the list of last year’s top 10 highest grossing movies, to a global gaming market with an estimated worth of $99.6 billion.

It’s become an industry fuelled by fandom where fans attend conventions “cosplaying” as their favorite characters, proudly rock t-shirts that reference comic book heroes, and line their shelves with Funko figures and video game collectibles.

In the middle of it all is a company called Loot Crate: a subscription service that ships a monthly “mystery box” of products that have been curated for geeks and by geeks.

Loot Crate: The Origin Story

Loot Crate, like other subscription box businesses, focuses on curating products from across these different worlds and putting together an enjoyable unboxing experience for their customers or “Looters”.

The company was founded in 2012 around a simple idea: “Putting the awesomeness of Comic-Con in a box,” according to Hannah Arevalo, Director of Support at Loot Crate.

“Our co-founders Chris Davis and Matthew Arevalo met at an L.A startup weekend event where they conceived of and built the entire company in 48 hours. While most other team members went back to their regular jobs, Chris and Matthew decided to keep going with Loot Crate and dedicate their time and energy into fully growing this new business.”

Loot Crate has now grown to serve over 650,000 Looters with new monthly themes and partnerships that help it expand its reach to fans of different universes—within gaming, anime, comic books, and more—who all have one thing in common: geeking out over their favorite worlds.

loot crate
Marvel’s Deadpool is just one of many fan favorites who make an appearance in Loot Crate’s mystery boxes.

“From The Wizarding World of Harry Potter, South Park, Minecraft, Call of Duty, Fallout 4 and the WWE, we cater to some of the world’s most demanding fans and do our best to show them new and exciting ways to express their fandom,” Hannah says.

How Loot Crate Curates Products

With so many fans of so many different worlds to serve, Loot Crate’s challenge is making the unboxing experience as relevant and enjoyable as possible for as many subscribers as possible every month.

These subscribers can expect anything from comic books, t-shirts, candy, figurines, trinkets, stickers and more when their Loot Crate arrives—with premium goodies if they choose the Loot Crate DX offering.

By working with licensors, Loot Crate can also create exclusive products that are sold through their various crate lines and their own Shopify-powered ecommerce site, Loot Vault.

“The curation process is a huge part of what we do at Loot Crate. There are so many opportunities for us to curate some of the most awesome and exclusive items you will find in pop culture today,” Hannah explains.

what's in a loot crate
With a growing number of crate lines, fans can opt into the ones that best cater to their interests.

“Many of the ideas come from our employees. We have an amazing group of people, who are all fans of pop culture and offer invaluable feedback on the best items to include. Working directly with the brands and creators also allows us the opportunity to create and manufacture completely exclusive products that have never been available before.”

Keeping their finger on the pulse of geek culture is important for aligning their future crates with current trends—for example, the increasing interest in diversity among superheroes.

Hannah elaborates: “With the upcoming Wonder Woman film to 2016’s big hit Rogue One, female leads are driving huge crowds to the theaters. The rest of pop culture is standing up and taking notice too, from Blizzard’s Overwatch series to some of our favorite comics and tv shows—more diverse actors and storylines focused on underrepresented audiences will continue to be a wellspring of creative content for fans to enjoy everywhere.”

Choosing New Monthly Themes

Many of the worlds of fiction that fans have grown to love are frequently fleshed out further with new movies, video games, comic books, and even fan-generated content.

World building is central to geek culture in all of its forms, and so it’s important for Loot Crate to keep up with the current events of each world—both real and fictional—and incorporate them into the unboxing experience.

“We pride ourselves on making sure the latest titles/IPs are included in our crates and their most recent storylines are reflected,” Hannah says.

“All of these factors come together to inspire our themes for the month. Looters love the mystery of each month’s Loot Crate so the themes give them a peek into what’s coming without ruining the surprise.”

The themes give them a peek into what’s coming without ruining the surprise.

Loot Crate also offers “partner crates” for superfans of specific properties, from Harry Potter to Hello Kitty, where they team up with brands to offer official, exclusive items.

“We spend a large amount of time doing research and consulting with our partners to make sure we can bring something truly unique to the most passionate fans, but also the most sought after items around an upcoming event or release,” Hannah said when asked about the nature of these partnerships.

“Our partner crates are really special because of this. We love being able to dedicate a whole crate to a particular brand or theme and see the amazing products we can find to make the experience one you cannot get anywhere else.”

Introducing Loot Vault: A Traditional Ecommerce Experience

Part of what fuels consumerism in geek culture is the desire to collect and own items from your favorite worlds.

And part of what makes subscription boxes work is the fear of missing out on exclusive goodies each month.

Loot Crate understands this, and that’s why they’ve built the Loot Vault: a Shopify store, which Hannah co-leads, that has become an extension of the Loot Crate brand.

the loot vault
The Loot Vault lets Looters buy one-off items to complete their collections, as well as indulge in past crates.

“Loot Vault is different because it follows a more traditional e-commerce experience of a single, closed transaction, while Loot Crate is a subscription service with recurring shipments,” Hannah says about the difference between these two e-commerce experiences.

“The idea came about by a desire from our community to have access to even more products that we sourced or created, that might have not made it into a crate, as well as some of our past items that they might have missed.”

Loot Vault launched in October of 2016 and has already completed more than 50,000 orders (as of Dec 15) with a 4.9% conversion rate, proving to be a smart way to sell their products outside of their main subscription box offering.

Marketing to Geeks? Use the Network Effect

No longer as stigmatized as it once was, “geeking out” is simply the expression of fandom.

That self-expression is how geeks earn their membership into this culture, and some of Loot Crate’s most impactful marketing tactics harness this energy to tap into the inner circles, networks, and audiences of Looters to reach geeks with shared interests.

Referral and Rewards Programs

On Loot Crate’s website, a “Give 5, Get 5” offer lets existing Looters earn a credit for every additional Looter they bring on through their referral program.

“As our community is one that shares frequently, a program that incentivized people to do what they already did, was a no-brainer for us”, Hannah says. “It also encourages what any commerce platform always aims for: repeat business.”

With a subscription model, this referral program (powered by Friend Buy on Loot Crate and Beans on the Loot Vault Shopify store) is an especially clever way of acquiring customers and growing their monthly recurring revenue.

loot crate referral program
Referral links can be shared one-to-one or broadcasted on social networks.

Unboxing Videos and User Generated Content

The unboxing experience is centered around the anticipation of opening up a recently delivered package and going through its contents one at a time.

This hallmark of modern day consumerism is actually part of the value proposition for subscription boxes such as Loot Crate.

“As a mystery subscription service, we knew it would be important to offer a way for our community to celebrate together each month when their crates arrive. For many, the unboxing is the most important part of the month and can be a very sacred experience for them,” Hannah explains.

And these customers don’t undergo the monthly unboxing experience in private either.

“Looters are able to connect with other fans of these crates even from across the world through social media and community as they all unbox together. This has been a tradition of our brand since the very earliest of days”.

loot crate unboxing
The Loot Crate community regularly shares their unboxing experience on Instagram, Tumblr, YouTube, and other social platforms.

Working with Influencers

There are a wide variety of different types of influencers across geek culture creating all kinds of content from reaction videos to reviews to “Let’s Play” videos for almost every video game out there.

There’s no shortage of influencers for geek-focused brands to work with, and Loot Crate features theirs prominently on their website, each with an exclusive discount code for their respective audiences.

“We pride ourselves on supporting the creative communities on Youtube and Twitch through our partner programs—from working with Pewdiepie to influencers on a local/genre level, we look for inspiring creators to help us tell the story of each month’s crate.”

Logistical Lessons From a Successful Subscription Box

As you can imagine, the logistics of a mystery box subscription like Loot Crate are more complicated than a traditional ecommerce operation.

Hannah says that getting these crates out every month is no small task: “It takes an incredible team of logistical ninjas to make sure everything gets out in time and into the hands of our Looters.”

In the early days, the team could hand-stamp their logo onto each crate, but as they have grown to over 13 recurring product lines (with more to come), they have had to constantly push their operations team to innovate their processes to keep up with the demand.

Scaling wasn’t pretty at first, but Hannah says the key was to make decisions with a “customer first mindset” because what’s in the best interest of the customer is usually what’s in the best interest of your business.

Redefining What It Means to Be a “Geek”

“Being a geek” means something different today.

It’s become an inseparable part of pop culture that spans across a variety of media, opening up to accommodate casual geeks—not just the superfans—as they indulge in the ever-growing worlds of their favorite stories and characters.

It’s a space that’s buzzing with opportunities for geek-centric brands like Loot Crate, and one that’s likely to be as timeless as the popular titles it’s built upon.

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The 5 Minute Guide to Facebook’s New ‘Time-On-Site’ Targeting Options

Using Facebook’s advertising platform, you can run ads that target people who have interacted with your business already. For example, customers and website visitors. When you create a group of website visitors or customers to target on Facebook, it’s called a Custom Audience.

Earlier this year, Facebook updated its Custom Audience feature to help brands create Custom Audiences based on the amount of time visitors spend on their websites, and the days they visited. These audiences can be created from in the Audiences tool in Ads Manager or directly within ad creation.

Targeting someone based on the amount of time spent on your website is another powerful tool for creating targeted ads. Let’s discuss how to set these audiences up and the best ways to use them to optimize your ads.

How to Set Up Time-on-Site Audiences

Before we start exploring tactics, it’s important to set up a Custom Audience based on the time users spent on your website. Head to the Audiences section of your Ads Manager.

Click on Create Audience and select Custom Audience.

Screenshot of creating a Website Custom Audience in Facebook

From the list of options select Website traffic.

Screenshot of selecting website traffic for a Custom Audience source in Facebook

Click on the Website Traffic drop-down list and at the bottom you’ll see the option to pick “Based on time spent on your website.”

You’ll now see the drop-down option to target the top 5%, 10%, or 25% of active users on your website in the last 180 days:

Screenshot of selecting time-on-site for a Website Custom Audience on Facebook

Give your audience a name and click save.

Let’s say you selected the top 10% of website visitors to segment over a 30-day period. If over the last 30 days, roughly 100,000 people visited your website, the most active 10% are placed in a Custom Audience of roughly 10,000 visitors.

How to Use Time-on-Site Audiences to Optimize Your Ad Campaigns

Now that you know how to set these audiences up, let’s delve into the best ways to use them.

1. Use Audience Insights to Discover What Separates Browsers From Buyers

Knowledge is power, so use Facebook’s Audience Insights tool to learn more about who your browsers are and who your buyers are. Audience Insights will show you data about your audience such as demographics, income, and interest information.

Here’s how to use it.

First, create two Custom Audiences: one made up of everyone who has purchased from you (you can upload their email addresses) and one via the time-on-site audience feature. For the time-on-site audience, you can use any of the three settings, but we’d recommend using Top 25%.

Now, check the Audience Insights data for the two audiences. The data may initially look similar because people who have purchased from you are more likely to spend more time on your website. The key is to look for the differences.

For example, the time-on-site audience might have a pretty even split between men and women, while the purchasing audience has a 70-30 split. That could be a sign at that your product appeals for to men and you should adjust you targeting accordingly. Or, if you want to increase the number of women that buy you product, you could optimize your website to appeal more to women so that more of them checkout.

2. Narrow Your Existing Retargeting Audiences

Retargeting audiences are great, but they’re not perfect. A broad retargeting audience will group everyone who has been to your website together—whether they came to your website once and bounced off immediately or they come every day. But trying to make them more effective by specifying certain pages is arduous and difficult to scale.

Time-on-site audiences make this issue a thing of the past. All you need to do is change the audience targeting on your retargeting campaigns from targeting all website traffic within a specific time period to one of the new time-on-site audiences. Just make sure to continue excluding purchasers.

3. Test Segmented Time-on-Site Retargeting Audiences With Different Messaging

The amount of time someone spends on your site is often a good indicator of where they are in the process of making a purchase. Someone new to your brand will likely spend less time on your website, while someone who knows your brand a bit better will likely spend more time on your website.

Users at different stages of the buyer’s journey will also respond positively to different messaging. Someone earlier in the journey likely needs more information or convincing, so branding messages, videos, and informative content fit well. Someone later in the journey might just need an extra nudge to convince him or her to make a purchase, so a well-timed offer or discount is the right move.

Setting this up in Facebook is easy. Create separate campaigns for each of the two audiences and create ads with the unique messaging and creative you want to use for each group. The key condition is the audience targeting.

For the audience earlier in the buyer’s journey, set the audience targeting to EXCLUDE anyone who is in the top 25% of users for time-on-site in a given time period. For the audience later in the buyer’s journey, set the audience targeting to INCLUDE the top 5%, 10%, or 25% of visitors for time-on-site. You can also test this to see what works best for you.

4. Create Lookalike Audiences Based on Your Time-on-Site Audiences

Building lookalike audiences of high-quality users is the cornerstone of a good prospecting strategy on Facebook. Finding the best lookalike audiences involves testing to see which gets the best balance of cost per acquisition (CPA) and and ability to scale.

Depending on how much data you have, or what that data says, the audiences most closely reflecting your “ideal customer” may not end up producing the best lookalike audiences…that’s why it’s important to test!

A time-on-site audience are great for building lookalike audiences off of. If you’re looking for high-value prospects, how could you not include the people who spend the most time on your site? With this feature now available, the lookalike audiences I recommend every ecommerce business should start with are:

  • People who have purchased
  • People who have purchase three or more times in the last 12 months
  • People in the top 5%, 10%, or 25% time-on-site audience

Use these lookalike audiences to run campaigns geared towards attracting new people to your brand and bringing them into your marketing funnel. When you’ve tested your lookalike audiences and want to further lower the CPA, you should move to step 5.

5. Layer Interest and Demographic Targeting on Top of Your Time-on-Site Lookalike Audiences

Now that you’ve built lookalike audiences off of your time-on-site audiences, you can use interest and demographic filters to focus them even more. This tactic isn’t exclusive to time-on-site-based audiences—it’s useful for all kinds of lookalike audiences. Filtering lookalike audiences with other factors makes them less broad, resulting in a lower cost per acquisition.

When you do this, you are telling Facebook “I don’t want to target everyone in this Lookalike Audience—just the people who also match these other characteristics.”

You can, of course, do this from the start, but it’s generally better to figure out if a lookalike audience is working at all before refining it. Basic factors, like age or gender, however, can always be used from the beginning if your products are age or gender specific.

So, which of Facebook’s available data points should you select?

The best ones will either show a demonstrated interest or need in the products you sell or match data that you have on your existing buyer profile. These can include:

  • Interest in your product’s topic or category
    • For example, if you sell a video game accessory, target only people interested in video games
  •  Annual income
    • For example, if your product has a higher-than-average price point (or is considered a “premium” option in its category), restrict the audience to only individuals in higher income brackets
  • Interest in a subject you’re going to feature in certain ad campaigns
    • For example, you sell a sports nutrition product and market to four different types of athletes: runners, cyclists, weightlifters, and swimmers. If you want to create an ad campaign featuring content related to running, restrict the audience targeting to only show the ads to members of the lookalike audience who are also interested in running.

That’s it! Using these five tactics to explain time-on-site targeting options will put you on a great path. How do you plan on using this new feature?

Social Entrepreneurship: How to Harness Business to Make the World a Better Place

Social Entrepreneurship: How to Harness Business to Make the World a Better Place

Some people start businesses to improve the quality of their life, others seek to work for themselves, and some simply see an opportunity in the market that they can’t resist.

But sometimes the thing that tickles the entrepreneurial spirit in you is the desire to use business as a means of creating positive change.

This is called “social entrepreneurship”, and it’s an approach to business that’s gaining in popularity as globalization brings conversations about sustainability and international development to a global stage, and more people ask themselves, “What can I do for the world today?”

Social entrepreneurship involves starting mission-based social enterprises that dedicate some or even all of their profits toward furthering a cause—giving their customers a purpose behind every purchase.

What is a Social Enterprise?

what is a social enterprise

“Social entrepreneurship” has a very broad definition that can arguably include non-profit organizations like Doctors Without Borders, which rely almost exclusively on donations and grants, and even for-profit companies like Tesla that put their clean energy products front and center.

A social enterprise is a type of business where the bottom line and success metrics are measured in more than just profits. Instead, social enterprises typically measure success based on a triple bottom line:

  • People: The social impact of your business, and your ability to change lives and develop a community in a sustainable way.
  • Planet: Your environmental impact; how you contribute to a sustainable planet or reduce the carbon footprint (CO2 emissions) of your business and customers.
  • Profit: Like traditional businesses, they need to make make money in order to sustain themselves, pay workers and grow as an enterprise.

Social Entrepreneurship is about harnessing commerce for a cause.

of the challenges to succeeding in social entrepreneurship is that it’s easy to measure profit (did you make money, or did you not make money?), but it’s not as easy to measure your impact on people or the planet and communicate it to others.

Social entrepreneurs adopt a business model that puts their mission at the center, and are held accountable to their customers and stakeholders based on their proposed impact.

The Benefits of Building a Social Enterprise

For today’s consumers and businesses, social responsibility is a growing priority as concerns about climate change, international development, and supply chain ethics become a more prominent topic of international discussion.

In a survey by Social Enterprise UK, 1 in 3 people said they feel ashamed about buying from socially irresponsible businesses. In another study, 91% of global consumers expected companies to operate responsibly, and address social and environmental issues

This reflects a shift in consumer awareness about the impact of their purchase decisions. Not only are businesses being held to a higher standard, but many consumers are holding themselves to a higher standard as well.

So while social enterprises, by definition, must dedicate a portion of their profits to the impact they want to make, they do enjoy the following benefits that help them succeed:

  • Mission-based branding: A company story with a cause at its core makes consumers feel good about every purchase they make from you.
  • Partnership opportunities: A social enterprise, because of their mission-based motivations, can partner with other non-profit organizations and for-profit companies to leverage existing audiences and established reputations to create a presence in their market. “In kind” resources and discounts are not uncommon for social enterprises.
  • Press coverage: Publications and blogs love to cover social enterprises and their impact, helping them to evangelize their efforts and share their impact.
  • Certifications and support systems: Social enterprises can be eligible for grants, “impact investing” opportunities that focus on job creation and sustainability, and special certifications such as a Benefit Corporation status that make it easier to establish credibility, commit to transparency, and attract customers, employees, volunteers, and investors.

For the sake of this piece, we’ll look at what it takes to create a sustainable for-profit social enterprise. And that starts, as most businesses do, with figuring out what you want to sell.

Finding a Product to Sell and a Mission to Lead

The mission comes first for social entrepreneurs, but that doesn’t eclipse the importance of having a quality product to sell. After all, when all is said and done, a for-profit social enterprise needs to make money to survive just like any other business.

But there’s a pattern amongst successful social enterprises of establishing a good “product-cause fit” that aligns their mission with what they sell.

LSTN Sound Co. for example, sells premium headphones where a portion of profit goes toward the Starkey Hearing Foundation to restore hearing to people around the world.

LSTN social enterprise

Cotopaxi makes and sells outdoor gear for adventurers and travellers, dedicating 2% of total revenue to provide grants to specific non-profits that seek to alleviate poverty in different parts of the world.

cotopaxi social entrepreneurship

Love Your Melon sells beanies and hats and, on top of donating 50% of profits to pediatric cancer research and supporting patients, also has a Campus Crew Program that mobilizes students across the United States to help with their mission.

love your melon social entrepreneurship

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These are only a handful of many examples of ecommerce-based social enterprises that do a great job of not only tying a sense of purpose to their products, but using traditional business strategies, such as event marketing and giveaways, to promote their mission.

Defining Your Mission and Illustrating Your Impact

For social enterprises, their mission is a competitive advantage that can help them stand out in a crowded market—if they can communicate their motivation and the impact they can make.

Many social enterprises adopt a model where they donate a portion of profits to a cause, but that’s not the only way to position your company as a social enterprise.

It’s not just saying, ‘Hey, we have a social mission as an organization, and X percent of our sales goes to nonprofit X, Y,  and Z.’ I think it needs to be deeper and more authentic than that.

There are also social enterprises that focus on:

  • Creating jobs within the communities they care about, such as hiring local ex-convicts or ethically outsourcing production to communities in need of fair work and career development opportunities.
  • Reducing their carbon footprint by planting trees or going out of their way to reduce carbon emissions throughout their entire supply chain and educating customers about it.
  • Hosting workshops and “people development” initiatives to teach skills and empower people to build better lives for themselves and their communities.
  • Advocating for diversity and inclusion on behalf of underrepresented groups and becoming an engine of inspiration, such as Goldie Blox does by making toys to expose young girls to the joys of engineering.

Transparency and sustainable impact are essential for a successful social enterprise. And these things are easier to achieve if your cause is close to your heart and you choose an impact that you can measure.

“Integrity is doing the right thing, even when no one is watching,” in the words of C.S Lewis.

Transparency is about visibly demonstrating your integrity and holding yourself accountable to your mission and the people who support it.

Depending on your mission, you can directly implement your plans for change as a social entrepreneur and expand your contributions as you grow. But if you choose to partner with non-profit organizations (NPOs) to help execute the “social” part of your social enterprise (as many do), be sure to do your homework before you reach out and ask questions like:

  • What am I ultimately giving back to?
  • How will my contributions actually be used and what are the organization’s operating costs?
  • How does the organization measure its success?
  • Is their impact sustainable, or will it only end up doing more harm in the long run?
  • Does this organization have an ethical history as a non-profit?

This is all part of your founding story—the tale of why you started your business—and will likely come up again and again in your elevator pitch, About Page, PR efforts and more. So refine it with your mission in mind and your action plan for creating change.

Funding Your Social Enterprise

Social enterprises are accountable to the cause that they support, and that means automatically setting aside a portion of future revenue to invest in their impact.

Social entrepreneurs often have to be creative with how they raise money, and that’s why crowdfunding is a popular option.

Crowdfunding websites such as Kickstarter can not only help you raise the money you need to get your idea off the ground, but get your mission out there in a community that exists on the premise of supporting projects and causes they believe in. Learn more about running a successful crowdfunding campaign in The Ultimate Guide to Crowdfunding.

goldie blox cause-driven kickstarter
Goldie Blox’s Kickstarter campaign exceeded its funding goal by a landslide and helped launch the successful business that it is today.

There are also a growing number of grants that you can apply to for social enterprises that meet specific requirements, and a new trend of “impact investing“, where the return on investment expected isn’t just financial, but includes social and environmental impact as well.

Marketing Your Mission

What works when it comes to marketing can vary from business to business, but the need for transparency and the “for-benefit” position that social enterprises adopt make certain marketing strategies especially effective at generating awareness.

After all, you’re marketing your mission, not just your business.

Content Marketing

Digital media and the internet enable storytelling at a scale that wasn’t possible before.

From shooting videos to sharing photos on social media, social enterprises can leverage content to share real stories of the impact they’re making and provide proof that every customer’s purchase went toward doing some good in the world.

You can visit the affected community and film a documentary-style video. Or you can create an infographic for a data-based illustration of your impact or why your vision of change is needed.

There are ample opportunities for a social enterprise to spread its mission and tell its stories with content.

 

Events

Since NPOs often host events for fundraising and other initiatives, social enterprises can partner on or sponsor the causes that relate to their mission.

Whereas this would be deemed a marketing expense for traditional businesses, for a social enterprise it can double as an investment in their cause.

Le

With a feel-good story and a carefully crafted pitch, a social enterprise can win media mentions from bloggers and publications that are constantly on the lookout for something interesting to cover for their audiences.

Since there’s a purpose behind your company, there’s usually a lot more meat to the story by default than there might be for a traditional business.

 

Social Media

Purchasing isn’t the only way for people to support your mission. They can donate their voices online too.

According to an analysis by CoSchedule on why people share things online, 84% used social sharing as a way to support causes or issues they care about.

As long as you integrate your mission into your marketing, you can expect your audience to help you spread the word.

You can even amplify your message by starting a Thunderclap—setting a deadline to collect tweets, Facebook shares, and Tumblr posts that will go out all at once.

 

thunderclap social cause
Thunderclap offers a great way to mobilize your social media following to contribute to a cause or campaign you care about.

The Rise of For-Benefit Companies

Social entrepreneurship isn’t the only way a business can be for-benefit and not just for-profit.

Many companies are owning their social responsibility based on a growing belief that those with the power to do so can and should try to make the world a better place.

Our connected world has brought about a new era of awareness, where we can find problems to solve and lives to improve across the street or across the world if we choose.

People from all over are making the decision to make change in whatever way they can, whether it’s by being more conscious of what they buy as consumers, or building an engine for social and environmental good by becoming entrepreneurs.

The Pros and Cons of Selling on Amazon and eBay

The Pros and Cons of Selling on Amazon and eBay

At first glance, online marketplaces like Amazon and eBay seem to be a creation of mutual benefit. Ecommerce store owners gain increased exposure for their products, and the marketplaces gain an expanded product range without having to increase inventory.

On closer inspection, the mutual benefits remain, but the reality is more nuanced. Should you expand your presence beyond your online store and start selling your products on Amazon and eBay?

The answer is… it depends. A marketplace strategy may be a boon for some retailers and a bust for others. There are a lot of variables that need to be taken into consideration, including the type of products you sell, the intensity of competition in your category, marketplace fees and restrictions, and so on.

There are, however, some pros and cons that apply across the board. In this post, we’ll explore those pros and cons so you can make the decision of whether or not to sell on marketplaces well-informed of the upsides and the downsides.

Note: Thinking about selling on Amazon? Eligible Shopify merchants can now list their products on Amazon.com by adding the Amazon sales channel.

The Pros of Selling on Amazon and eBay

1. Increase Sales From a High Traffic Channel

The chief draw of selling on marketplaces such as Amazon and eBay is the scale of their online presence. Amazon alone draws nearly 184 million visitors a month—that’s a heck of a lot of eyeballs! And those eyeballs can translate into higher sales volumes.

According to an Amazon executive, sellers report an average 50% increase in sales when they join Amazon Marketplace.

2. Acquire New Customers

Nobody visits Amazon or eBay searching for your store. But they may be searching for—and discover—your products. Products they may not have discovered otherwise, or that they may have purchased from a competitor.

Once you’ve got a customer in the door, even if it is through a marketplace, you’ve got a chance to win repeat business through excellent service and fulfillment. This is especially the case if you’re selling products in a category that encourages frequent, repeat purchases, such as hobby supplies or fishing gear.

3. Many People Prefer Shopping Via Marketplaces

Marketplaces are all about strength in numbers. This is as true for online marketplaces as it is for real world examples like farmer’s markets, shopping malls, and food trailer parks.

The variety and all-in-one aspect of the marketplace can draw in lots of customers who prefer that kind of shopping experience. Online marketplaces also bring the additional layer of single-stream checkout and fulfillment support in order to create a seamless experience for buyers.

Cons of Selling on Amazon & eBay

While there are some significant upsides to selling on marketplaces, there are also some drawbacks that need to be considered.

1. Marketplace Fees

Setting up shop on a marketplace can potentially supercharge your sales, but it also exposes you to another cost center: marketplace fees.

Most marketplace fees are deducted as a percentage of each sale and can vary from site to site and even category to category.

In highly commoditized, low-margin categories, the numbers may just not add up.

Before selling your products on a marketplace, you’ll want to make sure you have a good sense of your margins and a firm understanding of the marketplace’s fee structure.

2. Limited Control

While the marketplace infrastructure has many advantages, it’s important to remember that it can cut both ways. Marketplaces don’t exist to help you, but to help themselves. They want the focus to be on the products, not the sellers. And that means they might restrict the degree to which you can brand your presence, communicate with customers, dictate what items you can and cannot sell, and so on.

Additionally, there’s nothing to stop marketplace owners—in the case of Amazon, Sears, and so on—from going around third-party sellers, identifying popular products, and stocking them themselves.

3. Keeping Inventory in Sync

A marketplace is essentially a second point of sale. And one that sometimes can’t be configured to talk to your shopping cart. In effect, both draw down the same inventory but don’t sync with one another, making it challenging to understand your stock levels without lots of manual reconciliation.

Note: Eligible Shopify merchants can now list products on Amazon and sync their inventory automatically using the Amazon sales channel.

How to Choose a Marketplace

As you weigh the pros and cons of selling on a marketplace, it’s also worthwhile to consider which marketplace you would join.

The tempting answer is “all of them!”, but each marketplace has its own system, its own processes and limitations and quirks. Learning to navigate those can take time you probably don’t have, so it’s best to stick to one or two marketplaces unless you know you can support more.

Two of the largest and most well-known marketplaces are Amazon and eBay.

Amazon

Amazon’s Marketplace takes the sharper retail tack, and as a retailer itself Amazon provides tools to help third-party sellers become part of a seamless shopping experience for consumers.

Some things to consider when selling on Amazon include:

  • Fulfillment by Amazon, which involves sending your inventory in bulk to Amazon and letting them handle shipping and fulfillment.
  • Amazon Prime membership, which incentivizes shoppers with free 2-day shipping, along with a reputation for fast and reliable order fulfillment.
  • Built-in comparison shopping on Amazon (for better or for worse) pits you against other sellers.
  • There is usually a monthly fee for listing your products on Amazon; referral and other fees are charged upon making a sale and vary depending on your product category (a 15% commission for most categories).

Be sure to check out the fees for selling on Amazon and factor that into your margins when you consider selling in their marketplace.

eBay

eBay, on the other hand, is essentially a massive marketplace. Where Amazon focuses on the Amazon shopping experience, eBay offers seller tools and features that make it easier for you to feature your brand in an eBay store.

Consider the following before you decide to sell on eBay:

  • eBay is still mostly considered an online auction house that lets you put items up for auction to the highest bidder, which will attract many shoppers who are looking for used, unique, or hard-to-find items.
  • You will need to figure out shipping as eBay offers far less in the way of fulfillment services (though they have tried to enter the game with their Global Shipping Program).
  • There is an insertion fee per listing, per category, but sellers get a fixed amount of “free listings” per month depending on their eBay account type. However, there are also Advanced Listing options that you can pay for to spruce up your listing.

Be sure to check out the fees for listing and selling on eBay if you’re considering selling here.

Final Verdict

Between Amazon and eBay, when it comes to marketplaces to sell on, Amazon seems to be the clear winner with a larger user base and services that attract both sellers and buyers.

Keep in mind that selling through your own store doesn’t mean you can’t also sell your products through a marketplace as well to reap the benefits of both, nor does selling in one marketplace mean you can’t also sell in another.

Many successful merchants do just that—”owning” their business and brand online, while also gaining the exposure and sales from the large volume of traffic found on online marketplaces.

10 Tactics for Sticking to Your Small Business Resolutions

Hello treadmill, it’s been a while.

The resolution-crazy masses are swarming the CrossFit gyms, and kale sales are through the roof. It’s January: the official month of good intentions.

Resolutions aren’t just for your thighs, though. For entrepreneurs, a new year can be just the incentive you need to give your business a refresh. What missteps did you take in 2016? What can you learn from them? Use the calendar reboot as an opportunity to start over and get things right in 2017.

Statistically speaking, however, you’re going to fail. Whether your resolution is to become data literate, increase sales, or achieve a healthy work-life balance, you’re likely to abandon your goals if you don’t have a strategy.

We’ve compiled a list of 10 tactics to help your business resolutions stay fit and active.

Let’s do this.

1. Define Success

Make your resolutions measurable and meaningful. “Run a pop-up shop” might be on your list for 2016, but how can you gauge success? A lemonade stand on your front yard technically qualifies, but I’m guessing that’s not what you meant. Consider revising your wording by adding measurable specifics: “Run a X-week pop-up shop by X and sell X”.

2. Break it Up

Digest resolutions more easily by slicing big goals into bite-sized pieces. If your resolution is to quit your day job and start a business in 2016, convert it into smaller steps. Maybe January’s goal is to establish a budget, source a product, or set up the basics of your online store. Each month is broken up into manageable (but scary, ambitious) tasks that culminate in your December resignation letter.

3. Write it Down

I’m a pen and paper gal myself when it comes to lists; my iPhone has yet to replicate the satisfaction of striking out a completed task. For you, perhaps the whiteboard is your medium, or maybe Google calendar reminders would do the trick. There are several excellent task apps, too, which leads me to #4.

4. Use Apps to Stay on Track

Mint for money, MyFitnessPal or CARROT Fit for your butt, Any.DO for lists, Zapier for cloning yourself, Trello for tracking and planning, Rescue Time for focus and productivity, Pomodoro Timer for procrastination. The list is endless.

Check out the Shopify App Store for even more tools to help with your business. What are your favorites?

5. Make it a Habit

Bad habits are hard to break, and good ones can be just as difficult to form. For every person and habit, the length of time and steps needed can vary greatly. If your resolution is to stay on top of your expenses, success may rely on some habit-forming. Perhaps consider adding it to your morning routine, setting reminders, or employing the help of an app like Habitlist or a tool like Pavlok.

“Motivation is interwoven with the goals you make and the habits you plan to form in order to achieve them.” – Gregory Ciotti 

6. Crowdsource your Motivation

There’s no ‘i’ in team! The gym-buddy concept can be applied to any resolution. Getting others involved in your process adds a level of accountability and provides extra inspiration when your own has run dry. Try getting a mentor, joining an online community of entrepreneurs, or using an app like Stickk.

7. Stay Energized

Your personal resolutions can support those related to your business. If you’ve added “go to the gym” to your list for 2016, you’re not just helping your physique—your brain will thank you, too. Regular exercise gives you more energy to “get shit done” and more brainpower to make faster, smarter decisions.

8. Treat Yo’self

Dinner begets dessert—it’s the oldest motivation trick in the book. I’m employing this tactic right now: if I finish the first draft of this blog today, I will allow myself 20 minutes of Pinterest indulgence.

Bonus: try a “mindful” respite through yoga, adult coloring, or even video games designed for this purpose. Not only can mindful activities reward progress, they can also help with stress and sleep.

9. Walk Hard

Step away from daunting projects and to gain clarity and perspective.

“Spending time away from work is important to helping you maintain perspective on the challenges you face, and thus to the future of your company.” – Richard Branson

10. Hold Yourself Accountable

This is a tough one, but we’re here to help—share your business resolutions in the comments below! By writing them down in a public place you’ll be much more likely to follow through.

Your (my) sparkling New Balance trainers are wasting away in your (my) closet after last year’s failed attempt at self-improvement. There, there. It’s another year, and yet another opportunity to be better. Resolve with abandon!

What are your tricks that help you stick to your guns? Share them—and your business resolutions—in the comments below.