By Barry Campbell
Independent Canadian vendors are important contributors to the fabric of Canadian culture; numbering over 1.2M strong. Unfortunately in the world of online shopping they are less than equally represented.
The size of the Canadian online shopping market has exploded in recent years to over 24.2 million shoppers with a volume expected to reach $84.4 billion this year.
Just over 89% of Canadian shoppers made an online purchase in 2021. Spending on these goods doubled from an average of $1,165 in 2018 to $2,336 in 2021.
The leaders in the industry; Amazon, Etsy, eBay, etc. have benefited the most as a result of their structural readiness to meet the demand.
Independent Canadian vendors account for a meager 23% of online sales even though they number over 1.2M registered independent Canadian companies. This statistic suggests that independent vendors cannot disregard the growing impact of online shopping. If still in doubt, have a look:
- 60% of Canadian online shoppers make a conscious effort to buy from Canadian businesses.
- 44% try to support small, independent online retailers.
- 75% research online before purchasing, but only 40% of small businesses have websites. What a significant loss of potential revenue for not being aligned to where the consumer hangs out.
Phase 1: Let’s Start a Website
Even though independent businesses should be optimistic about online business growth; the reality is only 25% of small businesses in Canada are conducting some or all of their business online. There are various reasons for this slow adoption:
- Existing bricks and mortar stores have neglected to adapt their inventory management to an online reality. They have an untapped opportunity to combine the best of both worlds: a hybrid of local brick & mortar stores coupled with a robust product offering on eCommerce markets.
- New online independent businesses are overwhelmed by the crush of effort and cost required to carve out a niche and be profitable.
- Product selection, product manufacturing, marketing, SEO, content writing, blogs, and paid advertising. Marketing channels are continually evolving and keeping up with the digitization process takes valuable time to learn and implement; time that is precious and limited to a fully functioning entrepreneur. Is this too much to handle?
OK so now I’ve built my website, where are my customers?
It is becoming abundantly clear that connecting to your potential customer base online is a must in every modern merchant’s play book. Whether you are a bricks & mortar facility looking to expand or an existing online shop; success in the long game for eCommerce business requires a strong emphasis on marketing your brand and maximizing your online presence.
Vendors are typically boutique style, tell their own story, work hard to maintain and retain clients and are great entrepreneurs (in control of their own destiny).
Within the eCommerce landscape today you need to find innovative ways to reach customers within your typically constrained marketing budget. Most Vendors try to attract Canadian online shoppers to their own website; a reasonable hypothesis. But in reality you need a much larger community; you need to find consumers where they are shopping; not necessarily the same place your products are hosted.
Phase II: The Marketplace
A more optimal strategy is to add new channels or marketplaces to your online presence to gain exposure to a much larger online community. Presently only one-third of independent vendors on websites are invested in third party marketplaces.
Existing online marketplaces, like eBay and Amazon, currently are controlling the marketplace space. But joining one of the existing larger marketplaces, vendors often lose control over certain aspects of their business such as shipping standards, product standards, uploading standards, cost controls, etc.
Typically existing third party marketplaces don’t support a deep understanding of individual vendors. The sales are masked behind the value the marketplace views of itself: somehow forgetting about their soul, the vendors, the reason for their existence.
If you intend to join one of these older style marketplaces there are several considerations that you should investigate before starting.
Marketplace Guidelines
Each marketplace has a different set of guidelines and requirements for selling on their platform, often dictating details such as font, size, image, timing, reviews, etc. often with slow communication responses.
Cost
Flat fee, listing fee, product quantity fee, subscription, every marketplace calculates their fees differently. Do an in depth analysis of the overall cost and work out a cost/value function for each.
Payment Options for Customers
Ideally the new marketplace will use your existing payment methods which makes the addition and transition easier.
Payment Options for Vendors
Does the marketplace hold back funds from vendor sales? Are payouts made immediately? Don’t be strangled by cash flow.
Data Analytics
Are inventory management, revenue and sales data available on the marketplace or is the data hidden behind a ‘wall’ and complicated to obtain?
Order Management
Are there efficient processes in place to manage your products, orders, and payments? Communication of orders, efficient shipping, and financial transparency streamlines the workload and increases efficiency of all channels.
Automation
Does the marketplace automate repetitive tasks thereby alleviating the workload for you?
Phase III: Modern Vendors
The growth of online marketplaces is fast becoming the new mantra for modern vendors. Recently there has been a paradigm shift in how a marketplace is organized.
Newer marketplaces are tending to be more community oriented and vendor-centric. They work hard to develop automation for routine tasks, to relieve the vendor’s workload. They never pigeon hole the vendor into a particular mindset. Vendors are allowed to market their products exactly as they would on their own website including their company shipping standards and pricing structures.
Transparency is first and foremost; creating a strong and allied community of vendors and customers. Robust vendor front pages are a common tool to promote congruence between vendor and customer.
One marketplace leading this trend is GOSHOPLOCAL.COM
Imagine a marketplace that:
- Is constrained to support only independent Canadian vendors.
- A platform that automatically integrates products, additions, deletions, inventory from a vendor’s website to the marketplace. No more out of stock sales. Without this the workload for vendors would be overwhelming.
- Promotes each vendor with a robust front page describing their business standards including ethics and social responsibility.
- Routinely publishes blogs and articles submitted by vendors.
- Works to maximize the consumer’s experience.
- Supports local shopping by listing vendors near customers creating the option of a local shopping experience.
- Clean, organized and well defined physical marketplace structures make consumer interactions more positive.
- The Canadian attribute is well defined by stickers on all products made in Canada. Only Canadian vendors (no 3PL imitations) are accepted.
- A marketplace for Canadian vendors by Canadian developers.
I hope you will consider jumping on to new channels in order to increase your online profile and ultimately sales. Don’t be afraid to take that leap – costs and time should no longer be the issue. Independents need an edge; marketplaces may be the panacea.
“While I do intend to return to a life of aimlessly browsing from time to time, I do see myself still relying heavily on online shopping. I also will try to continue to support independent creators and small/local businesses as much as possible.” (1)
Author Bio
Being the founder of GOSHOPLOCAL.COM, I spend much of my working time connecting with vendors (often on zoom) to talk about their businesses; their successes and their pain points. Although I have owned Independent businesses for over 40 years I am still learning and improving my understanding in support of this incredible group of entrepreneurs.
(1)STATCAN.infostats-infostats.STATCAN@canada.ca)
(2)STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).
(3)Source: Maru/Matchbox survey on behalf of CFIB and Google, January 20-29, 2021.
(4) Canadian Internet Registration Authority
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