Opinions expressed by Digital Journal contributors are their own.
For countless ecommerce entrepreneurs, running an online store on a single sales platform can be a viable business model — that is, until the platform shuts down, loses business, or suspends the company’s account. Mike Hale, CEO of Hometown Ecommerce, has built a business dedicated to helping ecommerce entrepreneurs grow their companies and avoid this very issue.
“Diversity is our strength,” he says. “By leveraging multiple platforms, we not only maximize our clients’ reach but also future-proof their businesses in an ever-evolving digital landscape.”
That’s not just boilerplate. Hale’s expertise when it comes to building and diversifying ecommerce business comes from experience. After a lot of trial and error, he built a successful online sales company.
Hale’s friends and family took notice, and he began helping them with their own ventures. Turning the hobby into a business seemed like the next logical step, and Hometown Ecommerce was born.
Part of guiding ecommerce businesses to success in the present (and preparing them for success in the future) is spotting changing trends on the horizon. Around 2020, Hale saw that market saturation and changes in policy were making it harder for online store owners to make a living.
That’s when he zeroed in on a crucial step for any ecommerce entrepreneur looking to future-proof their business: diversification. This suggestion is not unique to the world of ecommerce. Most business experts advise brick-and-mortar companies to build wide, diverse client bases.
It’s common sense; when a significant portion of a company’s income comes from a handful of companies or individuals, losing even one can abruptly slash revenue and plunge the operation into chaos. It’s never a good situation for a company to be in, but businesses with thinner profit margins will be more adversely affected.
Similarly, Hale advises his clients to diversify their businesses by selling on several platforms. For store owners who have never run into an account suspension or similar issue, it can be difficult to understand why diversifying is so important. Hale notes that even a relatively brief suspension can wreak havoc on income.
When an account suspension happens, it’s usually without warning. Sellers often don’t know when their accounts will be up and running again, creating frustration for business owners and customers alike.
“It’s very common for these suspensions to occur,” he says. “And it’s usually devastating when they do because then sales come to a grinding halt. You’re left with trying to resolve the issue, which sometimes doesn’t get resolved very quickly. By diversifying between all these different stores at the same time, one is able to avoid having issues. It’s no big deal because it’s just one piece of the bigger picture.”
That’s not to say that having an account suspended on a major sales platform won’t impact an ecommerce business; it will. However, when that business is spread across several platforms, the impact is substantially lessened.
As the online sales landscape continues to shift, most ecommerce entrepreneurs are coming to understand why diversification is so important. But before they start the process, they need to develop a logical strategy for diversifying.
When creating that strategy, most entrepreneurs tend to look to bigger, established ecommerce platforms. Since larger platforms have more users, and more users will probably lead to more sales, this response does make sense. However, Hale points to the importance of targeting smaller, newer sales platforms as well.
Newer platforms don’t have as many seller accounts as established platforms, so sellers have a higher likelihood of getting noticed. Building a following is advantageous, both in terms of building a reputation and being favored by algorithms that suggest stores or products to users. Both will (usually) lead to increased sales.
Ecommerce’s diversification across sales platforms of all sizes is central to its success. But so is its synergy with another kind of platform: social media. “I think the intersection between social media and e-commerce is the ultimate headline,” says Hale.
He highlights the fact that most social media platforms include built-in shops or marketplaces, and platforms that didn’t have them before are adding them now. When you combine those features with paid ads and an organically built following, you open up incredible growth potential for your company.
“It’s not about having the best product or even the best marketing,” Hale argues. “Combining everything together to reach the masses is what ultimately takes a business to the next level.”
