Selling handmade items online has many benefits. The biggest perk is the ability to monetize an existing hobby or passion. After all, if you enjoy creating things, why not reap the rewards of your labor?

Thanks to the rise of eCommerce, creative entrepreneurs can make and sell DIY items that go far beyond the scope of the local craft fair – to a global audience, in fact.

But what homemade products sell the best? Which are the most profitable crafts to sell? How do you even begin to sell crafts online?

We’ll dive into data-driven insights that answer these very questions, as well as look specifically into the most popular handmade crafts in the DIY space.

Whether you’re a complete beginner looking to start your own craft business or an experienced crafter looking for the next steps and strategy, this post will have something to spark your inspiration.

Before we go category-by-category, let’s establish a few helpful principles.

Validating what kind of crafts sell online

Even if you don’t see your idea on this list, don’t give up just yet. Market demands fluctuate. The surefire way to gauge handmade items in demand is to do a few simple searches.

Your three primary sources should be Amazon Handmade, Etsy, and Google. Type in a few variations of your product idea and see if any competitors come up.

For example: “Game of Thrones costume jewelry” (very specific example, there).

If you see competitors or similarly-aligned vendors, don’t be discouraged. That’s a good thing. That means there’s actual profitability in your idea. And, of course, the more competitors, the larger the attainable market.

Related Posts:

• How to Sell on Amazon Handmade: What You Need to Know
• Why, Where, and How to Sell Crafts and Handmade Items
• How to Sell on Etsy: All the Steps You Need to Succeed

Should you pursue the most profitable crafts? 

Well, yes and no. You need to make sure that your product idea is profitable, of course. Creating a product without an attainable market is a recipe for disappointment. 

However, in another sense, you should not chase the market and just go after trending crafts. If you have no experience or passion for handmade jewelry, don’t pursue that category just because it seems the most lucrative.

That said, the comprehensive list of products in this post has proven itself to be historically profitable. Choose any one of these, and you’ll not have to worry about the market drying up anytime soon. 

With these caveats out of the way, here’s our comprehensive list of the best-selling crafts. 

Health and beauty products

I don’t need to cite stats or studies to convince you that health and beauty has, and always will be, a highly lucrative market. 

But with broad appeal comes the need to niche down, and niche down hard. It’s not enough to specialize in “body lotion.” To stand out, you need to target a hyper-specific persona (think “all-natural body lotion for combination skin”).

Whenever you’re dealing with health or beauty products, you need to be mindful of the local laws and regulations. You also need to be well-versed in biological reactions to ingredients and have a basic understanding of chemistry. 

Your production environment needs to comply with specific FDA standards, and you’ll likely want to consult with a lawyer to tighten up your labeling practices. 

If you’re willing to jump through these hoops, items in the DIY health and beauty space are among the top-selling homemade products of all time.

Some examples of top-selling handmade health and beauty products are:

1. Soaps and bath bombs
2. Lip balm
3. Cosmetics (novelty, specialty, organic)
4. Creams and lotions

All of these are reasonably easy to create and sell from your own home, especially soaps and lip balm.

Clothing and apparel

Thanks to inexpensive design software and print-on-demand sites like Zazzle, Teespring, and Bonfire, starting a custom-branded apparel business has never been easier. 

Apparel printing is a perfect handmade side hustle for those who are more creative than “crafty,” per se. If you’re a graphic designer, an artist, or have a cool idea for a shirt, you can make it a reality in less than a day’s work. 

Further, custom clothing and apparel are perfect for businesses with existing audiences like gyms, bands, and local specialty shops. 

Custom-printed apparel is not only a significant revenue stream but free advertising and an excellent way for your audience to connect with your brand. 

Even if you’re more the entrepreneurial type than the artistic type, you can still profit from selling apparel. Just hire a competent designer on a freelance site like Upwork, pay a one-time fee for one or several designs, and upload to your favorite print-on-demand site.

Some fulfillment sites even offer dropshipping, meaning you don’t need to handle the apparel directly — it goes straight to the buyer. 

If you want to go even deeper, you can look into screen printing your own clothing designs, cutting out the middleman altogether. 

Some examples of custom-printed clothing and apparel are the following:

1. Bumper stickers
2. Magnets
3. T-Shirts
4. Hoodies & sweaters
5. Mugs
6. Mouse Pads
7. Enamel pins
8. Stickers
9. Coasters
10. Face masks (in the COVID age)
11. Pillows
12. Towels

Related Post: How Make-To-Order Works and Its Advantages

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Jewelry

If you check any popular handmade marketplace, you’ll consistently find jewelry among the most popular handmade items.

There are so many things that make custom jewelry appealing to both sellers and buyers. It’s often inexpensive. There are tons of niches to choose from (novelty, costume, fine), and they’re easy to ship and mass produce.

However, as mentioned above, a low entry barrier means high competition (this will be a universal truism for any item on this list). So niching down is more than just a luxury, it’s a necessity. 

Anyone who pursues handmade jewelry must also have a deep passion for staying on the bleeding edge of trends. Do you already scour Pinterest boards for ideas and pour over sources of inspiration? Then a homemade jewelry venture should come very naturally to you.

If this sounds like a chore, it may be best to try something else on this list.

While the barrier to entry is low, the skill ceiling for jewelry-crafting is high. Depending on what kind of jewelry you’re keen on making, you may be welding, 3D printing, or smithing with expensive materials.

These are skills that can take months of dedicated practice to master.

You can also keep it super simple and create bead necklaces (an excellent option for budding entrepreneurs and children). The possibilities are endless.

There are many online tutorials and Facebook communities for handmade jewelry, so plug into a group of like-minded makers for inspiration.

Also, be sure not to skimp on product photography. Due to the meticulous and often reflective nature of jewelry, a lousy product shot can make an otherwise excellent piece of craftsmanship look amateurish. 

You’ll also want to have shots of actual models (this could just be you!) wearing the product so buyers can see the items in context. 

And finally, be sure to use sites like Jewelfie and the Kiwi Size Chart and Recommender, which help browsers “try on” jewelry before buying.

Related Post: How to Sell Jewelry on Etsy: Your Best Practices for Growth

Candles

Candles are deceptively simple to make, affording them a top spot as some of the most profitable crafts to sell. Like jewelry, the barrier to entry is low, but the competition and skill ceiling is high.

And, of course, niching down is essential. Didn’t think there were candle niches? Well, think again.

Here are some examples of the top-selling handmade candles:

1. Eco-friendly candles
2. All-natural candles
3. Beeswax candles
4. Religious candles
5. Birthday and novelty candles
6. Votive candles
7. Tea lights
8. Serenity by Jan (you burn ‘em, you buy ‘em)

And candle makers are probably formulating even more varieties as I’m writing this. 

Producing candles on a mass scale isn’t as onerous a task as some of the other items on this list, making them great candidates for clean and straightforward scalability. 

However, they are a fire hazard. Keep yourself protected: get insured and label your products per local laws or regulations.

Art and prints

Just a mere 40 years ago, if an artist or designer wanted to sell prints of their work, they’d need to create multiple physical copies. Most of the time, that meant repainting a piece from scratch.

While handcrafted copies have a unique charm, this isn’t exactly a sustainable business model for people with limited time and space. 

We haven’t developed AI that can paint with human creativity and prowess quite yet, but we have a bevy of tools at our disposal that make scaling your artistic works simple and easy.

Not only do tools like Photoshop and Illustrator allow artists to create beautiful works of art without touching a paintbrush, but those same programs can also scale that art to any size and infinitely duplicate it.

That means artists can sell their pieces as full-size posters or printed on tiny pins. 

Today’s art sellers don’t even need to be prodigious drawers or painters. There are niches for pixel art, fine art, graffiti, photography, and just about anything else you can imagine. 

Consumable goods

If you’re a creator who expresses yourself through food, there’s a profitable market out there for you.

Of course, handmade consumable goods introduce a host of hurdles, such as ingredient listings, allergen warnings, and FDA approval.

Dealing with perishable goods demands a tight inventory management strategy. SkuVault will help you track your supply chain, avoid stockouts, and ensure you’re not ordering too much or too little of your materials. 

That said, items like candy, baked goods, marshmallows, and preserves are great candidates for shippable treats that don’t need to be refrigerated. 

The bottom line is that everyone loves food. If you’re willing to jump through the requisite hoops and creatively niche down, it’s possible to build a sustainable business selling edible treats to customers around the country. 

In addition to the goods mentioned above, the following are other great handmade (or hand-curated) items to sell:

1. Tea
2. Coffee
3. Rare & international snacks
4. Soda
5. Wine & spirits
6. Cookies
7. Miscellaneous sweets
8. Pet treats (see below for more on pet supplies)
9. Make-at-home ingredients kits

These products also make great candidates for subscription box bundles (more on that below).

Digital products

Digital products and “info products” are some of the fastest-growing revenue generators online.  While they stretch the definition of “handmade” a bit, the allure is undeniable. 

Take just the online education space, for example. Nowadays, rather than deal with the limitations of in-person learning, subject matter experts can film a course using nothing but their iPhone and PowerPoint. 

Thanks to sites like Skillshare, Udemy, and a whole host of WordPress plugins, savvy entrepreneurs can set up an online classroom and scale their expertise infinitely. 

The proof is in the pudding. A recent study projected the online learning industry to be worth $325 billion by 2025. 

And it doesn’t just end with education. Just about anything and everything can be digitized and sold today. Think about it: there is almost no overhead, digital items can be scaled infinitely, and there’s no need to worry about inventory or logistics.

Sites like Envato have built their entire business on creatives selling digital assets to one another. These include:

1. Photoshop brushes
2. Animation assets
3. Motion graphics
4. Courses & education
5. Font licenses
6. Background and royalty-free music

Many times, storefronts like Udemy, Envato, Thinkific, Storyblocks, and others take care of all the logistics, hosting, and customer support in exchange for a percentage of every sale. Digital products are about as close to “set-it-and-forget-it” as you can get.

Traditional handcrafted products

As great as digital products are, there’s still no substitute for bespoke, handcrafted goods. A meticulously tooled leather wallet. A perfectly-beveled wooden kitchen utensil. 

There’s something about the visceral, physical experience of using a traditional handmade product that’s unrivaled by even the most advanced technology. 

Products handcrafted with traditional materials are rare and often expensive. This is due to the particular skill set needed to make them and their inability to be mass-produced. 

Lovers of traditional tools and accessories are more than willing to pay a premium for the experience of a one-of-a-kind product.

To create something worth selling, you’ll need to develop or hone your skills in one of the following areas:

1. Woodworking
2. Smithing
3. Leatherworking
4. Glassblowing
5. Embroidering
6. Sewing

There are plenty of YouTube tutorials and online courses available, but these trades may require expensive tools or even special workshops. Before diving in, be sure to count the cost and assess if it’s a worthwhile investment.

Here are some examples of handcrafted things to make:

1. Custom metal tools or knives
2. Wooden furniture
3. Handcrafted cooking utensils
4. Leather handbags, purses, or wallets
5. Glass or metal art

It’s no secret we spend most of our working lives in front of a computer screen. Increasingly, there seems to be a renaissance of creatives trading in their Macbooks for miter saws. Call it whiplash from the technological revolution or an innovative side hustle.

Either way, it’s a great way to connect with disciplines practiced by humans for thousands of years — and maybe turn a nice profit at the same time.

Pottery and clay objects

Unlike many of the other items on this list, pottery requires an investment of both time and equipment. 

Start by checking out some online pottery classes and watch the process on YouTube before sinking $1,000+ into a kiln. The high barrier to entry means competition will be less than other items on this list. 

Just keep in mind the time and effort commitment it takes to learn a skill as intricate as pottery.

There’s a significant difference in value between a hand-molded planter forged in a craftsman’s kiln fires and something mass-produced for a big box chain. 

Just make sure to keep your costs low by sourcing your raw materials from sites like Sheffield Pottery and keeping track of your inventory. Due to the product’s fragile nature, you’ll want to make sure you’re investing in safe packaging without eating too deeply into your margins. 

Use an inventory management platform like SkuVault to keep track of how much revenue you’re generating from each channel (Amazon Handmade, Etsy, Shopify, etc.) and make data-driven decisions on how to keep your costs low.

Pottery commerce is a challenge logistically, but the rare skill plus the bespoke nature of handmade objects make it one of the most profitable crafts to sell. 

Pet supplies

The pandemic hasn’t stopped pet owners from taking good care of their fur babies — and shelling out serious cash for them, too. The pet care market is expected to rise by 5.6% from now until 2026 and is projected to exceed $325 billion. 

If you’ve got a passion for pets and you’re waiting for a sign to get into this business, this is it. 

In addition to pet toys and pet care products, there’s a thriving market for pet treats. And we’ve come a long way from throwing dogs our table scraps. 

Several companies specialize in allergen-free, health-conscious dog treats. Even functional dog treats that brush your dog’s teeth for you while they chew.

Dog owners don’t need to be your target demographic, of course. This market has space for cat lovers, birds, reptiles, rodents, and everything in between. 

As mentioned above, consumable goods introduce a whole bevy of challenges that you’ll have to navigate. Things like perishability, cleanliness, or ingredient lists will all need to be on your radar. It probably couldn’t hurt to consult a lawyer about your business as well. 

Some examples of handmade pet supplies include:

1. Pet clothing and costumes
2. Pet treats
3. Leashes, collars, tags
4. Food bowls
5. Enclosures 
6. Toys
7. Hygiene supplies

Music

When people think of a music career, they probably think of living out of their car and playing shows for a daily meal. 

Thanks to the high demand for digital assets, musicians don’t have to be perpetually starving artists. 

It’s no secret that video, both personally and professionally, has exploded as a consumable medium. That means everyone from casual vloggers, TikTok “celebrities,” and massive marketing teams have an increasing need for background music.

(Royalty-free music, too. No one likes a YouTube copyright strike.)

While this may not be on the artistic level of a Bob Dylan protest song, it’s still a very viable way for musicians to pay the bills while waiting for their big break. 

Sites like AudioJungle, Pond5, and Storyblocks allow composers and musicians to upload background tracks for royalty-free digital content usage. Fellow creators purchase a license to use the music in their creations, and artists get a cut.

And, if you’re talented and lucky enough to get into a film or TV music library, you can even get placed in popular shows on cable networks (especially relevant with reality TV shows). Every time an episode featuring your music runs, you get a check. 

As with any creative venture, the barrier to entry is still high — you still need to be talented and skilled in music production. But there’s never been a better time to make a real living as a musician selling “handmade” musical assets.

Strategies to maximize your handmade craft business

Bundle your homemade items into a subscription box

Subscription boxes build upon the idea that items together are worth more than the sum of their parts. For a closer look at this topic, check out our blog post on subscription boxes here.

This strategy can be immensely profitable if you’re creating multiple categories of handmade items to sell (such as soaps and home decor), which appeal to a similar demographic.

These also make excellent gift ideas.

Using SkuVault, you can aggregate purchasing data from multiple channels like Amazon and Etsy. You can then drill down into your site analytics or demographic insights in those channels and figure out the overlap of who’s buying your handmade products.

If the demographics have significant overlap, you’re a prime candidate for bundling those products into a subscription box. 

Study the top performers

On just about every handmade marketplace, you can sort by category and top sellers. Do an in-depth analysis of the top-selling crafts and ask yourself the following questions:

• What crafts sell best on each platform?
• How do the makers differentiate their products?
• How do they design, package, and price their wares?

Also, don’t be a stranger. Most creators are more than happy to talk about their business with aspiring entrepreneurs. Reach out to them for a Zoom call or offer to buy them a coffee if they’re local. 

Consider asking them questions about:

• Why they chose their current platform and what they like/don’t like about it
• How they manage inventory
• How they design and package their products
• Their daily workflow for fulfilling orders
• How they’ve scaled their business to accommodate growth

Insights from proven performers can save you tons of headaches, especially as you’re starting your handmade venture. 

Outsource the nonessential stuff

As a creative entrepreneur, your most valuable asset is your creative skill, whatever that may be. 

That means menial (but necessary) tasks like tinkering with your site, answering customer service emails, and trying to figure out inventory management aren’t the best uses of your time.

It can be tough to relinquish control and delegate, but every moment you’re not doing what only you can do is ultimately inefficient. 

Especially with many people still at home, building a strong team of contracted help has never been easier.

Check out sites like Upwork for reasonably priced virtual assistants, copywriters, web developers, and more. While it requires an investment upfront, it frees you up to create what your audience wants, thus increasing your time and business value.

And if you’re anything like most creatives, dealing with inventory management logistics probably sounds like a nightmare. Don’t try to manage that yourself. 

Invest in an inventory management platform like SkuVault that automates and aggregates all relevant data for you, including your channel sales, in-progress orders and shipments, and when you need to restock.

A bonus of delegating these secondary tasks to others early on is that you’ll have a solid blueprint for scaling. This will come in handy when the orders start piling up, and you need to hire a team.

Don’t neglect traditional sales channels

It can be tempting to put all your eggs in the online basket, but the most successful businesses often utilize a hybrid approach, building both an Etsy Shop (for example) and selling at craft fairs and farmer’s markets.

Oftentimes, it takes these grassroots efforts to build a following that you can leverage to accelerate your online store’s success.

Next steps for success in selling crafts online

Now that you know what DIY crafts sell best online, you should have no problem coming up with ideas. What’s next? Learn where to sell handmade items to supercharge your new business.

Not only can you make money from an enjoyable hobby at a low cost, but you’re tapping into an ancient system practiced by humans for thousands of years. 

Thankfully, inventory management processes haven’t stayed in the stone age. Many of the top-selling crafts on this list are simple, but keeping track of inventory on multiple channels is anything but.

SkuVault exists to help eCommerce ventures, both small and large, track shipments, automatically create shipping labels, and aggregate sales on multiple channels (such as Amazon Handmade and Etsy).

Whether your production facility is a state-of-the-art lab or a humble sewing machine, we’d love to show you how SkuVault can come alongside your crafting business.

Our platform will help you establish a firm foundation of inventory management that will serve you for years to come.

Book your live demo today.

GoDaddy offers a compelling blend of features, but is it the right online storefront for you?

While you can attach an eCommerce store to an existing website with other services, GoDaddy lets you combine the site and store into one.

This consolidated approach is a lifesaver for business owners too tired or busy to jump between different platforms. But it’s not for everyone.

We’ll explore GoDaddy’s robust features, how they compare to the competition, and whether you should use them to operate your storefront.

What is GoDaddy Commerce?

GoDaddy Commerce is an eCommerce platform provided by GoDaddy, a popular company known for domain registration and web hosting services.

(You’ve likely seen their viral Superbowl ads in recent years.)

This platform enables users to create and manage online stores with ease, offering a suite of tools and features designed to help businesses sell products and services online.

You don’t have to know a single line of code – just answer a few questions in their questionnaire and the GoDaddy website builder will do the rest.

This feature is an extension of GoDaddy’s overall business model as a user-friendly site builder.

You’ll be able to easily sell more products with time-saving tools such as weight-based shipping calculation, abandoned cart recovery, and secure credit card transactions.

One of their most appealing features is their low online transaction fee of 2.3% and $0.30 cents, which usually range between 2.4% to 2.9%.

What features come with GoDaddy online stores?

GoDaddy eCommerce is a consolidated option for new business owners or experienced business owners tired of managing multiple platforms.

Below are a few of their most time-saving and user-friendly features.

You’ll enjoy fast setup

Setting up your services online can be intimidating due to multiple steps such as web design and payment processing.

GoDaddy provides fast, easy website creation so you can have your online store up and running in just a few minutes.

Their Artificial Design Intelligence assists with setup by taking the answers to your questions and applying them to your site’s design.

There are plenty of personalization options

Personalization options allow you to customize the look and feel of your store to match your brand. You can try GoDaddy’s free plan yourself to get a feel for their drag-and-drop editor.

You get fundamental marketing tools

If you’re concerned about having to hop between platforms to market your store, GoDaddy has marketing tools already available. They offer several staples such as:

• SEO tools
• Email marketing campaigns
• Coupon codes 
• Marketing planner for social media
• Social media ads for Facebook and Instagram

Their advanced analytics also lets you track customer behavior, sales data, and more.

Everything is mobile friendly

You don’t need to go out of your way to optimize your online store for mobile devices. GoDaddy’s mobile responsive design ensures your eCommerce site looks great on any device.

They provide dependable security features

When an estimated 87% of small businesses have customer data that could be stolen in a cyberattack, you can’t overlook security features.

GoDaddy’s security provides secure hosting and integrated payment processing that is PCI compliant.

How much do their online stores cost?

Their Commerce plan is $25.99/mo when billed annually and $29.99/mo when billed monthly. Both payment methods come with full functionality to upload, sell, and advertise your products or services.

The Commerce plan comes with the standard GoDaddy features: building a website, obtaining a custom domain, and a website SSL certificate.

If you’re not ready to commit yet, you can use their Free plan to upload your products, design your store, and set up pricing. This will also help you get comfortable with using the platform.

However, you can’t sell products with their Free, Basic, Standard, or Premium plans – only their Commerce option or Managed WordPress Ecommerce Hosting.

What’s the difference between GoDaddy Commerce and Managed WordPress Ecommerce Hosting?

GoDaddy offers both “Commerce” and “Managed WordPress eCommerce Hosting” plans. While both include selling online through GoDaddy, there are a few key differences.

Their Managed WordPress Ecommerce Hosting plan uses Woocommerce, a customizable open-source eCommerce platform.

GoDaddy will install it into your WordPress to provide you online store features such as staging environments, product listings, and store listings. You’ll then get access to a library of Woocommerce extensions for marketing, shipping, and much more.

You’ll save hundreds – maybe thousands – of dollars with their comprehensive Woocommerce resources instead of buying them all individually.

This plan is best for business owners who need more control over their store’s functionality, but still want GoDaddy’s security and expertise. 

To compare, their Commerce option already has several key eCommerce features built-in so you can get started immediately.

What are the benefits of GoDaddy Commerce?

GoDaddy Commerce’s main appeal still comes from its fast website builder. While some eCommerce storefronts plug into existing sites, you can enjoy multiple benefits in one place.

You can get started within minutes

Their all-in-one package has everything you need to get started selling online. Once you sign up with their Commerce plan, you’ll enjoy: 

• User-friendly site-building 
• Web hosting
• Domains
• Secure payments
• Branded content
• Fraud protection

Drag-and-drop editor is great for beginners

You don’t need to learn how to code to put together your eCommerce storefront. GoDaddy’s user-friendly dashboard comes with drag-and-drop functionality, making it easy to manage and customize your store.

Their customizable templates allow you to create a unique look for your store. They categorize each one by their dominant feature, such as easy booking features or a minimalist color scheme.

For example, their Hello MCM theme comes with a Facebook review feature to showcase recent customer testimonials. 

Another solid example is their Croinna theme, which overlaps nicely with an Instagram account with a focus on landscape images. 

Lots of built-in marketing and inventory management features

GoDaddy’s built-in reporting tools help you keep track of sales, inventory, customers, and more. They also provide powerful marketing features such as automated email campaigns. 

Their automated email features save you time sending out emails to customers in different stages of their buying journey. You can also automate the following:

• Points of contact 
• Customer shipment updates
• Booking confirmation
• Order cancellation
• Cart abandonment

Customer support to help you 24/7

GoDaddy provides comprehensive customer service and support to help you get the most out of your store. They’re available 24/7 by phone or through their site’s chat feature.

Checkout is a breeze for customers

Did you know 17% of shoppers will abandon their purchase if the checkout experience is complicated or slow? GoDaddy’s intuitive checkout process makes it easy for customers to complete their purchases.

You can also test out the checkout process yourself and edit it to ensure a smooth buying process. You can add pickup instructions or order completion buffer times. 

What are the downsides of GoDaddy commerce?

GoDaddy is a well-known brand for simplifying the process of building websites and managing online stores. However, they still might not meet every challenge you have (and may even cause new problems).

Design customization isn’t as flexible as other options

Do you want to tweak every last color, picture, and typeface? GoDaddy’s limited design customization options may be less appealing to you than other eCommerce platforms. 

While GoDaddy provides plenty of appealing templates, they still have fewer options than other platforms. For example, compare GoDaddy to Wix. GoDaddy offers over one hundred templates, while Wix offers over eight hundred. 

Going even further, the WordPress + WooCommerce ecosystem has thousands of themes available and is completely open-source, allowing you to adjust your site to pixel-perfection (if you’re into that sort of thing).

Coding features may be limited (for the storefront)

Do you already have some coding knowledge and want to apply it to your storefront? While GoDaddy has an HTML editor for custom code, you’ll have a limited ability to embed code such as sliders, galleries, or other interactive features.

Fee and payment structure can be confusing

What you see isn’t always what you get with GoDaddy. Their fees and payment structure are a little confusing at first and require some digging before you can budget properly.

A common pain point for both business owners and customers are fees. GoDaddy’s non-standard fee structure can be a little confusing at first.

On the plus side, they don’t charge transaction fees. Their fees are also generally lower than other storefronts at 2.3% per transaction with $0.30 cents.

However, you still have to pay the fees of any payment gateway you’re using. These costs could quickly become a lot higher than you initially expect.

Their pricing can be confusing since you’ll owe different amounts depending on whether you pay monthly or annually.

Their business email address also expires after one year, which means you’ll have to purchase another to keep features such as archiving or HIPAA compliance.

GoDaddy lacks payment options

Unfortunately, GoDaddy has limited payment options. It only supports PayPal, Stripe, and Apple Pay. 

While these payment gateways are popular, you’ll still miss out on customers who prefer Google Pay or American Express.

Little technical support 

If you need to ask a lot of questions on a rolling basis, you may be disappointed. GoDaddy does not provide a customer service number for inquiries or technical support.

GoDaddy provides support through email and a live chat support option on their site.

No outside marketplace options

While you can list your products or services on other marketplaces such as Amazon or eBay, GoDaddy doesn’t offer a marketplace option. 

FAQs

Do you still have questions about GoDaddy’s eCommerce capabilities? We’ll answer them below.

What is the GoDaddy online store?

GoDaddy is a website builder that helps businesses quickly and easily create an online storefront.

They offer a range of tools to help users customize their store, including dropshipping and inventory management.

Is it better to use GoDaddy or WordPress?

Both GoDaddy and WordPress are comprehensive online storefronts. You’ll need to assess your skill level, business size, and budget to decide which storefront is best for your business. 

GoDaddy is an appealing choice for beginners since it has the storefront and website all in one place. They also come with user-friendly features such as a drag-and-drop site editor. 

WordPress is better suited for business owners who have some coding knowledge. WordPress offers a wide range of design and feature customizations.

If you want the best of both worlds, consider GoDaddy’s Managed WordPress Ecommerce Hosting plan.

Are GoDaddy online stores easy to use?

Yes. GoDaddy is designed for users of all skill levels, making it easy to set up, customize and manage your store. They provide helpful tutorials and customer support when you need extra assistance.

What kind of payment methods does GoDaddy offer?

GoDaddy offers a range of secure payment options, including credit cards, PayPal and Apple Pay. It also offers support for recurring payments.

Do GoDaddy online stores offer shipping services?

Yes. GoDaddy provides integrated shipping services so you can easily manage orders and track shipments in real time. It also supports drop shipping to help you manage your inventory more efficiently.

Is GoDaddy secure?

Yes. GoDaddy is a PCI-compliant platform, using the latest encryption and security protocols to keep your customers’ data safe. It also provides fraud protection tools to help protect against fraudulent transactions.

GoDaddy Commerce is ideal for beginning shop owners

Setting up an online store doesn’t have to involve an expensive degree or years of coding knowledge. GoDaddy’s eCommerce website builder equips beginning shop owners with high security and customization at an affordable cost.

GoDaddy’s main appeal lies in its consolidated design, so you can build a website that’s ready to sell products and services. Notably, you can also add GoDaddy to an existing WordPress site with their Managed WordPress Ecommerce Hosting plan.

If you prefer to have a finer level of control over your store’s functional or design features, GoDaddy may be less appealing. This platform also doesn’t have the most straightforward pricing, which can be confusing for new business owners.

Overall, GoDaddy is a prime choice for small business owners who want to save time while still putting their best foot forward. 

Once you’ve got your eCommerce website up-and-running, that’s when the real work begins.

Looking to develop and grow a successful eCommerce business?

See how SkuVault’s inventory management software makes it easy to track stock, prevent mis-ships or overselling, and saves time that could be invested in growing your business.

And check out these other related posts:

• The Ultimate Guide to Starting An eCommerce Business in 2023
• 30 Big eCommerce Trends to Watch Out For in 2023
• 9 eCommerce Software To Grow Your Business: 2023 Guide

Guiding your customers through the sales funnel is a tricky task. So when the opportunity arises, it’s important to make the most of every step of their customer journey.

One of the most powerful marketing strategies to help your online store increase sales, promote customer loyalty, and improve average order value is cross-selling your products.

And with the right practices, cross-selling can add great value to your store, whether you’re new to the technique or looking to revamp your marketing strategy.

In this article, we will explore 20 examples of cross-selling for eCommerce stores in 2023, their specific use cases, and how to apply them to your business.

Summary

• Cross-selling is a sales strategy where a sales representative suggests add-ons of related items to customers who expressed interest in another product.
• There are different ways to apply cross-selling to your eCommerce marketing strategy, including making bundled products, recommending similar products or complementary items, subscriptions, and more.
• The aim of the different cross-selling scenarios is to make the customer buy an additional item they wouldn’t have bought otherwise. 
• A customer gets a discount, free shipping, or other benefits in cross-selling – or the additional items enhance the original product they bought.

What is cross-selling?

Cross-selling is a sales technique where a company encourages customers to purchase more or complementary products in addition to what they are already buying or have shown interest in.

In other words, it’s the practice of recommending or suggesting related or additional products to customers to increase their average order value (AOV).

Types of cross-selling initiatives

All the cross-selling strategies discussed in this post fall roughly into one or more of these categories:

1. Bundled products

Bundling products involves cross-selling two or more products together for a discount. Offering bundled products is a great way to increase average order value and encourage customers to purchase multiple items from your store.

2. Recommended products

This is a type of cross-selling where you recommend relevant products based on what your customers have viewed or are viewing. This gives buyers the opportunity to discover new products that they are more likely to buy and, in turn, increase the total purchase amount.

3. Complementary products

Recommending products that go with the item your customers are buying will increase the chances of them buying both of your items. Some examples of this cross-selling strategy include a case for an electronic device or accessories for clothing.

4. Subscriptions

This cross-selling method involves offering your customers the option to sign up for a subscription service for the products they are buying to receive deliveries on a recurring basis. This helps to increase customer loyalty and increase customer lifetime value.

20 examples of cross-selling in eCommerce (steal these tactics!)

There are dozens of creative ways to cross-sell customers, especially for eCommerce websites. Here are some examples of cross-selling and how they can be used effectively:

1. Upselling higher-end versions of the same product

While cross-selling and upselling are distinct marketing techniques, you can make them work together to benefit both your customers and your sales.

Upselling in eCommerce websites involves offering customers a higher-end or more expensive version of the product or service they are interested in. 

For example, for an electronics retailer, a customer looking for a mid-range model of a smartphone could be offered an upsell to a higher-end version with better features such as cameras or storage capacity. 

Then, try to cross-sell by recommending higher-end versions of complementary products. For instance, you can show different options of accessories such as chargers and phone cases and suggest more premium versions of them.

2. Showing related products that customers have purchased previously

Showing related products that your customers have previously purchased is another effective cross-selling example, especially for online retailers. 

Every so often, you’ll log into your Amazon homepage and see a “Buy it Again” section with the opportunity to re-purchase products based on your purchase history.

(And yes, we will be using a lot of examples from Amazon in this post because, let’s face it, they’re the best in the business.)

An additional benefit when you analyze customer data and create customer cohorts is to gain insights into what products an existing customer would more likely be interested in and offer personalized recommendations to them.

This can be effective for businesses with a wide range of products. 

3. Suggesting additional items to complete an outfit or look

This method involves suggesting coordinating or supplementary products that pair well with the original product your customer is interested in.

For cross-selling examples like this, you can show a customer who is browsing for a dress on your store suggestions for shoes, jewelry, or a bag that could complete the look. You can also post photos with the product in a complete outfit. This encourages your customer to purchase multiple items from your store.

This is the same effect that fashion mannequins have in traditional clothing retail: you want to “complete the look” – like what you see on the mannequin.

By offering relevant suggestions as add-ons to your customer’s original product, you can add more value to your sales and provide added value to your customer.

4. Displaying complementary products, such as accessories for a phone or tablet

Displaying complementary products is a more common cross selling example. This involves showing related or complementary products either on the product page or the checkout page.

Probably the most well-known example of this time of cross-selling is Amazon’s “Frequently bought together” section, which bundles similar products and even offers the opportunity to add them all to your cart.

For example, on the product page for the Shure SM57 (a very popular studio microphone), Amazon recommends some essential gear like a pop filter and microphone cables.

These suggestions can personalize and improve the customer experience while providing protection or enhancing their original purchase.

This marketing strategy helps your business provide a more complete solution to your customer’s possible pain points and make their shopping experience more seamless. These thoughtful suggestions with relevant products can also encourage repeat purchases.

5. Offering bundles and packages as discounted deals

Bundles and packages, especially with discounted prices, are a common cross-selling technique designed to attract customers into spending more in your store. This is done by grouping together closely related products and offering them as a single purchase or package deal for a reduced price.

For example, if your store sells beauty products, you can offer skincare bundles for the summertime, such as lotions and sunscreens. 

You can also try to bundle products for a complete step skincare routine, including a face wash, toner, and moisturizer. These packages are usually cross-sold for a discounted price that is less than the individual product’s combined prices.

By offering bundles, you can encourage your new or existing customers to buy additional items they might not have considered otherwise. This can also help you clear out the inventory of slower-selling items by bundling them with more popular products.

6. Recommending similar products to ones that customers have viewed or added to their carts

If your store sells similar products of the same category, you can leverage their similarities by recommending them to a new or existing customer who has viewed or added an item to their carts.

This example is very similar to the aforementioned “Frequently bought together,” but a bit broader.

While the above category will often recommend items required to get the best experience out of the original purchase, this cross-selling strategy recommends items in the same niche, vertical, or category.

For example, if the customer ends up purchasing the SM57 (the microphone listed in a previous example), you may also send them follow-up emails in a few days or weeks prompting them to purchase other audio gear, such as higher-end microphones, MIDI keyboards, or audio mixers.

7. Offering free shipping for additional items in a customer’s order

Incentivizing your customers to purchase additional items is often an effective technique for cross-selling. This method involves offering shipping discounts when a customer buys items together with a specific product.

Again, Amazon is the gold standard here.

For some eligible items, Amazon will offer same-day shipping so long as those items exceed a certain price threshold (usually $35 or more).

This marketing technique encourages customers to purchase additional items and, in turn, spend more money on their marketplace.

It can also improve customer satisfaction by reducing the cost and timeline of shipping their items. These offers, when done successfully, can increase the likelihood of repeat purchases.

8. Recommending products that complement existing purchases in the customer’s cart

Cross-selling products from your customer’s cart involves analyzing the items in your customer’s shopping cart and cross-selling items that complement or enhance what they have already selected.

For cross-selling examples like this, if your customer added a camera to their cart, you may suggest additional products like camera bags, tripods, or memory cards. 

This goes the same way if you’re running a fashion store and a customer selected a dress. You can suggest complementary products like a purse, jewelry, or shoes for them.

Again, Amazon shows us how it’s done with their cart cross-selling user experience:

Implementing this cross-selling campaign can make your customers’ shopping experience more comprehensive. Knowing what to offer your customers can also help show you as an expert in your industry.

9. Including relevant reviews of products that customers are viewing

This is a bit of an indirect cross-selling strategy, but it’s worth mentioning nonetheless.

The point of a product page is not only to facilitate the sale of a given item but to give customers all the information they could ever want to know about the product.

This includes, but isn’t limited to, its features, benefits, and customer reviews, along with other product details.

Including reviews of related products on your product page creates cross-selling opportunities that increase the chances of making a sale since it helps build trust and credibility with your online store. 

When your customer sees genuine good reviews on frequently bought similar products, they are more likely to trust your store and feel confident in their purchase.

10. Selling extended warranties for products the customer is interested in

One possible concern for your customers is the longevity of the product and potential repair costs or replacements. To mitigate this, you can try cross-selling products with extended warranties that can help you provide customers with security and peace of mind.

For example, a customer interested in purchasing a laptop may be more likely to buy a product with an extended warranty. This usually covers repairs or replacements for a longer period of time than the standard manufacturer’s warranty.

By offering additional protection, your customers will see that you are confident with your products and will be more likely to trust your business and stay loyal to your brand. This is more likely to result in increased customer lifetime values.

Here’s how Samsung does it during the smartphone checkout process:

11. Offering upsells on shipping or delivery services

Customers are often willing to pay extra for expedited shipping or delivery options since that can give them greater convenience and faster service. Apply cross-selling strategies like upsells in shipping or delivery services to complement the item they want to purchase.

For example, a customer who bought an item as a gift may be willing to pay extra fees for expedited shipping to make sure their gift arrives on time.

By offering a wider range of delivery options or more convenient shipping choices, you can also provide a more customer-focused experience for your customers.

12. Recommending spares and consumables that customers can buy to replenish existing items

This is another one of those cross-selling techniques that help build trust with your customers by showing that you are committed to their long-term satisfaction.

Cross-selling spares and consumables such as high-quality replacement blades for razors or ink cartridges for printers will help your customers continue using their products for a longer time.

13. Displaying deals and promotions related to products customers have already purchased

Displaying deals and promotions for related products your customers have already purchased is a powerful cross-selling and upselling technique.

This is because offering promotions on related items they are already more likely to buy would further attract them to buy from your store instead of going to another website. 

For this cross-selling example, if your customer buys a gaming console, you could proceed to recommend deals and promotions related to their purchase, such as a controller or charging dock.

Cross-selling strategies like this can also work when offering useful and special deals that create a sense of urgency. This can make them feel like they get a limited offer that’s exclusive to them.

14. Upselling subscription packages that offer added benefits or discounts on future purchases

Again, Amazon is the best when it comes to this strategy.

For perishables or renewables, Amazon’s Subscribe and Save option allows customers to save 5% on their initial purchase and 15% on all repeat deliveries.

Customers can then select their delivery frequency and cancel at any time. Now, Amazon enjoys recurring revenue from the customer and the customer gets essential products conveniently delivered at a nice discount. It’s a win-win.

15. Showcasing multi-buy offers for select products

Showcasing multi-buy offers for select products is a common cross-selling technique used by many eCommerce stores. It involves offering your customers a discount when they buy multiple quantities of a particular product.

In cross-selling examples like this, if your store offers beauty products, you can give discounts on a particular brand of lipstick if they purchase two or more tubes.

These deals can improve customer satisfaction and clear out excess inventory while boosting overall sales for the store.

16. Displaying discounts for customers who purchase multiple items together

Just like multi-buy offers, cross-selling by displaying discounts for customers purchasing multiple items together is a great way to increase AOV.

Basic offers like “buy this ____ with a ____ to get 10% off on your total purchase” can encourage your customers to buy multiple products together. 

In turn, you are giving them a good deal, all the while increasing your sales and promoting your other products.

17. Offering loyalty programs with exclusive deals and rewards for regular customers

Loyalty programs can also be a way to cross-sell products to repeat customers. Offering exclusive deals and rewards encourages customers to continue making repeat purchases.

For instance, you can offer your customers to sign up for a loyalty program. In turn, they will receive a discount for their next purchase or earn points every time they spend.

Remember punch cards from your local car wash or coffee shop? Same principle.

These incentives can help increase customer retention and, in turn, drive additional sales.

More importantly, loyalty programs can help your business continue to understand your customer’s preferences and behavior. You can use this information to adjust your cross-selling strategies in the future.

18. Suggesting additional services such as installation, delivery, or repair

Some consumers care less about the cost of a product and more about the hassle of having to assemble or put it together.

Or perhaps particular disabilities or physical limitations may hinder customers from being able to assemble the product themselves.

You can both solve the customer’s pain point and increase their AOV by cross-selling or up-selling an assembly service like Amazon does here with this TV mount:

19. Offering gift wrapping or personalization services for customers who are buying items as gifts.

Another supplementary service you can cross-sell to your customers is personalization services for customers buying items as gifts.

By cross-selling gift wrapping or any other personalization service, you can enhance your customer’s purchase experience by providing convenient options.

20. Offering one-time-use store credit for accessories at checkout

When purchasing a Samsung smartphone from their official website, eligible buyers get a one-time credit of $100 to spend on add-ons or accessories.

This is a genius tactic, as no consumer in their right mind would throw away $100 (the offer expires as soon as you check out), and yet most buyers will likely spend more than $100 to get the accessories they really want, thus increasing their final purchase price.

Frequently Asked Questions (FAQs):

Q: What is cross-selling?

Cross-selling is a marketing technique that encourages customers to purchase additional products related to the ones they have already purchased. It helps increase sales and customer loyalty.

Q: What are examples of cross-selling?

An example of cross-selling could be an online electronics store suggesting accessories for a laptop when a customer purchases it.

Another example could be an online clothing store suggesting a belt when a customer purchases trousers.

Q: What are the benefits of cross-selling?

The main benefit is increased revenue for the eCommerce store, as customers end up buying more than they originally intended to. Additionally, it helps build loyalty by increasing satisfaction and convenience.

Q: How do you implement cross-selling in an eCommerce store?

It’s important to start by understanding your customers’ wants and needs. Then you need to identify which products are related to the one a customer has purchased, and display them strategically on the website.

Offering discounts or promotions on these additional items can help encourage sales. Finally, you need to monitor the effectiveness of your cross-selling efforts and make changes accordingly.

Wrapping up

Cross-selling is an important element to continue and increase revenue, build customer trust, and increase customer retention over time.

We encourage you to experiment with and combine the examples of cross-selling we provided to help improve the customer experience and achieve your business goals.

If you take one thing away from this post, it’s this: don’t be afraid to study the competition or Amazon.

We know that sounds simplistic, but your competitors (especially larger ones) and Amazon have spent hundreds of thousands – perhaps millions – of dollars studying cross-selling psychology and forming best practices.

If those techniques work for them, they’ll very likely work for you. But that doesn’t mean you can’t also be creative and devise your own effective cross-selling strategies.

Good luck, and happy cross-selling!

Accepting ACH payments is another powerful way eCommerce businesses can reduce that dreaded cart abandonment rate.

Let’s face it: if your checkout process is even the slightest bit cumbersome, it will, at best, frustrate your customers or, at worst, drive them to a competitor.

That’s why eCommerce business owners must make the checkout and purchasing process as frictionless as possible.

It’s that age-old challenge of helping buyers feel secure and compliant with payment standards while making the process as simple and easy as possible.

One of the best ways to streamline payment is to offer as many payment methods as possible, including ACH payments.

In this blog post, we will discuss the following:

• What ACH payments are
• How they work
• Why many businesses are using them

We will also explore the benefits of using ACH payments and list some platforms that accept them.

What are ACH Payments?

ACH payments are electronic funds transfers (EFT) that are processed through the Automated Clearing House Network.

ACH payments move money between banks, credit unions, or TPPs (typically credit card processors) electronically. This transfer allows businesses to accept payments from their customers quickly and securely.

Accepting ACH payments is also an excellent way to offer your customers added flexibility and convenience. Alternatively, you can utilize ACH to pull funds from customers if they provide you with the required details of their payment account.

How Do ACH Payments Work?

When a customer initiates an ACH payment, their bank sends a request to the merchant’s bank with the customer’s account information.

The merchant’s bank then verifies that the payment is valid and electronically transfers the funds from the customer’s account to the merchant’s account. If you already accept credit cards, you may be able to accept ACH payments right now.

Most of the time, companies can accept occasional ACH payments from their customers by utilizing their traditional bank accounts. They provide the customer with the account details required, and the customer then initiates the payment for a small fee. 

Also, you may be able to receive ACH payments through banks and credit unions at no cost, but you’ll often be required to pay a fee of $5 to $15 for every incoming transaction. Additionally, these types of payments generally take longer to post to your bank or credit union account.

If you are an eCommerce company or small business and plan on accepting ACH payments frequently or want to allow your customers the convenience of setting up recurring ACH payments without fees, a third-party payment processor could be the answer.

Your company will be charged a small fee, similar to the transaction fees you are charged when you accept credit cards.

Why Many Businesses Choose ACH

ACH payments offer several advantages over other forms of payment, such as credit cards. For starters, ACH payments are typically cheaper to process than credit cards.

In addition, they offer enhanced security, savings opportunities, and greater support for remote teams.

More Benefits of ACH Payments

ACH payments offer several benefits that make them an attractive option for businesses, including:

• Prevents fraud – With ACH payments, the customer’s bank verifies the payment before transferring the funds. This helps to reduce fraud. It also prevents customers from being charged for unauthorized transactions.
• Savings opportunities – ACH payments are typically much cheaper to process than credit cards, which can save businesses money in processing fees.
• Greater support for remote teams – ACH payments allow businesses to collect payments from customers at any time, from anywhere. This makes them especially attractive for businesses with remote teams or customers located in different countries.
• Recurring billing – ACH payments can be set up to process automatically on a regular basis, making it easier for businesses to manage their recurring billing cycles.
• Reduce human error and increase time savings – The automated nature of ACH payments makes it easier for businesses to keep track of transactions, reducing the chance of human error and streamlining their payment processing.
• Security – ACH payments are generally considered more secure than other forms of payment. With the additional layers of security provided by the banks involved in the transaction, customers can rest assured that their private data is safe.
• Lower cost – ACH payments can be much cheaper than traditional payment methods such as credit cards. This makes them an attractive option for businesses looking to keep their costs low.
• Faster processing time – ACH payments are usually processed within a few days, making them faster than other forms of payment.
• Convenience – With ACH payments, customers can make payments from the comfort of their own homes. This makes them an ideal solution for businesses looking to offer a convenient payment option for their customers.

Cost of Accepting ACH payments

The cost of accepting ACH payments varies depending on the provider, but they are typically much cheaper than other forms of payment, such as credit cards.

Many providers charge a flat fee per transaction, while others may offer discounts for higher-volume transactions. In addition, the rates may vary between purchases in person with a card and purchases without a card present online.

To give you a general idea of the cost of ACH payments, Wave charges a flat fee of 2.9% plus $0.60 per transaction. Meanwhile, Braintree charges 2.59% plus $0.49 per transaction, and Square charges 2.9% plus $0.30 per transaction.

ACH Payments vs. Wire Transfers

Wire transfers are similar to ACH payments in that they allow customers to transfer funds directly from one bank account to another. However, wire transfers are typically more expensive and take longer to process than ACH payments. In addition, wire transfers are usually not automated, so customers must manually request each transfer.

Why would buyers be hesitant to transition to digital payments?

Although digital payment methods such as ACH payments offer many benefits, some customers may still be hesitant to transition from traditional forms of payment such as cash or checks.

This can be due to concerns about the security of digital payments or a lack of familiarity with the technology.

Why Would a Business Choose Credit Cards over ACH?

Credit cards may still be the preferred payment method for some businesses as they are widely accepted and offer customers more flexibility in terms of payment options.

In addition, many providers also offer reward programs to incentivize customers to use their credit cards. Still, credit card payments can be significantly more expensive than ACH payments, so businesses should weigh the costs and benefits carefully before making their decision.

Platforms that accept ACH payments

There are several platforms that accept ACH payments, and each one offers different features, such as secure payment processing, convenience for customers and businesses, and discounts on processing fees. It’s important to research each platform to determine which one is the best fit for your business.

Here is some information about some of the more popular options out there to help you decide which can work best for you:

• Wave – Wave is an online invoicing and payment solution that allows businesses to accept ACH payments. The platform offers low processing fees, support for multiple currencies, and the ability to set up recurring payments.
• Square One – This popular choice is a mobile payment platform that accepts ACH payments, as well as other forms of payment. The platform features free account setup, mobile payment options, and secure data storage.
• Braintree – Braintree is a payment gateway that allows businesses to accept ACH payments as well as other forms of payment. The platform offers support for recurring billing, refunds, and secure data storage.
• Zelle – This online money transfer platform allows businesses to accept ACH payments from customers. The platform offers support for multiple currencies, as well as the ability to send and receive money in real time.
• Stripe – Stripe is an online payment processing solution that lets businesses accept ACH payments from customers. The platform features built-in fraud detection, integrated subscription billing, and support for multiple currencies.

How to Get Started Taking ACH Payments

If you are interested in taking ACH payments for your eCommerce business, it is important to research the different payment processors available to find one that best fits your needs.

It is also important to ensure that all security protocols and regulations are followed when processing payments so that personal information remains secure.

Finally, it is important to inform customers about how their payment information will be used, stored, and processed. This can help build trust with customers and may encourage them to make more purchases in the future.

The Breakdown

By accepting ACH payments, you can open up a new revenue stream for your eCommerce business while providing customers with an easy and secure way to make payments. With the right payment processor and the right security protocols in place, you can begin accepting ACH payments with confidence.

However, it’s important to research each provider before making a decision in order to find the best fit for your business. By considering all your options, you can make an informed decision and start accepting ACH payments in no time.

Thankfully, with the powerful and accessible features of modern payment processors, there’s never been an easier time to implement ACH payments as an option for your eCommerce business.

Next Steps: An Inventory Management System

If you are a product-based eCommerce company, you’ll need an inventory management system to ensure that your business is running smoothly.

SkuVault provides easy-to-use Inventory Management Software that’s specially designed for eCommerce businesses.

With powerful features like automated purchase order generation, real-time stock updates across multiple sales channels, and detailed reporting capabilities, you can be sure that your inventory is always on track and your orders are fulfilled quickly and accurately.

To learn more about SkuVault and how our software can help you grow your business, visit our features page or request a demo via the link on this page.

Do you want to improve your eCommerce business’s profitability? Of course, you do! One way to accomplish this is by learning how to calculate and improve your sales margins. 

This helpful formula can tell you how much money your business is making on each product sale. It’s also a helpful reference point to see how your business compares to your peers.

Armed with your profit margin information, you can then tweak your prices and inventory to boost profits and your bottom line. In this blog post, we’ll give a basic overview of the sales margin formula and provide some examples to help clarify how to read and use this data to grow your business. 

The Bottom line is that the higher your sales margin, the more profit your eCommerce business makes.

What is Sales Margin?

Sales margin is the term used to describe the difference between a product’s selling price and its cost price. This figure can be expressed as either a percentage or an absolute value.

The sales margin is a crucial metric for businesses, as it provides an indication of profitability. For example, if a product has a sales margin of 10%, this means that for every $1 the product is sold for, the company makes 10 cents of profit.

Businesses need to make sure that their sales margins are high enough to cover their costs and generate a profit. If margins are too low, it can be challenging to stay in business or to overcome unforeseen business expenses.

There are several ways to increase sales margins. One way is to increase the selling price of products. Another way is to reduce the cost price of products, either by negotiating better deals with suppliers or by finding ways to be more efficient in the production process.

Businesses must strike a balance between maintaining high sales margins and being competitive in the marketplace. If prices are too high, customers will go elsewhere. If prices are too low, businesses may struggle to make a profit.

It is important to remember that the sales margin is just one metric that businesses need to consider when making decisions about pricing and profitability. Other factors, such as manufacturing overhead costs and customer demand, also play a role in setting prices. Ultimately, businesses need to use all the information at their disposal to make decisions that will help them achieve their financial goals.

How do you calculate sales margins?

The formula for calculating sales margin is: 

(Revenue – Cost of goods sold)/Revenue = Sales margin

One common error when calculating the sales margin is failing to include all of the costs that go into making and selling the item when determining the cost of goods sold. You’ll need to include all sales discounts and allowances, the cost of all of the materials required in the production of the goods or service, all payments to employees for producing the product or service, as well as any other expenses, such as a salesperson commission.

Sales Margin Formula Example

Let’s say that you want to sell a new startup coaching service for $100 but aren’t sure if that will yield a good profit. You determine that the cost of the materials needed in the service is $10. And the cost of your time to complete the service is $40. You would calculate your sales margin as follows:

[100 – (40+10)] / 100 = Sales Margin

You would find that your sales margin is 50%.

Sales Margin vs. Gross Profit Margin

Sales margin and gross profit margin are two key metrics that businesses use to measure their profitability. Both measures show how much profit a company makes on each sale but differ in how they calculate this figure.

Sales margin simply takes the total sales revenue and subtracts the cost of goods sold (COGS). This number represents the pure profit that a company makes on each sale before taking into account any other expenses.

Gross profit margin, on the other hand, takes into account all of a company’s expenses, not just the cost of goods sold. To calculate gross profit margin, you take the total sales revenue and subtract the cost of goods sold, as well as all other expenses, such as marketing, administration, and rent.

The main difference between sales margin and gross profit margin is that sales margin only considers the cost of goods sold, while gross profit margin takes into account all expenses. This means that gross profit margin is a more accurate measure of profitability.

However, both measures are useful for different purposes. Sales margin is an excellent metric to use if you want to see how much profit a company makes on each sale. Gross profit margin is a better metric to use if you want to see the overall profitability of a company.

Which metric you should use depends on your specific goals and objectives. If you’re trying to optimize profitability, then gross profit margin is the metric you should be focusing on. If you’re trying to increase sales, then sales margin is the metric you should be focusing on.

No matter which metric you use, it’s important to track both measures over time to see how your business is performing. By monitoring these metrics, you can make changes to your business model and improve your profitability.

Margin vs. Markup

Margin is the difference between your selling price and your cost of goods sold (COGS). For example, if you sell a product for $100 and it costs you $60 to make, your margin is $40. Margin is usually expressed as a percentage of the selling price, so in this case, your margin would be 40%.

Markup is the difference between your cost of goods sold and your selling price. For example, if you sell a product for $100 and it costs you $60 to make, your markup is $40. Markup is usually expressed as a percentage of the COGS, so in this case, your markup would be 67%.

So, what’s the difference between margin and markup? Margin is the portion of the selling price that is profit, while markup is the portion of the COGS that is profit.

There are a few things to consider between margin and markup. 

First, the margin is typically easier to calculate since you need to know your selling price and COGS. Markup, on the other hand, requires you to know both your selling price and your competitor’s prices, which can be challenging to track.

Second, margin takes into account the total cost of the product, including shipping and other costs, while markup only considers the COGS. This means that margin is a more accurate measure of profit.

Third, your margin is more stable than markup. For example, if your COGS go up 10%, your margin will also go up 10%. However, if your markup is 10% and your COGS go up 10%, your markup will only go up to 11%. This means that your margin is less likely to fluctuate in response to changes in the market.

Finally, your margin is a better measure of profitability than markup. This is because margin considers the total revenue of the product, while markup only considers the COGS. This means that margin gives you a better idea of how much profit you’re actually making on a product.

What is a Good Profit Margin for my eCommerce Business?

There’s no simple answer to the question of what is considered a good profit margin for an eCommerce business. It depends on several factors, including the type of product or service you’re selling, your operating expenses, and the amount of competition in your market.

That said, as a general rule of thumb, most businesses aim for a profit margin of between 10 and 20%. If you’re selling more expensive products or services, your margin may be on the lower end of that range. If you’re selling lower-priced items, your margin may be on the higher end.

Of course, ultimately, the goal is to make as much profit as possible. So, if you can find ways to increase your margin while still providing a great product or service to your customers, you’ll be in good shape.

There are a number of strategies you can use to increase your profit margin. One is to focus on selling higher-priced items. Another is to reduce your operating expenses. And, of course, you can always try to negotiate better terms with your suppliers.

No matter what, though, remember that your goal should be to create a business that is sustainable and profitable in the long run. Don’t sacrifice long-term profitability for short-term gains. Focus on creating a solid foundation for your business, and the profits will follow.

What is the Difference Between Gross and Net Profit Margins?

In business, gross profit margin and net profit margin are two critical measures of profitability. Gross profit margin is a measure of a company’s overall efficiency in generating revenue, while the net profit margin is a measure of how much of that revenue the company actually keeps after all expenses are paid.

Gross profit margin = (revenue – costs of goods sold) ÷ revenue

Net profit margin = (revenue – all expenses) ÷ revenue

Generally speaking, a higher gross profit margin is better than a lower one, and a higher net profit margin is better than a lower one. However, it’s important to remember that these measures can be affected by a number of factors, including the industry in which a company operates, the mix of products and services it sells, and its overall business strategy.

A company with a high gross profit margin but a low net profit margin might be pricing its products too low, for example, or might be spending too much on marketing or other expenses. Conversely, a company with a low gross profit margin but a high net profit margin might be charging too much for its products or might be selling products with very low margins.

In short, gross and net profit margins are both necessary measures of profitability, but they tell different stories about a company’s business. A comprehensive analysis of a company’s financial statements will take both of these measures into account.

Can Profit Margin be Too High?

When it comes to business, profit margins are everything. A high-profit margin means that a company is making a lot of money off of each sale and is therefore doing well financially. However, there can be such thing as a profit margin that is too high.

A business with a very high-profit margin may be viewed as greedy by consumers, and this can lead to bad publicity. 

Martin Shkreli, a former pharmaceutical executive known for raising the price of a life-saving drug by 5,000%, faced significant public backlash and did jail time for raising the price of Daraprim, an antiparasitic medication often used by patients with suppressed immune systems. In addition to being required to forfeit the profits from the Daraprim price hike, the BBC and others dubbed him “the most hated man in America.”

Additionally, a business with a high-profit margin may be less likely to reinvest its profits back into the company, which can lead to stagnation.

Overall, a business needs to strike a balance when it comes to its profit margin. Making too much money off of each sale can be just as bad as making too little. Therefore, companies need to be mindful of how much profit they are making and ensure that they are not alienating their customers in the process.

Gross Margin Formula: How do you calculate profit margins?

There are a few different ways to calculate gross profit margins, but the most common method is to take the total revenue from your company’s sales and subtract the cost of goods sold (COGS). This will give you your gross profit, which you can then divide by your total revenue to get your gross profit margin percentage.

For example, let’s say your eCommerce business had $100,000 in sales last month, and your COGS was $60,000. This means your gross profit would be $40,000 ($100,000-$60,000). To calculate your gross profit margin percentage, you would take your gross profit ($40,000) and divide it by your total revenue ($100,000), giving you a gross profit margin of 40%.

Gross margin formula: 

Sales – COGS = Gross Profit Margin

Gross Profit Margin ÷ Total Revenue = Gross Profit Margin Percentage

It’s important to note that your COGS should include all direct costs associated with producing and selling your product or service. This includes things like raw materials, manufacturing costs, labor costs, shipping and handling, and any other direct costs.

How to Calculate Your Net Profit Margin

One thing to keep in mind is that your gross profit margin isn’t the same as your net profit margin. Your net profit margin is your total profits (revenue minus all expenses) divided by your total revenue. So, if you had $100,000 in sales and your COGS was $60,000, but you also had $20,000 in other expenses (like marketing, rent, etc.), your net profit would be $20,000 ($100,000-$60,000-$20,000). This means your net profit margin would be 20%.

Analyzing the Profit Margin Formula

You can use gross profit margins to compare your business to others in your industry. For example, if the average gross profit margin in your industry is 50%, but your business is only at 40%, that could be an indication that you need to reevaluate your pricing or find ways to reduce your costs.

Gross profit margins can also be a helpful tool for managing inventory. For example, if you know that your gross profit margin on a product is 50%, you can use that information to help you make decisions about how much inventory to keep on hand. If you have $10,000 worth of a product in inventory and your goal is to maintain a 50% gross profit margin, then you know that you need to sell the product for at least $20,000 in order to reach your goal.

FAQs About Sales Margins

Below you’ll find some of the most commonly asked questions eCommerce businesses ask us about their profit margins.

Are sales margin and profit margin the same?

Your sales margin and profit margin are not the same. Sales margin is the percentage of sales that is left after the cost of goods sold is deducted, while your profit margin is the percentage of revenue that is left after all expenses are deducted. In other words, your company’s profit margin is a measure of profitability, while its sales margin is a measure of how much of each sale is left after the cost of goods sold is deducted.

The sales margin is important because it measures how much of each sale is left after the cost of goods sold is deducted. This information can be used to make pricing decisions and evaluate the profitability of a business. Profit margin is important because it measures the amount of revenue that is left after all expenses are deducted. This information can be used to make decisions about how to allocate resources and assess the financial health of a business.

How do you Calculate Sales Margin in Excel?

Your Sales margin is one of the most important financial metrics for businesses. It tells you how much profit you’re making on each sale and can be a key indicator of your company’s health.

Fortunately, calculating your company’s sales margin is relatively simple, especially if you’re using Microsoft Excel. Below, we’ll walk you through the steps to do just that.

1. First, you’ll need to create a new worksheet in Excel. 
2. Next, enter your sales data into the first column. This data can be pulled from your company’s accounting software or manually entered if you keep track of your sales figures manually.
3. Once you have your sales data entered, you’ll need to calculate your cost of goods sold (COGS). This figure includes the cost of materials, labor, and any other expenses that go into producing your product or service.
4. You can find your COGS by reviewing your company’s financial statements or by speaking with your accounting department. Once you have your COGS figured out, divide it by your total sales revenue.

This will give you your sales margin percentage. To get your margin dollar amount, multiply your sales margin percentage by your total sales revenue.

For example, let’s say your company had $100,000 in sales last year, and your COGS was $60,000. This would give you a sales margin percentage of 40%. To get your margin dollar amount, you would multiply 40% by $100,000 for a total of $40,000.

This process can be easily automated in Excel using a simple formula. In the cell next to your last sales figure, enter the following formula: =SUM(COGS/sales revenue).

This will give you your sales margin percentage in that cell. To get your margin dollar amount, simply multiply that figure by your total sales revenue.

Calculating your sales margin is a crucial part of running a successful business. By using Excel, you can make this process quick and easy.

Final Thoughts

Margins are an important measure of success for any business and can be the difference between a thriving company and one that’s barely scraping by. 

Luckily, with a solid understanding of how to calculate margins and some thoughtful strategizing, you can make sure your eCommerce business has healthy profit margins and is on track for long-term success. 

If you want help getting started or would like more information on how to manage your inventory more efficiently to increase your profit margins, contact SkuVault. We’re here to help you boost your bottom line so you can focus on what you do best: running your business!

As an eCommerce business owner, you may see stacks of orders coming in and shipments going out the door without much visibility into what that actually means for your bottom line.

In today’s fast-paced business climate, it’s hard to keep a pulse on business performance when you’re in the thick of your busy season. 

Thankfully there are a couple of handy business calculations that you can use to ensure you’re on track, namely the profit percentage formula. 

In this blog post, we’ll walk you through the profit percentage formula and give you some examples of how to apply it to your business. By the end, you’ll have a clear understanding of how to measure your company’s success!

What is the Profit Percentage Formula?

The Profit Percentage Formula is a simple way to calculate how much profit you’re making on a sale. It’s important to know your profit margins so that you can price your products accordingly and make a decent profit to continue to grow your business.

Profit percentage = (Sale price – Cost of goods) / Sale price

In the above formula, the sale price is whatever the cost is for a consumer to purchase a good or service. It’s essentially the final retail price of a good. This differs from a product’s cost price, which is the amount of money it takes to produce a good or service before any markup or margin is added.

Let’s say you’re selling a widget for $10, and it costs you $5 to make. Your profit percentage would be:

Profit percentage = ($10 – $5) / $10

Profit percentage = 50%

So, for every widget you sell, you’re making a 50% profit. 

Now, let’s say you want to increase your profit margin. You could do this by either increasing the sale price or decreasing the cost of goods sold. Let’s say you increase the sale price to $12. Your new profit percentage would be:

Profit percentage = ($12 – $5) / $12

Profit percentage = 58.3%

So, by increasing the sale price by $2, you’ve increased your profit margin by 8.3%. Not bad!

Now let’s say you want to decrease your cost of goods. You could do this by finding a cheaper supplier or by making more efficient processes. Let’s say you’re able to decrease your cost of goods to $4. Your new profit percentage would be:

Profit percentage = ($10 – $4) / $10

Profit percentage = 60%

So, by decreasing your cost of goods by $1, you’ve increased your profit margin by 10%.

As you can see, the Profit Percentage Formula is a simple way to calculate your profit margins. While it shows you how you are doing today, it also shows how changing either the sale price or the cost of goods can have an impact on your profit percentage.

What is Profit Margin?

Profit margin is a measure of how much profit a specific company makes on each sale. It is calculated by dividing net income by revenue. Net income is the total amount of money a company has earned after all expenses have been paid. Revenue is the total amount of money that a company has earned from sales.

Profit margin is important because it measures how much profit a company makes on each sale. It is a good way to compare different companies and see which ones are more efficient at making money.

A profit margin is an example of a margin, which is not the same as a product markup which is a different type of calculation. See the difference between markup vs. margin in our related blog post.

Let’s look at an example. Let’s say that Company A has a net income of $100,000 and revenue of $1,000,000. Company B has a net income of $50,000 and revenue of $500,000. Company A’s profit margin is 10%, and company B’s profit margin is 10%.

This means that company A makes $10 in profit for each $100 of sales while company B only makes $5 in profit for each $100 of sales. Company A is more efficient at making money than company B.

There are a few things to keep in mind when looking at your profit margin. 

• Higher profit margins are not always better. A company with a high-profit margin may be doing well now, but it might not be able to sustain that level of profitability in the future.
• Profit margin varies by industry. Some industries have higher profit margins than others. For example, the profit margin for companies in the tech industry is typically higher than that for retail companies.
• Profit margin can be affected by one-time items. For example, a company might sell a piece of property for a one-time purchase. This would increase the company’s profit margin for that year, but it is not something that would happen every year.
• Profit margin is just one metric to look at when evaluating a company. It should be considered along with other metrics such as revenue growth, operating expenses, and cash flow.
• Profit margin is a measure of how much profit a company makes on each sale. It is not the same as net income or revenue.

Net income is the total amount of money that a company has earned after all expenses have been paid. Revenue is the total amount of money that a company has earned from sales. Your profit margin is the percentage of net income that your company keeps as profit.

Using Profit Margin

Profit margin is a good way to compare different companies and see which ones are more efficient at making money. However, it is just one metric to look at when evaluating your business. It should be considered along with other metrics such as revenue growth, operating expenses, and cash flow.

What is Gross Profit Percentage?

Gross profit percentage is a key metric for eCommerce businesses. It tells you the percentage of revenue that is left after accounting for the cost of goods sold. 

The Importance of Understanding Gross Profit Percentage

This metric is important because it allows you to see how much profit you are making on each sale and can help you make decisions about pricing, inventory, and other aspects of your business.

How to Calculate Gross Profit Percentage

To calculate gross profit percentage, you will need to know two things:

• Gross profit
• Total revenue

Your gross profit is the difference between your total revenue and the cost of goods sold. To calculate this, you will need to know the cost of each item you sell and the number of items you sold.

Your total revenue is the total amount of money you make from sales. To calculate this, you will need to know the price of each item you sold and the number of items you sold.

Once you have these two numbers, you can calculate your gross profit percentage by dividing your gross profit by your total revenue.

For example, let’s say you sold 100 dongles at a price of $10 each. The cost of each item was $5, so your gross profit would be $500 (100 dongles x $5 gross profit per item). Your total revenue would be $1,000 (100 items x $10 price per dongle). This means that your gross profit percentage would be 50% ($500/$1,000).

This example shows why gross profit percentage is such an important metric for eCommerce businesses. It provides a clear picture of how much profit you are making on each sale and can help you make decisions about pricing, inventory, and other aspects of your business.

If you are not sure how to calculate gross profit percentage, there are many online calculators that can help. Just search for the “gross profit percentage calculator,” and you will find a number of options.

Final Thoughts

The Profit Percentage Formula is a valuable tool for business owners and managers to calculate how much profit they are making on each product or service. 

By understanding the components of the formula and using it with accurate data, eCommerce business owners can make informed decisions about pricing, production, and forecasting. 

If you’re an online business owner who wants to start selling toys and games, or just someone looking to start a side hustle, you’re in luck! 

This post will provide a step-by-step guide on how to do just that. 

But first, let’s take a look at some of the benefits of selling toys and games online. 

Benefits of selling toys and games online

One of the significant benefits is that this sector is growing rapidly. In fact, global toy sales are currently valued at $305 billion U.S. and are expected to grow to $405 billion by 2026. So, if you want to tap into this lucrative market, selling toys and games online is the way to go. 

Another benefit is that entry into this selling niche, especially for those considering selling used toys online, is that you don’t need to invest a significant amount of money in starting inventory. Your online toy sales business can grow as you grow.

That said, there are a few pitfalls along the way that you’ll want to avoid.

So without further ado, let’s get started with our guide to selling toys and games online.

How to sell toys and games online

Thanks to the internet, selling toys and games online is easier than ever before. But how can you ensure that your toys and games stand out from the competition? 

Here are a few tips:

1. Focus on quality. There are a lot of toys and games on the market, so make sure that yours are well-made and entertaining. If your products are superior, customers will be more likely to buy them.
2. Offer a great selection. Don’t just sell one type of toy or game – offer a variety of products so that customers can find exactly what they’re looking for. That said, it’s a solid strategy to keep your toys specific to a particular niche – focusing your business on baby toys, 80s video games, educational toys, toys for kids with sensory issues, or the many, many types of Legos, for instance.
3. Provide excellent customer service. If you treat your customers well, they’ll be more likely to come back to you in the future.

By following these tips, you can make sure that your online toy business is a success.

Is it profitable to sell toys online?

In recent years, online retail has become a significant force in the toy industry. Thanks to the ease and convenience of online shopping, more and more people are purchasing their toys online. But is it actually profitable to sell toys online?

The answer may surprise you. While it’s true that there are some challenges to selling toys online, there are also a number of advantages. 

For one thing, online retail provides a global market for toy sellers. This means that you can reach a larger audience with your products than you would if you were selling through brick-and-mortar stores. 

Additionally, selling toys online allows you to bypass the traditional wholesale channel and sell directly to consumers. This can help you to avoid markups from intermediaries and ultimately earn a higher profit margin on your sales.

Of course, running an online toy store is not without its challenges. 

The biggest challenge is shipping costs. Shipping heavy or bulky items can be expensive, and this expense is often passed on to your customer in the form of higher prices. One way to get around this is to make sure you set the best shipping costs for your business. 

Additionally, competition in the online toy market is fierce, and you’ll need to work hard to make your store stand out from the crowd. 

However, if you’re willing to put in the effort, selling toys online can be a very profitable business venture.

Seven things to consider before starting your online toy business

eCommerce store owners in the toys and games space sell a wide range of toys and hobby-related products, including both new and used toys. 

These may include traditional toys, video games, action figures, board games, various hobby kits, Legos, arts and crafts supplies, and more. 

With so many toy and game options to choose from, you’ll want to consider these seven factors before starting your business. 

Decide between used toys, new toys, or both.

Do you plan to sell new toys, used toys, or a combination? Where will you source your inventory? What will your profit margins be?

Business setup

How do you intend to set up your new business, and what are the requirements in your state?

Will you be a sole proprietor? An LLC? A partnership? 

Will you need a tax license to sell online in your state?

Marketing

How do you plan to market your online toy store? What is your budget for marketing, and how will that impact your profit margins?

Marketplaces

What eCommerce marketplaces, if any, will you sell your toys on?  

Or will you sell exclusively on your own website and social media? Not sure the difference? Check out our resource on eCommerce websites vs. marketplaces.

Inventory

Are you planning on storing your inventory or dropshipping them? If you’re planning on storing your own inventory, do you have enough space, or will you need to get warehouse space? If it’s the latter, you may consider inventory management software to keep track of your growing collection of products.

Pro-Tip: See our resource on dropshipping for beginners to avoid crucial mistakes when you get started.

Expenses

How will you track and manage your expenses to ensure your business is profitable? 

How long will you give your startup to be in the red before you expect it to turn a profit? Three months? Six months? Two years?

Software

What technology will you need to run your business? Depending on the size or scale of your business, you may need software to help you keep track of inventory, ship products, optimize your online listings, and manage your finances.

Selling Used Toys

Believe it or not, used toys can be very profitable – provided you have the right strategy. 

For starters, you’ll need to find a niche market. Are you selling dolls, action figures, or stuffed animals? 

Each of these categories has its own dedicated fanbase, and you’ll need to know which one you’re targeting. 

Once you’ve decided on your market, it’s time to start sourcing inventory. 

Don’t worry – you don’t have to scour garage sales for hours on end. (Although this can certainly be one way to snag some fantastic inventory for pennies.) 

Many websites specialize in selling used toys, and they’ll often offer bulk discounts. 

Finally, it’s essential to set realistic prices. Used toys won’t generally sell for as much as new ones unless they’re collectible – but you can still make a tidy profit if you price them correctly and leverage nostalgia. 

Selling used toys can be very profitable, provided you use an effective strategy. 

Where do I find used toys to sell?

If you’re in the market for used toys, a few options are available. 

One option is to purchase them from a local consignment shop. 

Another option is to find them at garage sales or online auctions. 

Finally, you can always try your luck at the local thrift store. 

Whichever route you decide to take, be sure to scrutinize the condition of the toys before making a purchase. Used toys should be free of any damage or wear and tear, and all parts should be accounted for. 

With a little bit of effort, you should be able to find some great used toys that will be perfect for reselling online.

Which used toys sell best?

It’s essential to understand what buyers are looking for. While certain toys (like branded dolls and action figures) will always be in high demand, others (like toy cars and building blocks) tend to have more appeal to collectors.

 In general, the best-selling used toys are those that are either brand new or in excellent condition. That said, even lightly-used toys can find a home if they’re priced competitively. 

So whether you’re hoping to unload some old favorites or turn a profit on last year’s holiday gifts, there’s a good chance you can find a buyer for your used toys online.

How much should I charge to sell used toys and games?

When it comes to selling used toys and games, the sky’s the limit – or is it? 

There are a few factors to consider when setting a price for your gently-used wares. 

First, take into account the condition of the item. Is it in good condition, with all pieces intact? Or is it missing a few key components? 

Second, think about how popular the item is – is it a timeless classic that will always be in demand? Or is it a fad that has already come and gone? 

Third, consider your target audience. Are you selling to collectors who are willing to pay top dollar for rare finds? Or are you selling to parents who are looking for a bargain? 

Finally, remember that vintage and antique toys generally sell at a higher price, depending on how rare, old, or popular they are. And, if you’re not quite sure how to price an unusual item, you can always check with your online competitors to see how they’re pricing similar items.   

Once you’ve considered all of these factors, you’ll be better positioned to set a fair and reasonable price for your used toys and games.

Selling new toys online

Where to find new toys to sell

If you’re in the business of selling toys, it’s important to keep your inventory fresh and up-to-date. But where do you find new toys to sell? There are a few different options:

Wholesale toy companies: These companies specialize in manufacturing and selling toys. You can usually find a good selection of wholesale toy companies online.

Toy stores: Many toy stores have clearance sections where you can buy toys at a discount. This is a great way to find new toys to sell without spending a lot of money.

Manufacturer closeouts: Sometimes, manufacturers will sell their excess inventory of toys at a discount. This is a good option if you’re looking for specific types of toys.

Online auctions: Online auction sites like eBay are great places to find new and used toys. Just be sure to do your research before bidding on anything!

With a little bit of effort, you should have no trouble finding new toys to sell. Just remember to stay up-to-date on the latest trends so you can offer your customers the best selection possible.

Which new toys sell the best?

Are you wondering which new toys sell best? The answer, of course, depends on the age of the child. 

For toddlers, the top-selling toys tend to be simple and durable, like plush animals or building blocks. 

For elementary schoolers, favorites include anything that lights up or makes noise, from lasers toys to musical instruments. 

As kids get older, they become more interested in games and devices that allow them to interact with their friends, like video game consoles or social media applications. 

And for teenagers, the hottest items are often the ones that allow them to express their individuality, like makeup kits or fashion accessories. 

Ultimately, the best way to find out which new toys are selling best online is to ask your child what they want. After all, they’re the experts.

What requirements are there to get an inventory of new toys and games?

Before you can set up shop and start selling the latest and greatest toys and games, you’ll need to acquire an inventory. The good news is that there are a few different ways to go about this, and there’s certainly no shortage of options when it comes to what kinds of products you can sell. But before you can start stocking your shelves, you’ll need to meet a few requirements.

For starters, you’ll need to obtain a business license. This will vary depending on where you’re located, but generally speaking, you’ll need to fill out some paperwork and pay a fee. Once you have your license, you’ll be able to apply for a wholesale account with toy manufacturers and distributors. 

In most cases, they’ll require you to have a business license and tax ID number before they do business with you. However, once you’re approved, you’ll be able to purchase inventory at a discounted rate.

Of course, if you don’t want to go the traditional route, there are always other options. 

You could try contacting local toy stores and asking if they’d be interested in selling their overstock inventory to you at a discount. Or, if you’re feeling really ambitious, you could even try manufacturing your own line of toys. 

Whichever route you decide to go, just make sure that you have all of the necessary requirements taken care of before moving forward. 

How much should I charge for new toys?

There’s no one answer to this question – it all depends on your toys, your target market, and your business goals. 

However, there are a few things to keep in mind when setting prices for new toys. First, consider the cost of manufacturing and shipping the toys. You’ll also want to factor in any applicable taxes or fees. Then, set a price that will allow you to make a profit while still being competitive with other retailers.

Finally, don’t be afraid to experiment – you can always adjust your prices based on how well the toys sell. The most important thing is to get started and start making money!

Which is more profitable, selling used or new toys?

The world of online retail is a competitive one, and toys are no exception. When it comes to profitability, the answer to the question “used or new?” is not always clear-cut. 

In general, selling used toys is more profitable than selling new ones. Used toys generally sell for a lower price than their brand-new counterparts, but they also tend to have a higher markup. 

That said, there are certain circumstances where selling new toys can be more profitable. 

For example, sellers can charge a premium price if a new toy is in high demand but in short supply. In the end, it all comes down to supply and demand. 

By keeping an eye on trends and staying flexible, online retailers can maximize their profits regardless of whether they’re selling used or new toys.

Final Thoughts

The toy and game industry is growing rapidly, with no signs of slowing down. 

If you’re looking for a profitable business opportunity, selling toys and games online may be just what you’re searching for. 

It’s clear that there are many different ways to sell toys and games online, and which options you choose will depend on your business goals, the products you’re selling, and your target market. 

With careful planning and execution, these methods can help you to be successful in generating profits for your online toy business. 

The world of eCommerce marketing automation is incredibly vast, with dozens of vendors, thousands of automation opportunities, and nearly infinite variables.

Automation is one of the best ways to get your time back and focus on what’s most important while eliminating busy work. But where do you start?

With so many different platforms on the market, it can be hard to determine which one is right for you. 

This article will outline the 21 best eCommerce marketing automation platforms and help you decide which is right for your business. 

We’ll also discuss the benefits of marketing automation and how to choose the platform that best suits your business needs.

Let’s jump in!

Act-On

The company behind Act-On claims that the platform was created by marketers for marketers. Act-On is popular with large companies because its marketing integrations allow them to engage with their customers more effectively. 

Features like email automation, landing page optimization, and web form creation save time and improve efficiency. Easy integrations with popular eCommerce tools make it easy for users to get the most out of the software.

Why Choose Act-On?  

• Open API: Act-On integrates seamlessly with popular sales and marketing tools like Zoom, GoToWebinar, and Salesforce.
• Excellent customer support: Act-On has an excellent reputation for providing timely and accurate technical assistance to customers. 

Who Uses Act-On?

Act-On is marketed to companies of all sizes, but it is most commonly used by businesses that generate at least $10 million in revenue each year. 

This is likely because Act-On does not offer a budget alternative for small businesses.

ActiveCampaign

ActiveCampaign is a hit with small businesses because it offers email and digital marketing automation at prices that start at just $29 per month.

The more popular Enterprise package adds features like business CRM and eCommerce integration for $149 per month, which is still a pretty good deal.

Some popular eCommerce platforms will work with ActiveCampaign right out of the box, but you will have to use software like Zapier or Revenue Conduit if you want to share data with platforms like StoreEnvy or BigCartel.

Why Choose ActiveCampaign? 

• Prebuilt automation recipes: ActiveCampaign has automated recipes that automatically send emails when customers abandon shopping carts or behave unexpectedly.
• API integration: ActiveCampaign has been designed to work with eCommerce platforms, including Magento, Shopify, BigCommerce, and Stripe.

Who Uses ActiveCampaign?

Most ActiveCampaign users are small or medium-sized businesses that want to enjoy the benefits of marketing automation for a modest investment. The packages on offer should satisfy the needs of businesses with 25,000 or fewer contacts to manage.

Bluecore

Bluecore is aimed squarely at eCommerce retailers that want to turn visitors into repeat customers. Bluecore does not offer as many integrations as some other popular sales automation solutions, but it makes up for this shortcoming with some of the most advanced predictive modeling features available.

Why Choose Bluecore?

• Predictive models: Bluecore offers retail-specific predictive modeling that allows users to create campaigns based on the likelihood to respond and take action, product affinity, lifetime value, and lifecycle stage.
• Cross-channel marketing: Bluecore users can assign multiple sales channels to each campaign.

Who Uses Bluecore?

Bluecore offers custom solutions, so you won’t find any prices listed on the company’s website. Bluecore’s client list features some of the biggest names in eCommerce, which suggests the solution is used mainly by large companies.

Bronto

Bronto is backed by the software behemoth Oracle, so you know the technology under the hood is cutting edge. The platform includes several innovative features, including a cart recovery option that monitors customer activity every 30 seconds. When shopping carts are abandoned, the software initiates a customized series of messages.

A study from Baymard Institute found that shopping cart abandonment rates across all eCommerce industries landed just under 70%, so that’s a big deal.

Why Choose Bronto? 

• Drag-and-drop interface: Oracle has responded to complaints about the Bronto interface by adding an intuitive drag-and-drop interface.
• Designed to improve engagement: Bronto’s tools were specifically designed to help retailers use the information they collect to improve customer engagement and build relationships.

Who Uses Bronto?

Bronto is marketed as a premium solution backed by one of the tech industry’s biggest names, so this is not an option for those in search of a deal.

This is a platform for companies that want the best and are willing to pay for it.

Cloudsponge

Cloudsponge is a cloud-based address book that allows users to import contact information from popular webmail providers like Gmail and Yahoo. 

The service also includes an API that makes it easy for developers to integrate the functionality into their own applications.

Why Choose Cloudsponge?

• Address book integration: Cloudsponge makes it easy to import contact information from popular webmail providers like Gmail and Yahoo.
• API integration: Cloudsponge’s API makes it easy for developers to integrate the functionality into their own applications.

Who Uses Cloudsponge?

Cloudsponge is used by a wide range of businesses, including eCommerce retailers, publishers, and charities.

Dotdigital

The company behind Dotdigital, which used to be called Dotmailer, has been offering email automation solutions since 1999.

Dotdigital offers campaign orchestration features to users with multiple sales channels to manage, and its segmentation options allow messages to be customized based on customer behavior or demographics.

Why Choose Dotdigital? 

• Personalization tools: Dotdigital includes several personalization tools that can be used to simplify workloads and improve customer engagement.
• Easy to use: Dotdigital is one of the most powerful sales automation platforms on the market. It is also one of the easiest to use.

Who Uses Dotdigital?

Dotdigital has more than 70,000 users around the world, so it is safe to say that this platform is popular with businesses of all sizes.

No prices are listed on the Dotdigital website, so you will have to contact the company directly if you would like a quote or want to schedule a free demonstration.

Drift

Drift is a relatively new sales automation solution that offers businesses a way to start conversations with their website visitors.

Drift chat boxes can be opened with a click by visitors with questions, or they can be triggered by certain behavior. Customers can use the Drift boxes to ask questions, and retailers can use them to offer incentives.

Why Choose Drift?

• Timely messaging: Drift chat boxes appear at crucial times, which means they can be customized with coupon codes or other offers that could encourage hesitant customers to buy.
• Conversation reports: Knowing what questions customers ask before they do or don’t buy can help retailers to identify information gaps and craft more effective messages.

Who Uses Drift?

Drift was originally marketed as a business-to-business eCommerce solution, but it is now just as popular among business-to-consumer online retailers.

The website mentions a free trial version, but you will have to contact a customer service representative if you want to take advantage of the offer.

Drip

Drip is an email automation tool that was designed with online retailers in mind. It integrates with popular eCommerce tools like WooCommerce, Shopify, and Magento without bridging software, and its dynamic workflow tools allow users to map out complex automations visually.

Using Drip could not be easier. Prebuilt automations can be downloaded and shared with a single click, and reports can be generated with just a few clicks.

Why Choose Drip? 

• Drag-and-drop interface: Drip’s interface has straightforward controls and drag-and-drop functionality to make getting to grip with the software a much less stressful experience.
• Marketing funnel maps: This platform can use visitor data to create marketing funnel maps that add a striking visual element to reports and meeting materials.

Who Uses Drip?

Drip is used primarily by small to medium-sized online retailers. The entry-level package is quite affordable, but it only allows 2,500 contacts to be managed.

EngageBay

While some sales automation solutions focus on niche features like CRM integration or conversation marketing, EngageBay strives to give eCommerce companies everything they need in one application.

The platform can automate email campaigns, manage tickets and coordinate multiple sales channels. Plus, its landing page design features include chat boxes that improve user engagement and give retailers another conversion opportunity.

Why Choose EngageBay? 

• A complete solution: eCommerce companies that use EngageBay save money because the platform provides everything they need.
• Simplicity: EngageBay’s designers put a lot of effort into creating a simple interface that users can become comfortable in just a few minutes.

Who Uses EngageBay?

EngageBay is used by eCommerce companies of all sizes because it is capable and extremely affordable.

Companies that want to give this platform a test drive can opt for a free version that includes core features and can be used to manage up to 500 contacts, and those ready to make a commitment can manage unlimited contacts and enjoy every benefit EngageBay has to offer for less than $80.

HubSpot

HubSpot is a leader in the sales automation field because it got to the party early with a simple solution that is easy to use.

HubSpot is a complete solution that can automate email marketing campaigns, build, optimize and publish landing pages, manage blogs and create custom reports, and it is one of the few sales automation platforms that offer a lead-scoring feature.

Why Choose HubSpot? 

• Full feature set: HubSpot offers a full set of sales automation, campaign management, and reporting features that give eCommerce retailers everything they need to succeed.
• Seamless integration: HubSpot is extremely popular because it integrates seamlessly with leading eCommerce tools. HubSpot engineers can also create custom integrations for a small fee.

Who Uses HubSpot?

HubSpot offers a free version with core features but limited functionality, and most HubSpot users are small or medium-sized firms that decided to invest in the platform after taking advantage of this trial offer.

Companies with tens of thousands of contacts to manage can expect to pay several hundred dollars each month to use HubSpot, but the popularity of the program suggests that this is money well spent.

Hunch

Hunch is an eCommerce tool for brands and advertising agencies that combines creative image and video production with automated ad buying. 

The platform is primarily used to produce visually stunning ads, place them on popular social media platforms like Facebook and Instagram and track the results.

Hunch claims that its platform saves agencies and brands valuable time and improves conversion rates by 25%.

Why Choose Hunch? 

• Personalization: Personalization filters allow Hunch users to target video and photo ads based on factors including user behavior, location, language, and weather conditions.
• Ad testing: Hunch allows users to test various creative approaches to find out which message resonates best with customers.

Who Uses Hunch?

Hunch is most commonly used by advertising agencies because it can automatically create captivating content and book ads.

Companies that do not place their own ads will not be able to use all this platform’s features, but that should not put them off if a large percentage of their site traffic comes from social media.

Keap

Keap frees creative talent from repetitive tasks and automates customer tracking and lead generation.

Core Keap features include email automation, ROI tracking, landing page creation, and social media management, and eCommerce companies have several packages to choose from. The most feature-packed package, which is called Max Classic, was originally branded as InfusionSoft.

Why Choose Keap? 

• Training included: Getting up to speed with keap is rarely a challenge because online training is included with every subscription.
• Flexible pricing: Keap’s subscription packages can be structured to manage a specified number of contacts, which means users only pay for the performance they need.

Who Uses Keap?

Keap is used mainly by smaller eCommerce companies that have small mailing lists to manage and want a full set of features at a reasonable price.

Kevy

Kevy is one of the fastest-growing sales automation providers because it offers an abundance of personalization options, hands-free automation, and AI-generated consumer insights.

The platform offers pretty much everything that a successful eCommerce company would need, including abandoned cart campaigns, email editors, advanced reporting features, and several segmentation options.

Kevy is also based on Javascript, which means it will work with virtually all of the most popular business apps.

Why Choose Kevy? 

• Google Analytics integration: Kevy’s reporting features provide the last word in reliable and useable data because they integrate seamlessly with Google Analytics.
• Single-use coupons: Ecommerce retailers that wish to deliver messages to customers at precise moments can use Kevy to create single-use coupons or targeted popup ads.

Who Uses Kevy?

Kevy is used by online retailers that like to take a proactive approach with popup ads and coupons.

The platform’s pricing model is based on contacts, so it may not be attractive to large companies that manage enormous mailing lists.

Klaviyo

Klaviyo is an automated email solution that offers advanced customization and tracking features.

The platform analyzes what website visitors do, then automatically sends them emails based on their behavior.

Klaviyo can handle in-app notification and SMS campaigns, but email marketing is its core strength.

Why Choose Klaviyo? 

• Ideas section: Even the most talented creatives need inspiration sometimes, so Klaviyo includes an email ideas section to encourage outside-the-box thinking.
• Visitor tracking: Ecommerce retailers that want to know what their visitors are interested in may like Klaviyo’s landing page snippet that keeps track of what they read.

Who Uses Klaviyo?

Klaviyo is used by businesses that want results fast. The platform includes dozens of email and campaign templates that can be customized with a few clicks and sent out in minutes. 

Plus, their API interface makes importing lists a snap.

MailChimp

Most people think MailChimp is just an email marketing app, but the platform actually offers a comprehensive range of features, including CRM integration, behavioral targeting, website design, and channel management. 

Segmentation options are notably missing, but MailChimp’s Analytics360 module makes up for this oversight with sophisticated tracking tools like click maps.

Why Choose MailChimp? 

• Huge support database: MailChimp is used by tens of thousands of companies worldwide, meaning there are countless blogs and vlogs dedicated to getting the most out of the platform.
• WYSIWYG email builder: Crafting emails that get results is easier with MailChimp because the workspace display shows what customers will see.

Who Uses MailChimp?

Just about any business can benefit from using MailChimp because a free version of the software is available, and paid packages start at just $11 per month. 

The platform is also popular because most people working in eCommerce know how to use it.

Omnisend

Omnisend is a leading eCommerce solutions provider because it helps retailers to solve the problems that trouble them the most.

The platform has been developed to reduce cart abandonment and encourage consumers to leave reviews, and campaigns spanning several sales channels can be triggered by a single action.

Features that make Omnisend stand out include SMS notifications to send out special offers or shipping notices, a drag-and-drop interface, and advanced segmentation options.

Why Choose Omnisend?  

• Strong segmentation: Omnisend is used by some of the biggest names in eCommerce because it has some of the most advanced segmentation options available.
• Easy to use: Intuitive features like a drag-and-drop newsletter builder make Omnisend one of the easiest sales automation platforms to use.

Who Uses Omnisend?

Omnisend is chosen by companies that have benefitted from email marketing and want to explore additional sales channels.

Omnisend give allows eCommerce companies to expand their horizons, and it provides them with a single platform to manage and run all of their campaigns.

Ortto

Ortto, which used to be marketed under the brand name Autopilot, offers businesses a way to create unique customer experiences and automate sales processes.

The platform uses colorful emojis and stickers to encourage collaboration and make creating campaigns more fun, and it uses the data it collects during those campaigns to interpret customer behavior and identify opportunities.

Why Choose Ortto 

 

• Customer journey builder: Ortto’s intuitive controls allow users to visualize and develop unique customer journeys.
• Personalization features: Ortto allows users to filter their messaging based on demographics or behavior for personalized customer experiences.

Who Uses Ortto?

Ortto has earned a reputation for being very easy to use, so it is used by companies looking for a straightforward solution that delivers results quickly.

Rejoiner

Rejoiner offers a solution that caters to eCommerce companies that want to leave campaign design, strategy, and management to experts.

Also, Rejoiner has managed thousands of campaigns, and they use highly targeted segmentation and personalization to maximize conversions and revenue per customer.

Why Choose Rejoiner? 

• Audience evaluation: Rejoiner scrutinizes email lists to identify the most engaged subscribers. This information is then used to create persuasive emails and interesting newsletter content.
• Data consolidation: Rejoiner takes the data gathered from eCommerce websites and merges it with email engagement information to create a detailed profile for each subscriber.

Who Uses Rejoiner?

Rejoiner is an attractive option for companies that need a little help with some of the more creative aspects of eCommerce marketing.

This platform is often sought out by businesses in competitive industries who want to add a little bite to their messaging.

Sender

Sender is a relatively new sales automation solution that has already attracted a loyal following.

A free templates gallery and drop-and-drag interface take the hassle out of creating beautiful newsletters, and the emails Sender generates will render perfectly on any type of device.

The platform also features an HTML editor for users who would prefer to code custom emails.

Why Choose Sender? 

• Easy newsletter creation: When Sender users paste a product URL into a newsletter, its description, price, and images are inserted automatically.
• Drip automation: In addition to sending the same email to an entire list, Sender contacts individual customers automatically when they abandon shopping carts or celebrate birthdays.

Who Uses Sender?

Sender is used by companies that want to send newsletters and targeted emails and would like to try before they buy.

The free package does not come with a time limit attached, and it allows users to manage up to 2,500 contacts and send out up to 15,000 emails each month.

Sendinblue

Sendinblue is marketed as a simple solution for new and growing eCommerce companies, but that does not mean this platform lacks an attractive list of features.

Sendinblue users can use the app to manage SMS and social media campaigns, and the platform also offers live chat and CMS integration.

Why Choose Sendinblue? 

• Creative toolbox: Visual elements can transform marketing materials, so Sendinblue includes a toolbox of templates, themes, and styles.
• A/B testing: Businesses that wish to test the water before committing large sums to a campaign can use Sendinblue’s A/B testing feature to compare the effectiveness of different strategies.

Who Uses Sendinblue?

Sendinblue is a good choice for companies that want to use a straightforward interface to send out engaging and effective emails.

The free plan is attractive because it does not cap the number of contacts that can be managed, but companies that take this option can only send 300 emails each day.

SharpSpring

SharpSpring allows eCommerce companies to manage their sales funnels from a single platform.

This solution costs significantly more than many alternatives, but every package is full of features and includes a dedicated onboarding specialist. SharpSpring integrates with more than 700 eCommerce and CRM tools, and advanced tracking tools make sure that no leads go to waste.

Why Choose SharpSpring? 

• Visual workflow builder: SharpSpring includes a visual workflow builder that uses branching logic to identify prospects that are ready to buy. The platform also provides a daily list of hot leads.
• Visitor ID: SharpSpring claims that its VisitorID system can identify twice as many website visitors as the technology used by other platforms.

Who Uses SharpSpring?

SharpSpring is great for smaller eCommerce retailers that like to use advanced analytics to keep their mailing lists manageable. Plans that meet the needs of advertising agencies are also available.

What is eCommerce Marketing Automation?

eCommerce marketing automation is the use of software to automate eCommerce marketing tasks.

These software platforms can include anything from sending out automated abandoned cart emails to segmenting your customer list and sending targeted messages based on their behavior.

Marketing automation software is designed to make your life as a marketer easier by automating repetitive tasks, such as email marketing, social media posting, and targeted ads.

With marketing automation, you can set up complex workflows that are triggered by specific events, such as a customer subscribing to your email list or abandoning their shopping cart.

This allows you to take a hands-off approach to your marketing and let the software do the work for you.

Features to Compare in Marketing Automation Software

It’s important to choose a marketing automation platform that has all the features you need to run your eCommerce business. Here are some of the most important features to look for:

• Abandoned cart emails: These are automated emails that are sent to customers who have abandoned their shopping carts. They typically include a discount code or other incentive to encourage the customer to complete their purchase.
• Welcome emails: Welcome emails are sent to customers after they subscribe to your email list or make their first purchase. They can include a discount code, coupon, or other incentives to encourage customers to keep shopping with you.
• Lead capture forms: Lead capture forms are used to collect information about your website visitors, such as their names, email addresses, and contact information. This information can be used to create targeted marketing campaigns.
• List segmentation: List segmentation allows you to segment your customer list into different groups based on criteria such as purchase history, location, or email engagement. This allows you to send more targeted messages that are relevant to each customer’s interests.
• Reporting and analytics: Reporting and analytics tools give you insights into your marketing campaigns, such as how many people opened your emails or clicked on your links. This information can help you optimize your campaigns for better results.
• Integrations: It’s important to choose a marketing automation platform that integrates with the other software you use, such as your eCommerce platform, CRM, and email marketing service. This will allow you to automate your marketing tasks and save time.
• Pricing: It’s important to choose a platform that fits your budget and has the features you need. The cost of marketing automation software can range from $0 to $1,000+ per month. However, spending around $35 to $250 should be enough to get started and make a difference.
• Functionality: The best marketing automation platforms have a wide range of features, such as abandoned cart emails, welcome emails, lead capture forms, list segmentation, reporting and analytics, and integrations.
• Customer support: It’s important to choose a platform that has good customer support in case you have any questions or need help using the software.
• Ease-of-use: The best marketing automation platforms are easy to use, even if you’re not tech-savvy. They should have a user-friendly interface and step-by-step instructions on how to use the features.

What are the Advantages of Adopting Marketing Automation Software for Ecommerce?

There are many advantages of using marketing automation software for eCommerce, such as:

• Better customer insights: Marketing automation software gives insights into your customers’ behavior, such as what they click on and purchase. This information can help you create more targeted marketing campaigns.
• Increased average order value (AOV): Marketing automation can help you increase your AOV by sending targeted messages to customers based on their purchase history.
• Reduced human error: Automating your marketing tasks can help you reduce human error, such as forgetting to send an email or sending the wrong message to the wrong customer.
• Save time and increase efficiency: Automating your marketing tasks can save you a lot of time and increase your efficiency. You can use this time to focus on other aspects of your business.

How to choose the Right Ecommerce Marketing Automation for You

Now that you know the basics of marketing automation software, it’s time to choose the right platform for you. Here are some tips:

• Do an initial search for software and reviews: The first step is to do a general search for marketing automation platforms and read online reviews. This will give you an idea of the different features each platform offers and what other people are saying about them.
• Determine your business needs: Next, you need to determine your business needs. Ask yourself what features you need and what your budget is. This will help you narrow down your choices.
• Book a demo and try the software: Book a demo with each platform once you’ve narrowed down your choices. This will give you a chance to see how the software works and if it’s a good fit for your business.

Final thoughts

eCommerce automation is one of the best ways to let software do the heavy lifting of building your audience. The goal of automating the tedious yet necessary tasks in digital marketing is to free you up to work more effectively on growing your business.

For more advice on growing and marketing your eCommerce business, subscribe to our blog or check out these related posts:

• 30 Big eCommerce Trends to Watch Out For in 2023
• How is Email Useful for eCommerce? Keeping Customers Engaged
• 16 Ways to Attract Customers to Your eCommerce Store in 2023

Study any successful eCommerce business and you’ll likely notice a common trend: they rarely put all of their eggs in one basket. 

Instead, they have a highly-diversified portfolio of channels by which they can sell and deliver goods and services to customers. This helps companies diviersify their risks to avoid an unexpected change like a Google search update or a wholesaler filing bankruptcy from completely ruining their business overnight.

According to Forrester, 75% of all the world’s commerce is made up of channel sales — that is, businesses selling indirectly through third-party partners.

Directly dealing with customers allows successful companies to control the sales process from beginning to end, and using sales channels indirectly provides them access to untapped markets and new prospects. 

This article will examine these two approaches to sales and explore the pros and cons of each before giving you what you need to develop a channel sales strategy for your business.

What are channel sales?

Sales channels are the avenues through which businesses market and sell their products or services. A company’s sales strategy will usually involve a mix of direct and indirect sales channels.

Direct sales channels are when a company sells its products or services to customers, either through its own sales force or through an eCommerce platform.

Indirect sales channels, on the other hand, are when a company uses third-party intermediaries to reach customers. Common examples of indirect sales channels include distributors, wholesalers, and retailers.

Most successful companies combine channel sales with direct sales. For example, a company might use a direct sales force to target high-value customers while also selling its products through retail outlets to reach a mass market.

An example of this would be Apple, which sells its products through both its own Apple Stores and through third-party retailers such as Best Buy.

What’s the difference between channel sales and sales channels?

Before we move on, we need to make sure we get our definitions straight. 

Channel sales refer to the practice of using third-party intermediaries to reach customers, while sales channels refer to the specific avenues through which businesses market and sell their products or services.

In other words, all channel sales involve sales channels, but not all sales channels are channel sales. 

For example, a company that sells its products directly to customers through its own sales force is not using a channel sales strategy, even though it is selling its products through a sales channel.

How do channel sales differ from direct sales?

When manufacturers and producers sell their products directly to the public online or in company-owned stores, they control every facet of the sales process.

They decide how their products will be packaged and displayed and what kind of experience customers will have. When manufacturers use sales channels, they give up this kind of control and place their reputations in the hands of third parties. 

However, entrusting products to a channel partner doesn’t come without benefits, as well. Namely, it allows companies to tap into new markets and reach new customer segments that they might not have been able to reach on their own.

For example, a company that sells sports equipment might find it difficult to break into the market for children’s toys. However, if that company partners with a retailer that specializes in selling toys, it can get its products in front of a whole new group of potential customers. These customers may not be familiar with your brand and so do not know to go to your website. But once they see it in a store they are already used to shopping in, you have a much better chance of acquiring a new customer.

Why use channel sales?

Sales channels allow companies with innovative products or unique selling propositions to grow very quickly and relatively inexpensively. 

Opening a branded chain of retail stores and hiring and training the staff that would be required to run such an operation would take years and cost millions. Even if a company isn’t opening stores and just plans to use its website, marketing a totally new brand to unfamiliar consumers can be expensive, depending on the product category.

Companies that would like to have some sales coming in right away could accomplish almost as much by signing a deal with a reputable and established retail chain.

It’s a win-win scenario: businesses leverage existing infrastructure while the retailers collect on a percentage of the sales to keep their own business running.

Sales channels are a great way for companies to reach new markets quickly and efficiently. However, it’s important to consider the pros and cons before entering any agreements. 

The pros of channel sales

There are several advantages to using sales channels:

• Increased reach: A big company that wants to establish a presence in a new country could do so quickly by signing on with a local distributor. The distributor would have the connections and knowledge required to get the products into stores quickly and efficiently.
• Reduced costs: As mentioned, sales channels reduce costs. They can be less expensive than direct sales, and the company avoids the costs of setting up and running its own retail operations.
• Trust is built in: Consumers tend to trust big retailers more than they trust individual producers. When a new company uses established sales channels, it gains instant credibility. For example, the high-end grocery chain Whole Foods has a reputation for quality. As such, they’ve earned trust from their loyal shoppers, who will likely ascribe the same level of quality to anything stocked on Whole Foods’ shelves.
• Rapid experimentation: A company that wants to test the waters in a new market for things like marketing campaigns and new products and customer bases in a low-stakes environment can do so quickly and cheaply by using sales channels. If the experiment is successful, the company can then invest more heavily. If it’s not, it can move on without having wasted too much time or money.
• Risk reduction: When a company uses channel sales, it spreads out the risk of launching a new product. If the product is a flop, the company likely won’t be stuck with a bunch of unsold inventory.
• Combined maintenance and solutions: Some companies that use channel sales find that they have the mutual benefit of seeing an increase in the value of their products. For instance, a catering business may partner with a beverage business and, as a result, be able to offer their customers a bundle deal and a one-stop shop for all their party needs.
• Better scaling: If you have established a channel sales model that has aspects such as proper incentives, co-marketing, relevant revenue sharing, and other relevant plans, you will be able to scale very effectively when you add more channel partners into the equation. In this situation, a partner manager is able to manage multiple partnerships that will bring in money that would otherwise require a whole in-house sales team to manage things.

The cons of channel sales

There are some potential drawbacks to using channel sales, including:

• Loss of control: When products are sold through channels, the manufacturer or producer has less control over the sales process, including pricing, how the product is displayed, and how it’s promoted.
• Increased competition: When a company uses channel sales, it risks having its products copycatted by competitors. If the product is successful, others will want to get in on the action.
• Lower margins: The middleman takes a cut of the profits, so companies that use channel sales usually have lower margins than those that sell directly to customers.
• Less predictable revenue: Because channel sales can be volatile, it can be hard to predict how much revenue a company will generate. This can make it difficult to plan for growth.
• Risk to your brand: If a company that sells through channels is not careful, its brand could be damaged. For instance, if the company’s products are selling well but its customer service is poor, it could reflect badly on the company. That’s why it’s important to choose a channel partner who’s known for a good reputation and excellent customer service.

Types of indirect sales channels

The most common type of channel sales is through online or brick-and-mortar retailers, but there are other options as well:

• Wholesalers: These are businesses that buy products in bulk from manufacturers and producers and resell them to retailers.
• Distributors: These companies buy products from manufacturers or producers, store them in warehouses and then sell them to retailers.
• Agents, brokers, or affiliate partners: These are independent salespeople who work on commission. They don’t usually take ownership of the products they sell but act as intermediaries between buyers and sellers.
• Direct mail: This is when products are sold directly to consumers through the mail.

Who (and what) are channel partners?

Channel partners are individuals or organizations that provide companies access to customers that would otherwise be beyond their reach. 

Manufacturers wishing to expand overseas can avoid red tape by entering into agreements with foreign retail chains and distributors. 

Companies that open stores on popular eCommerce platforms like Amazon, eBay, and Etsy gain access to the vast amount of traffic these sites generate. There is always a cost associated with this access, but it is usually a price worth paying.

What makes a good channel partner?

Good channel partners sometimes provide a halo effect that can help fledgling companies as they work to build their reputations. In other situations, good channel partners better understand local laws and regulations or have transportation, warehousing, and distribution infrastructure in place. 

The attributes that companies should look for in channel partners are determined by the nature of the challenges they will face, but they should always seek out capable partners that share their values and approach business in a similar way.

High technical expertise

You should make sure that any channel partners you do business with have enough technical expertise to handle their responsibilities and provide whatever customer support is required. 

Failing to perform the necessary due diligence before entering into a channel sales agreement can leave companies at the mercy of inept or dishonest partners, which can cause great reputational damage. 

To avoid this pitfall, look for partners that conduct business professionally and treat their customers as well as you do.

Complementary to your product

A company in a similar line of business or with a complementary product could be a very useful channel partner. When complementary items are bundled together, the benefits of the package often outweigh the combined benefits of the two products. 

Experts have named this phenomenon synergy marketing. When a channel partner is in a similar line of business but does not have a similar product, they may offer more attractive terms to fill a hole in their lineup.

Aligned with your market

A channel partner that does not operate in the same market is unlikely to generate many sales. 

If your company makes household safety products for senior citizens living in New England, a Las Vegas-based retail chain known for its youthful and avant-garde clientele is not the channel partner you should be looking for. 

Instead, you should look for partners with similar customers to yours, even if they sell different products.

Similar sales processes

Sales channel partners sometimes conduct thousands of transactions daily, and they exchange a lot of information. 

When all of the parties involved have similar sales processes, things tend to go more smoothly, and fewer things slip through the cracks. Doing business with a partner that has a similar sales process can also provide opportunities. 

When partners sell complementary products online, in stores, or through a network of affiliates, their sales processes will likely provide several excellent upselling opportunities.

More benefits of channel sales

Channel sales bring in business in three ways:

• They give businesses an opportunity to make new sales
• Sell more of the same products to existing customers, 
• Sell different products to existing customers. 

The relationships that give rise to these opportunities are often quite complex, and their study has given rise to new terms like reverse channel, direct distribution, and intermediary networks. 

Selling through intermediaries or intermediary networks

The vast majority of channel sales are made by third parties like retailers. These third parties are called intermediaries, and it sometimes takes two or three of them to complete a transaction. 

A second intermediary enters the picture when a manufacturer sells to a wholesaler or distributor instead of a retailer. 

A third intermediary may become involved if a sales agent is needed to sell perishable goods quickly to clients worldwide.

Let’s consider this with a real-world example. Imagine you own a small winery in Napa Valley and want to sell your wine internationally. You could try to set up meetings with potential buyers all over the world, but that would be time-consuming and expensive.

Instead, it would make more sense to work with a distributor in each country who can handle the logistics of getting your wine to stores and restaurants.

There are three parties involved here: the manufacturer (you), the distributor, and the retail stores. And there are two types of channel sales: indirect and direct.

Reverse Channels

Most sales channels follow a predictable path. A manufacturer makes a product that is then sent to a distributor and a retailer before being sold to the customer or end user. 

These arrangements are designed to get goods flowing in one direction and money flowing in the opposite direction. However, reverse channels are different. 

Reverse channels are created when customers find uses for products that manufacturers never dreamed of and start selling them in completely different markets. The product’s journey continues in these situations, but no extra money heads the other way.

For example, Apple never intended for its iPhones to be used as cameras. But that’s what many people use them for, and there are now a number of businesses that have sprung up to take advantage of this trend.

One such company is San Francisco-based Luma Labs, which sells iPhone camera cases and accessories. The company’s products are designed to help people take better pictures with their iPhones.

Of course, their entire business model is built upon Apple’s products, but none of their profits actually flow back to Apple. 

Luma Labs is just one example of a company that has found a way to use a reverse channel to its advantage. There are many others out there, and the number is only likely to grow as manufacturers continue to come up with new products and technologies.

Direct distribution channels

A direct distribution channel is a team of agents, canvassers, salespeople, or representatives that deal with customers either face-to-face or online. 

Sales parties that give agents or representatives an opportunity to demonstrate their products in front of a friendly and familiar audience are a popular kind of direct distribution. 

These channels are called direct, even though salespeople could be mistaken for intermediaries because sales are not made in fixed retail locations.

Dual distribution

Dual distribution arrangements are common in retail sectors like consumer electronics. 

These arrangements involve manufacturers selling products directly to consumers in company-owned stores and distributing the same products to independent retailers, small retail chains, and big-box outlets. 

Manufacturers are often tempted to place their thumbs on the scale in these situations and offer better warranties or other perks in their own stores. 

This temptation should be resisted as it could make life difficult for partners and jeopardize relationships that took time and effort to build.

An example of a dual distribution arrangement is Apple’s relationship with Best Buy. Apple sells its products directly to consumers in Apple Stores and also distributes them to Best Buy, where they are sold to customers alongside products from other manufacturers.

How channel sales programs are measured

Monitoring the success of a sales channel can be challenging because it involves looking for trends and opportunities to improve efficiency in data taken from two or more companies. 

How do you compare analytics from a brick-and-mortar store with an intermediary seller to determine ROI? It’s like comparing apples and oranges. 

This is easier when all of the parties involved agree to focus on key metrics and then gather the information in a consistent manner. 

Maintaining and nurturing personal relationships is also important. A candid phone call with a sales partner can reveal more valuable information about the state of a sales pipeline in five minutes than poring over documents can uncover in a day.

Maintaining and strengthening partner pelationships

Retailers, wholesalers, and distributors have many products and sales opportunities to choose from, so you will have to make yours stand out if you want to attract their attention. 

Agreeing to bear some of the ramp-up costs or offering an incentive program would probably garner plenty of interest in your opportunity. 

That said, you should not overlook things like training programs and coordinated marketing campaigns that can strengthen relationships and improve the chances of long-term success. 

In other words, always think “win-win.”

KPIs and success metrics

You can glean useful information from corporate documents far more quickly if you and your sales partners agree to collect and share key data. 

Here are some of the metrics and key performance indicators you should think about monitoring if you want to keep track of sales channels:

• Annual and quarterly pipelines
• Marketing funds spent by each partner
• Cost of recruiting a new partner
• Training and onboarding costs
• Length of the sales cycle
• Cross-sell and upsell rates for each sales channel

As you can see, the success of your sales channels can be measured in a number of ways once everyone decides on which metrics matter most. However, the most important thing is to track your sales numbers.

You should also monitor key performance indicators like customer satisfaction, retention rates for partners and intermediaries, and monthly, quarterly, and annual gross revenues. 

These metrics will give you a good idea of how well your channels are performing and whether or not they are meeting your expectations.

It’s also a good idea to keep an eye on emerging trends in the sales channel industry so you can adapt your strategy as necessary. 

The landscape is always changing, so you need to be prepared for anything. By staying up to date with the latest trends, you can ensure that your channels are always working to their fullest potential.

Building a channel sales program

Profitable sales channels are built over time by partners that are committed to each other’s success. If this is your goal, you will need a recruitment strategy that identifies and attracts the right partners and an onboarding program that puts them on the road to success. 

Here are a few things you should keep in mind as you build your channel sales program:

Recruitment

You can take a passive or proactive approach to sales partner recruitment. Passive techniques like website inquiry forms are simple and inexpensive to set up, but they may not attract the kind of partners you are looking for (especially if you’re not driving qualified traffic to your site).

Approaching good-fit partners directly solves this problem, but approaching them first may put you at a disadvantage from a negotiation perspective.

Onboarding

Sales partners sometimes lose enthusiasm when initial sales are disappointing, so you should do everything you can to help them hit the ground running. 

You should give them immediate access to information about your products, sales cycle, and corporate culture, and you should check in with them regularly to see how they are doing. 

Taking these steps early on is worthwhile because they establish candid and open communication and improve the chances of success.

Connecting with partners

Professional relationships are most productive when all of the parties involved have common goals and know where they stand. When you enter into an agreement with a sales partner, everybody involved should know what is expected of them and what they can expect in return. However, you should try to keep things relatively simple, as overly complex programs are usually unpopular.

Finding the right partners

You should look for partners that fish in the same waters as you. They should deal with the same kind of customers, operate in an area aligned with your primary market, and have the technical know-how to provide customer service and repairs. 

You should also limit your search to partners that bring something to the table, like access to a new market or reduced packaging or shipping costs.

Monitoring and managing sales channels

Just because you’ve built up a diversified portfolio of sales channels and partnerships doesn’t mean you can sit back and relax. You must monitor your channels regularly to see how they are performing and make changes where necessary. 

The most important thing is to keep track of your sales numbers so you can identify any problems early on.

It is also important to manage your relationships with partners effectively. You should have regular meetings to discuss performance and set goals, and you should provide feedback on a regular basis. 

If there are problems, you should address them immediately. You can keep your sales channels healthy and productive by taking these steps.

Is it helpful to invest in a sales channel manager?

If you plan to sell through multiple channels, hiring someone to manage your sales channels can be helpful. 

After all, it’s not like you don’t have a million other things to worry about to keep your business afloat! 

Sales managers can be responsible for outbound and inbound recruiting, handling all communications and arrangements between channel partners, and reporting all KPIs and channel health metrics back to you. 

If the idea of cold-calling and negotiating with channel partners sounds like a nightmare, a sales channel manager may be a good investment. 

Do you have the resources to manage a demand increase?

At its core, a sales channel strategy is an expansion strategy. Through it, you are getting more eyes on your brand and thereby setting up operations for more volume, which means you are moving more products and services.

You are diversifying your sales channels too, so if you want to pursue this strategy, you need to equip yourself to handle all that extra business and activities that support it.

If you don’t have the means or infrastructure necessary to accommodate increased demand, you might want to hold off on leveraging a sales channel strategy for now.

Arm yourself with the best channel management solutions

As you can see, there are a lot of moving parts to consider when crafting a sales channel strategy. SkuVault integrates with your favorite eCommerce solutions, including channel management platforms.

This arsenal of channels includes Channeladvisor, Feedonomics, Zentail, and more. These integrated platforms give you the ability to manage your inventory in one place while keeping an eye on sales, margin, and other essential data.

In addition, SkuVault’s warehouse management system (WMS) can automate and optimize your warehouse operations, giving you more time to focus on other aspects of your business. 

With features like pick-to-pack, barcoding, and real-time reporting, SkuVault can help you streamline your operations and improve your bottom line. All that extra functionality also makes it easier to implement a sales channel strategy.

Get in touch

If you’re looking for a comprehensive solution to sales channel management, SkuVault is the answer. 

When you’re ready to start, our team is here to help you implement a sales channel strategy to help you grow your business.

Contact us today at (502) 795-5491 to learn more about how SkuVault can help you take control of your inventory and sales data. 

We’ll work with you to find a solution for all your channels and help you grow your business. You can also click the link on this page to request a demo and see the platform in action.

We live in a world of finite resources. We only have so much time, money, and space to build and scale our businesses.

One of the most essential skill sets across all industries is the ability to properly allocate the resources we’re given for maximum results. This is true of upper management professionals, football coaches, entrepreneurs, and eCommerce business owners. While their individual goals look different, they all involve getting the most out of what they have to work with.

For eCommerce business owners, instead of allocating players on a field, they are tasked with allocating inventory and products across sales channels. Knowing which channels have more juice to squeeze and which are dry is what helps set successful multichannel businesses apart from their peers.

In this post, you’ll learn:

What inventory allocation is, and why it’s so important

Why inventory allocation is important

Key factors that affect inventory allocation

How to conduct proper inventory allocation in your eCommerce business

What is inventory allocation?

Inventory allocation is the process of allocating inventory to specific locations in order to meet customer demand.

While it sounds simple on the surface, things can get vastly more complex.

Inventory allocation can be done manually or automatically, but it’s typically done through some form of inventory management software.

When eCommerce brands are selling via multiple sales channels, such as online marketplaces, it’s essential that you can see how much inventory is allocated across your website and brick-and-mortar store.

For example, a retailer may want to keep a certain amount of inventory in their brick-and-mortar store while also stocking inventory in their online store and in third-party warehouses. This could be because they only expect a certain number of in-person sales, because they have a higher margin elsewhere, or for any number of other business reasons. The important thing is that the retailer has the ability to parcel out inventory across channels.

The factors in the following sections are what dictate how much of each particular product is allocated to each particular channel.

 If you’re selling perishable goods, that adds another layer of complexity to your inventory allocation strategy.

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Why do eCommerce businesses need inventory allocation?

eCommerce businesses need inventory allocation in order to streamline their inventory fulfillment and meet customer demand.

Inventory allocation can help eCommerce businesses save time and money by ensuring that inventory is being sent to the right location at the right time.

Many customer service issues flow downstream from good inventory allocation. 

Brands who get this right will enjoy many benefits, including:

• Mitigating the risk of overstocking inventory in one location and understocking inventory in another
• Mitigating the risk of overselling inventory and not being able to fulfill orders
• Improving multichannel sales management
• Building a scalable foundation for the business to grow

Even if you’re a small, boutique eCommerce shop with only one sales channel, inventory allocation can still help you save time and money by ensuring that inventory is where it needs to be, when it needs to be there.

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The factors that affect how a business allocates its inventory

There are a few inventory allocation parameters eCommerce businesses should consider when trying to streamline their inventory fulfillment.

1. Allocation rules: When allocating inventory, businesses should consider their inventory strategy and what type of inventory they have on hand. Are you selling perishable goods or non-perishable goods? Do you have inventory that needs to be rotated?

Inventory allocation should go hand-in-hand with your overall inventory management strategy, whether that’s FIFO, LIFO, or something else entirely.

2. Capacity constraints: When allocating inventory, businesses should also consider their capacity constraints. This includes things like warehouse space and staff availability.

It’s impossible to allocate an infinite amount of inventory to a particular channel, so this is where using historical sales data can help you make the right decision or learn from previous mistakes.

3. Lead time: The lead time is the amount of time it takes for inventory to arrive at its destination. This should be taken into account when allocating inventory so that you can make sure inventory arrives on time and in the correct location.

For example, if you’re allocating inventory to a brick-and-mortar store, you’ll need to deal with lead time from your supplier.

However, if you’re trying to meet demand in your online store as well, you’ll need to consider both the lead time from your supplier and the lead time required to get the product to the end user.

4. Customer segmentation: When allocating inventory, businesses should consider their customer segments. This includes things like customer location, customer type, and purchase frequency.

For example, if you’re selling perishable goods, you’ll want to make sure that inventory is allocated to locations where customers are more likely to purchase it.

On the other hand, if you’re selling non-perishable goods, you may want to consider allocating inventory based on customer location so that you can minimize shipping costs.

5. Sales data: Sales data should be used when allocating inventory so that businesses can make sure they are allocating inventory to the locations where it is most likely to sell. This includes things like inventory turnover, customer demand, and channel sales.

6. Inventory data: Good inventory allocation can’t be done without real-time, accurate inventory data.

This means knowing what inventory you have on hand, where it’s located, and how much of it is available to sell.

This kind of accuracy is only possible with automated inventory management software.

7. Transportation and storage costs: There are many costs associated with both storing and transporting inventory.

This includes shipping costs, fuel costs, warehouse rental fees, and potentially even the payroll cost of staffing that warehouse.

Allocating inventory to a particular channel may satisfy customer demand, but it may also come with costs so high that it eats into your margins.

For example, allocating inventory to a brick-and-mortar store may require you to pay for inventory storage at that location in addition to labor hours at the store.

However, if the inventory doesn’t sell quickly enough, you may end up paying inventory carrying costs that exceed the revenue generated from sales.

This is why it’s important to consider both customer demand and transportation and storage costs when allocating inventory.

8. Returns: Unfortunately, not all inventory is sold, and not all sales are final.

Customers may return inventory for a number of reasons, including things like damaged goods, incorrect items being shipped, or simply changing their minds.

Businesses need to consider the likelihood of returns when allocating inventory and have a plan in place for dealing with returned inventory.

This may include things like setting aside inventory to cover expected returns, working with suppliers on return policies, or partnering with a returns management company.

If returns continue to be an issue, you may need to look into how to reduce returns to keep your business growing.

9. Seasonality: eCommerce is the business model most affected by seasonality, especially Q4 buying patterns.

Preventing stock-outs during the holiday rush can best be avoided by studying historical data and forecasts.

An IMS like SkuVault allows you to run these reports automatically, helping you once again make data-driven decisions in your inventory allocation.

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How do I allocate inventory effectively?

Now that we’ve talked about the “what” of inventory allocation let’s talk about the “how” of inventory allocation. Namely, what are some best practices for inventory allocation?

Inventory allocation best practices:

Centralize your inventory

One of the best ways to improve inventory allocation is to centralize all your inventory data into one “single source of truth.”

This means having one centralized inventory management system that houses all of your inventory data in one place.

It’s not uncommon for businesses to have inventory data spread across many different repositories, including spreadsheets, scraps of paper around the warehouse, or even info in their own heads.

Decentralization will inevitably lead to error and dirty data, which will then lead to stock-outs, overstocking, and upset customers.

Inventory centralization is essential for both good inventory allocation and overall business health.

Not only does this make it easier to track inventory levels and sales data, but it also makes it easier to allocate inventory across multiple channels.

Study historical trends

If you’re tracking all your sales and inventory data in an IMS like SkuVault, you can study your records to best understand your bottlenecks. Ask yourself the following questions:

1. Which channels have been most prone to stock-outs?
2. Which channels have been most prone to overstocking?
3. What are the average lead times on a channel-by-channel basis?

Understanding your most common inventory allocation issues will help you fix them in the future.

Set up automatic reorder alerts

A good inventory management system will allow you to set up automatic alerts that notify you when inventory levels reach a certain threshold.

This takes the guesswork out of inventory allocation and ensures that you’re never caught off-guard by stock-outs.

Of course, you’ll need to calculate the correct stock values needed for your particular business. This involves understanding your lead time demand and safety stock.

If you want to learn more, read our guide on how to use the reorder point formula for your inventory.

Speaking of safety stock…

Maintain safety stock

Safety stock is inventory that you keep on hand to cover unexpected spikes in demand.

It’s important to have safety stock because inventory is often unpredictable. You might get a sudden surge of orders that you weren’t expecting, or your lead time might be longer than usual due to supplier issues.

Safety stock is a delicate science. Keeping too much product on hand will result in dead stock, while not enough product on hand will result in stock-outs.

You can fall off the horse either way, and both are costly mistakes. This is why inventory management professionals use the safety stock formula to best understand how to calculate these values.

If you want to hedge yourself against the risk of stock-outs, there’s really no better way than with safety stock.

Use customer segmentation

Customer segmentation can also be used when allocating inventory.

Customer segmentation is the practice of dividing your customer base into groups based on shared characteristics.

This is usually done so that businesses can better understand the needs of each group and then allocate inventory accordingly.

For example, a clothing retailer might segment its customers by age, gender, or location. They could then use this information to allocate inventory to specific stores or channels.

Customer segmentation can be a helpful tool for inventory allocation, but it’s not always necessary. In many cases, inventory can be allocated on a first-come, first-serve basis.

It really just depends on your business and your inventory situation.

Conduct regular inventory audits

Regular inventory audits will help businesses keep track of their inventory levels and make sure inventory is being allocated correctly.

Audits are no fun. We get it. But they’re absolutely essential for inventory management. And you don’t need to shut down your entire operation to audit your warehouse.

Leverage cycle counting, which allows you to inventory a small section of your warehouse at a time. This will minimize the disruption to your business while still ensuring inventory accuracy.

Work with a third-party logistics provider

A third-party logistics provider (3PL) is a company that helps businesses with their inventory management and fulfillment needs.

Essentially, businesses outsource their entire logistics pipeline to another company.

3PLs typically provide warehousing, shipping, and other logistics services. And they can be a big help when it comes to inventory allocation.

A good place to start is to understand how much 3PLs cost to see if outsourcing makes sense for your business model.

Utilize just-in-time inventory allocation

Just-in-time inventory allocation is an inventory management technique that’s often used in manufacturing.

The goal of just-in-time inventory is to only produce inventory when it’s needed and not a moment sooner. This helps businesses avoid the cost of storing excess inventory.

It can be difficult to implement just-in-time inventory for eCommerce businesses because there’s often a lot of lead time involved in sourcing and manufacturing products.

The exception to this would be eCommerce businesses that manufacture all of their products in-house. In this case, just-in-time inventory would be much easier to implement.

However, it’s important to remember that even in-house products require materials, and those materials often have lead times from suppliers.

Unless you’re in the rare position of producing everything (including your materials) from scratch, you’ll need to consider materials allocation as well.

Try push inventory allocation

Push inventory allocation is an inventory management technique that’s once again often used in manufacturing but can be leveraged by eCommerce businesses.

The push inventory method involves producing products based on customer demand forecasts. In other words, you’re kind of “producing in faith” that customers will actually purchase your products.

Now, if you’re using a solid IMS with accurate reporting information, you should have nothing to worry about. However, it goes without saying that attempting this without an inventory management system is a recipe for disaster.

Push inventory is inventory that’s produced before it’s needed and then “pushed” down the supply chain to customers or retailers. The idea is to produce inventory before it’s needed so that businesses can avoid the cost of rush production.

The problem with push inventory is that it can result in high inventory costs, especially storage costs, if the inventory doesn’t sell as quickly as planned.

This is why many organizations combine push inventory with just-in-time inventory. That way, businesses can avoid the cost of inventory that doesn’t sell while still meeting customer demand.

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Final thoughts

We all have limited resources, and understanding where to put those resources is an essential skill set for eCommerce and warehouse business owners.

By following the tips above, you can streamline your inventory fulfillment process and avoid the cost of inventory that doesn’t sell, all the while keeping your customers happy and growing your bottom line.

Do you have any inventory allocation tips that we didn’t mention? We’d love to hear from you in the comments below.

Or, if you’re interested in learning more about how SkuVault can help with your inventory management and fulfillment needs, click the button on this page to schedule a demo.

Enterprise Resource Planning (ERP) systems are becoming an important part of many businesses. However, with all of the different options on the market, it can be difficult to decide which system is right for you or if an ERP system at all is the right fit.

In this article, we will discuss 21 popular ERP Systems and their features. 

We will also answer some common questions about ERP Systems so that you can make an informed decision about which system, if any, is best for your business.

Table of Contents

1. 21 ERP Examples
2. What is an ERP System?
3. How Does ERP Software Work?
4. Why You May Need One
5. Disadvantages of ERP Systems
6. ERP System Alternatives
7. Types of ERP Systems
8. Who Uses ERP Systems?
9. ERP System Example Modules
10. ERP System Benefits
11. History of ERP Systems

21 ERP Examples

Abas ERP

Abas ERP is a software that offers a variety of features for mid-market manufacturing companies. Two of its major selling points are its flexibility and adaptability, and this aspect of the system made it a good fit for customers like German-based ADA Holding GmbH.

This cosmetics company, which has a wide range of products, needed an ERP solution that managed both batch and process manufacturing and custom and small-scale production for their processes.

They found that Abas ERP was up to the task and could manage its worldwide operations.

Acumatica

Acumatica is a cloud-based ERP system that offers a variety of features designed to help mid-sized companies thrive in today’s fast-paced market.

Two perks that set it apart include its future-proof platform and best-in-class business and industry functionality that can be tailored to its unique operations.

This system is a good choice for construction, distribution, retail-commerce, and other industries.

Aptean ERP

Aptean’s tailored ERP system is built specifically for small to medium-sized manufacturers who build and sell regulated products, making them a good choice for companies in the aerospace & defense, automotive, electronics, and medical device industries.

Features they provide, such as engineering change management, serial number capabilities, and product configuration, all contribute to overall quality and compliance.

The software includes comprehensive process management, quality control, and supply chain capabilities that are designed to help companies improve their overall efficiency and elevate operations.

Aqxolt

Cloud-based Aqxolt Cloud is an integrated enterprise resource planning solution that is built on the Salesforce App Cloud. 

Its multifunctional application system manages core processes for manufacturing, retail, healthcare, and service industries of all sizes.

From supply to financing, Aqxolt’s built-in system models allow you to streamline and manage every facet of your business operations.

BizAutomation

All-inclusive ERP solution provider BizAutomation allows you to automate your entire company in a single SaaS suite.

Suited for small businesses or businesses getting ready to scale, they offer industries of all kinds Big-Tech ERP features at a small-company cost.

Their inventory and non-inventory features function efficiently and accurately across kiosks, multiple warehouses, retail outlets, drop-ship vendors, 3PLs, and pretty much any place inventory is managed.

DELMIAWorks (formerly IQMS)

From planning, scheduling, and inventory control to supply chain management and shipping, DELMIAWorks Manufacturing offers functionality across the whole spectrum of the manufacturing process. 

It is particularly helpful for larger enterprises that work across multiple locations and is designed with the needs of manufacturing companies in mind. 

What makes the system a standout, however, is how just a single vision for all ERP, manufacturing, MES, and supply chain operations can be used to manage complex manufacturing operations.

Deltek Maconomy

Offering cloud and on-premise solutions, this project-centric ERP platform helps all sizes of enterprises increase efficiency and optimize performance.

Their large-scale software package is designed for professional services firms in the architecture, engineering, environmental and other marketing, and consulting industries.

The software provides a complete view of an organization’s projects, people, and finances in one central location to help project managers make more informed decisions and improve communication and collaboration among team members.

Epicor Kinetic

Epicor Kinetic ERP software features a modular and customizable approach with robust capabilities that focus on streamlining processes, improving customer responsiveness, and adding value across all sizes of enterprises.

Given its modularity and customization capabilities, it is able to solve a wide range of business issues and needs. Epicor Kinetic is a good choice for companies in the automotive, building supply, distribution manufacturing, and retail industries.

Infor CloudSuite

Infor CloudSuite is an agile data-driven ERP platform that focuses on the needs of the manufacturing, service, and distribution industries.

Previously, it was only offered as an on-premise option, but now the company features a cloud version. Their suite has plenty of features to help you with digitally transforming your company. 

However, two of their most popular features, according to TrustRadius reviewers, are location management and cost of goods sold.

Kechie ERP

Kechie is a cloud-based ERP app with numerous modules like customer relationship management, demand forecasting, procurement, and sales order management. 

Designed with the SME business in mind, leading industries in distribution, nonprofits, food services, and cannabis & CBD have used Ketchie ERP to streamline their operations and grow.

Microsoft Dynamics 365

Microsoft Dynamics is an integrated cloud-based enterprise resource planning system and accounting service that is built for small and medium companies. The system includes modules for financial management, supply chain management, and sales and marketing.

Microsoft Dynamics 365 is a good fit for the manufacturing, healthcare, financial and retail industries. The system also integrates with the web-based SkuVault Inventory Management System to help online merchants prevent stockouts, improve efficiency, and reduce errors.

NetSuite

NetSuite is an all-in-one cloud business management software suite that includes enterprise resource planning, customer relationship management, and eCommerce capabilities. 

It is a good choice for companies of all sizes in a variety of industries, including education, wholesale distribution, software, manufacturing, electronics, and food & beverage.

NetSuite’s inventory management module can also be fully integrated with the SkuVault Inventory Management System, making it a tech powerhouse that can take your business to the next level by easily managing stock levels, optimizing warehouse operations, and fulfilling orders quickly and accurately.

N41

N41 is a premise-based enterprise resource planning system that helps fashion and apparel industries streamline their operations and grow.

They have the quickest order-taking app in the market, and 80+ Brands use the system at MAGIC Fashion Trade Shows all over the country. N41 Apparel ERP eCommerce module works with existing retail and eCommerce stores and integrates with various online store systems that include FashionGo, Joor, Magento, and Shopify.

Odoo

Odoo is an open-source ERP software that has a wide range of business applications. It offers two enterprise resource planning solutions: Odoo Enterprise and Odoo Community. Odoo Enterprise is a paid solution that comes with additional features, while Odoo Community is free to use.

Two universally liked aspects of Odoo are its flexibility and scalability. Their software is suitable for verticals of all sizes, and it can also be customized to meet the specific needs of different industries.

Rossum

Rossum is an AI-powered Intelligent Document Processing (IDP) platform that helps businesses of all sizes and industries cut down on the time they spend processing documents by hand.

The software extracts data from invoices, bills, and other financial documents and then converts it into a format that can be imported into an ERP system.

Two major selling points of Rossum are its accuracy and efficiency. The software can accurately extract data from even the most complex documents. It also saves businesses a lot of time by automating the data entry process.

Sage 300

Sage 300 is an ERP software with excellent flexibility that you can get at a fraction of the cost of other ERP systems. 

The system lets you do anything from automating your finances to eliminating international business complexity to simplifying your inventory management. 

The solution has tons of features and add-ons, and it is also easy to use, making it a good choice for domestic and international businesses that do not have a lot of experience with ERP systems.

SAP Business One

SAP is a well-established brand, and its Business One product is an ERP system designed for small and medium-sized businesses.

The software includes modules that manage and streamline financials, human resources, customer relationships, operations, and inventory. 

Offering both on-premise or cloud deployment and integrated business intelligence, it is a good choice for companies in the manufacturing, distribution, and retail industries.

Scoro

Scoro is an all-in-one work management software that helps consultancies, agencies, and professional service organizations automate billing, simplify quoting, streamline projects, and optimize utilization.

It is a good choice for companies that are looking for a system with comprehensive functionality or are looking to transition to a four-day workweek, which Scoro is working on providing as a solution to their clients.

Tipalti

Tipalti is a cloud-based B2B accounts payable automation solution that helps businesses of all sizes automate their AP process. Two things users who have reviewed the software really like are their award-winning best feature set and usability factors. 

The software includes features such as invoicing, payments, and expense management. It also offers custom integrations and integrations with popular Accounting & ERP systems, such as NetSuite, SAP Business One, Sage Intacct, and QuickBooks.

Veeqo

Veeqo is an all-in-one inventory management fulfillment platform that helps businesses of all sizes track their inventory and orders in real time. The software includes features such as order tracking, barcode scanning, and inventory forecasting. 

Deployment of Veeqo is Cloud, SaaS, and web-based. Built on 30+ shipping and eCommerce integrations, Veeqo is a good choice for businesses that are looking to improve their inventory management process and grow.

Workday

Workday is a cloud-based software solution that specializes in developing applications for managing roles in finance, IT, HR, and capital for medium and large enterprises. The system boasts adaptability and ease of use, making it a good choice for businesses that want a user-friendly system that is easy to implement. Their planning system can integrate with any data source or ERP/General Ledger software. Also, their sourcing system works with all ERP, peer-to-peer, and analytics applications.

What is an ERP system?

An ERP system is a software application that helps businesses manage and automate their core business processes. An ERP system typically includes modules for accounting, inventory management, customer relationship management (CRM), human resources (HR), and supply chain management (SCM). 

ERP systems are designed to provide a centralized view of information across an entire organization, making it easier for businesses to track their performance and make necessary changes. By integrating all of these various systems into one, businesses can avoid the need to use multiple siloed applications, which can lead to data inconsistencies and inaccuracies. 

Moreover, an ERP system is software that unites and integrates various branches in a company, helping them to automate and efficiently manage various aspects of their operations, including financial management, supply chain management, customer relationship management, and human resources. 

Likewise, an ERP system can help with solutions such as state-of-the-art technical forecasting.

How does ERP software work?

The main goal of an ERP system is to automate various business processes so that businesses can save time and resources.

An ERP system works in many different ways, depending on the modules and features included. Generally, most ERP systems are designed to be integrated, meaning they can share data and work together with other software platforms to help businesses run more efficiently. 

ERP software is made up of modules, each of which addresses a specific business need. For example, the accounting module handles financial data and transactions, while the inventory management module tracks stock levels and helps businesses keep track of their products. 

When a business first implements an ERP system, it will typically start with one or two modules that are most relevant to its needs. As the business grows, it can add more modules as needed. 

ERP software is designed to provide a single, centralized view of information across an entire organization. This allows businesses to track their performance and make necessary changes quickly and easily. 

Do you need an ERP system?

You may be thinking, “My business is small, I don’t need ERP software.” But the truth is that every business can benefit from increased efficiency due to automation.

The main reason you may want to invest in one is that it can automate many of the processes that are currently being done manually. This includes things like tracking inventory, managing financial data, and keeping track of customer information.

They also help businesses manage their operations with flexibility and efficiency, bringing together critical data from various departments in a single system.

Disadvantages of ERP Systems

While ERP systems are modular-based and can be scaled up over time, they are also very complex and costly systems. Your business has a lot going on, and switching any systems midstream is complicated enough. But can you imagine switching nearly all of your systems over to an ERP system? 

The work itself of migrating old to new systems is a full-time job on top of keeping your business up and running. Because of this often, organizations will use project managers to keep the process moving.

As mentioned before, ERP systems are costly. According to a recent report, implementation of a new ERP system can cost anywhere from $150,000 to $750,000. While the benefits of ERP systems come from business efficiencies, they have a lot of upfront costs associated. 

ERP systems also involve the challenge of training employees on entirely new systems. Because of these disadvantages, you typically see larger organizations use ERP systems while small to mid-sized companies start out with point solutions before upgrading to a larger software. 

ERP System Alternatives

Due to the costly nature of ERP Systems, most businesses just getting into using software to run more efficient businesses are better off using point software solutions that address a specific use case.

If you need help seeing what other software could be useful to your business, check out our handy resources below:

• CRM vs. CSM: What’s the difference?
• Inventory Management Software
• Barcode Inventory Management Software Guide

Types of ERP Systems

There are three main types of deployment models for ERP systems: on-premise, cloud-based, and hybrid.

On-premise ERP Systems

On-premise ERP systems are installed on a company’s own servers and managed by the company’s IT department. 

This type of deployment is usually more expensive because it requires the company to purchase and maintain the hardware and software. It can also be more complex to implement and manage.

Cloud-based ERP Systems

Cloud-based ERP systems, also called Software-as-a-Service (SaaS) for short, are provided as a service. They are hosted by the software vendor and accessed by users through the internet.

This type of deployment is usually less expensive because it doesn’t require the company to purchase and maintain the hardware and software. It can also be simpler to implement and manage because the vendor takes care of the infrastructure.

Hybrid ERP systems

Hybridized systems are what their name suggests: a combination or hybridization of on-premise and cloud-based deployment models. This type of deployment is usually more expensive than cloud-based but less expensive than on-premise. 

It can be more complex to implement and manage because it requires the company to purchase and maintain the hardware and software, as well as manage the vendor-hosted infrastructure.

Which is better?

There is no one-size-fits-all answer to this question. It depends on the specific needs of your business. If you have the resources and expertise to manage an on-premise system, then that may be the best option for you.

The benefit is that you alone own and manage your data. This is a challenge to maintain but by far the most secure option.

If you want a less expensive and less complex solution, then a cloud-based system may be the better choice. And if you want the best of both worlds, then a hybrid system may be the right fit.

It’s important to weigh your business goals against the features and benefits of each platform. 

Who uses ERP systems?

ERP systems are used by businesses of all sizes across a wide range of industries. However, they are most commonly used by large businesses with complex operations. 

Industries such as manufacturing, retail, and healthcare are particularly well-suited for ERP systems. 

Some examples of actual companies that use ERP systems are Coca-Cola, Nike, Samsung, and Toyota. 

ERP system example modules

The modules included in an ERP system vary depending on the specific needs of the business. However, there are some common modules that are found in most ERP systems, such as:

• Financial Management: Financial Management modules help businesses manage their finances, including accounting, financial reporting, and budgeting.
• Supply Chain Management: This module helps businesses manage their supply chain, including procurement, inventory management, and order fulfillment.
• Customer Relationship Management (CRM): This module helps businesses manage their customer relationships, including sales, marketing, and customer service.
• Human Resources (HR): An HR module helps businesses manage their human resources, including employee records, payroll, and benefits.
• Project Management: This module helps businesses manage their projects, including project planning, task management, and resource allocation.
• Inventory Management: Inventory management modules help companies manage their inventory, including stock levels, replenishment, and order fulfillment.
• Manufacturing: This module helps businesses manage their manufacturing operations, including product planning, production scheduling, and quality control.

ERP system benefits

You’ve probably been able to deduce some of the benefits of ERP systems throughout this post, but here they are in list format. 

Better inventory management

Enterprise Resource Planning solutions can help businesses better manage their inventory by providing real-time visibility into stock levels, orders, and shipments. 

This information can help businesses avoid stockouts and overstocks, reducing the cost of inventory and improving customer satisfaction.

Reduced operational costs

ERP systems can help businesses automate and streamline their operations, leading to reduced labor costs and improved efficiency.

In addition, they can help businesses better utilize their resources, resulting in reduced materials and inventory costs.

Improved decision making

If you want to help your business improve its decision-making by providing accurate and up-to-date information, you can’t beat an ERP system. An ERP system can provide a complete picture of your business, including financials, inventory, customer relationships, and more. This information can help you make informed decisions about where to invest your resources.

Integrated information repository

ERP systems can help businesses by providing an integrated information repository. This repository can help businesses store and access all their information in one place, making it easier to find and use.

Boosted productivity and efficiency

ERP systems can help businesses to boost their productivity and efficiency by automating tasks and improving communication between departments.

This can lead to reduced costs and improved profitability. The system can also free up more time for employees to focus on more important tasks and projects.

Improved customer service

The right ERP system can help businesses improve their customer service by providing a 360-degree view of the customer. 

This information can help businesses resolve issues faster and provide a better overall experience.

Optimized manufacturing operations

An ERP system can also help businesses stay on top of their manufacturing operations. The system can store information about materials, components, and products.

This information can be used to plan production, track progress, and optimize processes. The system can also help businesses track quality and compliance with regulations.

Real-time information and data

The data available in this type of system is live, which means that businesses can always access the most up-to-date information. This is important for making informed decisions about where to invest resources and how to run operations.

Reinforced data security

An ERP system can reinforce data security by providing a central location for storing information. This information can be protected with access controls and permissions, ensuring that only authorized users can access it.

Reduced IT costs

An ERP system can help businesses reduce their IT costs by consolidating multiple applications into one system. This can lead to reduced hardware and software costs, as well as reduced maintenance and support costs.

Improved scalability

The best ERP systems are designed to be scalable, so businesses can easily add new users and modules as they grow. This helps businesses avoid the need for costly customizations down the road.

Elevated procurement, accounting, and finance capabilities

These modules help businesses manage their procurement, accounting, and finance operations. This helps provide a complete picture of your business finances, helping you make informed decisions about where to invest your resources.

Optimized warehouse and shipping operations

ERP systems can help businesses manage and optimize their warehouse and shipping operations. The system can provide real-time visibility into stock levels, orders, and shipments. 

This information can help businesses avoid stockouts and overstocks, reducing the cost of inventory and improving customer satisfaction.

Better asset management

An ERP system can help businesses manage their assets, including inventory, equipment, and property. These platforms can track and store information about assets, helping businesses keep track of their value and location.

Real-time visibility of production processes

An ERP system can help businesses better manage their production operations. The system can provide real-time visibility into production processes, helping businesses identify bottlenecks and optimize their operations.

Human resource management

An ERP system can help businesses manage their human resources operations. The system can store employee information, including contact information, skills, and qualifications. This information can be used to match employees with open positions. 

The system can also help businesses track employee performance and compliance with regulations.

Sales and marketing tools

An ERP system can help businesses manage their sales and marketing operations. The system can store customer information, including contact information, purchase history, and preferences. 

This information can be used to target customers with specific campaigns and offers. The system can also help businesses track leads and measure the performance of marketing campaigns.

Faster, more accurate reporting

If you want to generate faster and more accurate reports, let your Enterprise Resource Planning solution handle it. 

These systems can store information in a central location, making it easy to access the data you need. The system can also generate reports automatically, eliminating the need for error-prone manual data entry.

Improved production planning and coordination

ERP systems can help businesses plan and coordinate their production operations. The system can store information about materials, components, and products.

This information can be used to plan production, track progress, and optimize processes. The system can also help businesses track quality and compliance with regulations.

A more flexible business operation

Modern ERP systems are extremely flexible. Operations are constantly changing, so it is essential to have flexibility built into them. An elastic ERP system allows you to respond to ongoing changes in your operations and regulatory environment. 

Elevated quality control

ERP systems can help businesses raise their quality control to new levels by providing real-

time information and data that can be used to improve quality control processes.

In addition, you can also track compliance with regulations and help businesses avoid penalties. Lastly, an ERP system can enable businesses to implement quality management systems such as ISO 9001.

Shared best practices and processes

When you have an ERP system, you can share best practices and processes with other departments and businesses using the same system. 

This allows them to benchmark and learns from each other so they can mutually improve their operations.

History of ERP Systems

Before ERP systems, there were Material Requirements Planning (MRP) systems.

MRP systems were created by JI Case, a maker of tractors and construction equipment. JI Case worked with IBM to design what is believed to be the first MRP system in the 1960s. Afterward, large companies built MRP systems themselves.

MRP platforms were designed to manage manufacturing operations. They were used for tasks like planning production, tracking inventory, and scheduling deliveries.

These systems had a few disadvantages, though. They were expensive, took a lot of professionals to maintain, and took up a lot of room. Due to this, only large enterprises with budgets for in-house development could afford them.

To bring the benefits and affordability of MRP systems to small and medium-sized businesses, a new type of comprehensive business software was created by large software suppliers, such as Oracle and JD Edwards, in the 80s. This was MRPII, which was renamed ERP in the 1990s.

With the introduction of ERP systems, the manufacturing industry was disrupted. Businesses of all sizes could now afford to have an MRP system. This led to a new era of efficiency and productivity in manufacturing.

The first ERP systems were designed for manufacturers, but over time, the systems were adapted for other industries. Today, ERP systems are used in a variety of industries, including healthcare, retail, construction, and more.

The bottom line

ERP systems offer many benefits to businesses of all sizes. These systems can help businesses improve their production planning, coordination, and quality control.

Most ERP software platforms feature modules for nearly every business department, including finance, marketing, sales, and customer relations.

QuickBooks is the trusted solution to help businesses overcome their most challenging financial needs. Whether it’s tracking income and expenses, paying bills, or managing cash flow, QuickBooks solutions are trusted by millions of businesses across the globe.

QuickBooks’ two most popular financial software solutions are QuickBooks Online and QuickBooks Desktop. While both solutions help businesses better manage their finances, they have distinct features that set them apart from each other and make them better fit for certain types of businesses.

In this post, we’ll break down both QuickBooks Online and QuickBooks Desktop to see what features each software has, their pricing, the key differences between them, and why businesses are switching over to QuickBooks Online.

QuickBooks Online Overview

Who is QuickBooks online for?

QuickBooks Online is for financial software for small business owners who are comfortable with cloud-based applications. QuickBooks Online also has low monthly subscription fees that are appealing to businesses who don’t want to pay larger annual contract subscriptions. Additionally, this software is great for business owners who need multiple users to have access to financial data or have access to data on the go with their mobile app.

QuickBooks Online features

QuickBooks Online helps businesses:

• Capture and organize receipts
• Maximize tax reductions
• Track mileage
• Manage cash flow
• Invoice and accept payments
• Run reports
• Create and send estimates
• Track sales and sales tax
• Manage1099 contractors
• Manage and pay bills
• Track project profitability

Other tiers of QuickBooks Online offer additional features, including:

• Access customization depending on the user’s role
• Business analytics with Excel
• Managing employee expenses
• Process and task automation

QuickBooks Online pricing

QuickBooks Online offers four different plans, a Simple Start plan for $30/mo, an Essentials plan for $55/mo, a Plus plan for $85/mo, and an Advanced plan for $100/mo. The Simple Start plan only includes one user, the Essentials plan includes three users, the Plus plan includes up to 5 users, and the Advanced plan includes up to 25 users. As the price point increases, QuickBook Online plans offer additional functionality. You can see a full list of individual plans and features on their website here.

QuickBooks Desktop Overview

Who is QuickBooks Desktop for?

QuickBooks Desktop is accounting software that is installed on a single computer. The software is typically used by small businesses, either by the owner or a financial professional, to track money going in and out the door. 

QuickBooks Desktop features

QuickBooks Desktop features vary depending on the plan chosen, but features include:

• Track income and expenses
• Invoicing
• 100+ reports available
• Tracking sales tax
• Manage bills and accounts payable
• Time tracking
• Manage1099 contractors

Certain tiers of QuickBooks Desktop offer additional features, including industry-specific features and forecasting.

QuickBooks Desktop pricing

QuickBooks Desktop pricing depends on the annual subscription chosen, with three different plans offered. The Pro Plus plan costs $349/yr, the Premier Plus plan costs $549/yr, and the Enterprise plan costs $1,340/yr but does offer 10% off the first year of the subscription. However, if you need additional users, separate seats for each software plan are sold separately and not included in the original yearly plan cost.

What’s the difference between QuickBooks Online and Desktop?

QuickBooks Online and QuickBooks Desktop have a number of key differences that may make one more appealing to certain customers.

Subscription vs. license

QuickBooks Online is a subscription-based software with monthly pricing, while QuickBooks Desktop is an annual license. Because the Online version is a subscription, it makes it easier to have multiple users accessing the same information, while this is not necessarily the case with Desktop’s license structure. This is potentially why QuickBooks desktop charges for additional software users while QuickBooks online plans come with a specific number of users included.

Cloud-based vs. installation

QuickBooks Online is cloud-based subscription software, meaning it can be accessed from any device with a wifi connection. This means business owners who are frequently on the go or who spend a decent amount of time away from their desks can still have easy access to their financial information. QuickBooks Desktop, on the other hand, is software that can only be installed on one computer at a time. This means that it is only accessible at one workstation.

Integration capabilities

QuickBooks Online integrates with over 650 business applications to allow companies to achieve total financial transparency without the tedious manual data entry. Some of these integrations include point-of-sale (POS) software, customer relationship management (CRM) software, industry-specific software, and more. 

QuickBooks Desktop offers an API where integrations can be built with the program, but they do not have the breadth of ready-to-plug-and-play integration that QuickBooks Online offers.

Why businesses should use QuickBooks Online

Given the needs of most businesses today, QuickBooks Online is the preferred solution for the financial software. 

Cloud-based solution

The cloud-based software design of QuickBooks Online makes it a better fit for modern businesses with the ability to access QuickBooks from anywhere and on any device. This gives the flexibility to utilize Quickbooks from the office, the warehouse, on the road, and everywhere in between.

Multiple users

QuickBooks Online allows a certain number of seats for each plan they offer. For instance, the Essentials and Plus plans include three and five users, respectively. This allows businesses to have more team members have access to financial data, thus preventing data bottlenecks that can occur when QuickBooks is siloed with only one employee.

Flexible pricing model

Month-to-month pricing means businesses don’t have to pay for a large contract upfront. QuickBooks Online also allows businesses to easily shift up to different plans as their needs change with incremental increases in their monthly costs. This flexibility lets companies always have the software features they need without the hassle of downloading a whole new application to their device.

More mobile app capabilities

QuickBooks Online works seamlessly with QuickBooks mobile app to let business owners run their companies from their phones, including accessing reports, invoicing customers, entering transactions, and more. Multiple users can even access the mobile app, giving more data democratization within an organization. None of these features are possible with the QuickBooks Desktop application.

Essentially if you will ever need the ability to access QuickBooks beyond one stationary computer, your best bet is to get QuickBooks Online.

Frequently asked questions about QuickBooks Online

Is QuickBooks Online better than QuickBooks Desktop?

QuickBooks Online and QuickBooks Desktop have similar base functionality, but the Online version is a cloud-based subscription that can be accessed on any device, while the Desktop version is only available on the sole computer it is installed on. This distinction generally means that companies who need to access financial data on the go are more likely to use QuickBooks Online instead. 

QuickBooks Online also has a dedicated network of connections built out to a growing library of business applications to bring all financial information into one place. QuickBooks Desktop does not have this same infrastructure meaning that businesses who would like to connect their tech stack are better suited to using QuickBooks Online.

Is QuickBooks Desktop being phased out?

QuickBooks is discontinuing older versions of QuickBooks Desktop, as recently as the sun setting access to QuickBooks Desktop 2019 this May. QuickBooks Desktop will be discontinued in the UK, specifically after February of 2023.

So yes, you can still purchase QuickBooks Desktop today, and that new version will be supported going forward (as long as you are not in the UK), but QuickBooks is heavily encouraging new and current users to switch over to QuickBooks Online if possible. 

How do I switch from QuickBooks Online to Desktop?

The good news is that you don’t need to start over when moving from QuickBooks Desktop to Online. Instead, you can simply move your desktop file to QuickBooks Online company to import your data over. QuickBooks also is currently offering data migration assistance when users move from Desktop to Online versions. You can learn more about this offer on their website.

Next Steps

Having the right accounting software is a critical step to setting your business up for growth. Another important step is to get the right inventory management software that pairs with your financial data to help your company grow.