How do you sell online?

What is the best way to sell your plants online?

What are the risks and benefits?

How do you know where to start?

In this ariticle and the ones that follow we will detail out the various ways you can sell you plants online. We will discuss the relative advantages and disadvantages and try to give you as much information as we can to make the best decisions for your growing operation.

In our first installment we will discuss online marketplaces.

Online Marketplaces

For growers seeking new market exposure putting some availability onto an online marketplace such as Amazon or LandscapeHub can be an effective strategy. Growers can find new potential customers and open new markets with services like these.  

A marketplace by definition is a common location (physical or virtual) where many vendors list their wares and compete for customers who come.

More Potential Customers

One of the pros of a marketplace is that the large number of vendors can attract larger numbers of customers. Thus more customers have a chance to interact with your products by their location in a market place. This is what I call the driveby effect, just like a shopping mall. If your products standout in the ways the customers are looking for you may get more sales.

According to Statistia Amazon.com had 2.01 billion visits in February, 2020. That’s a lot of potential buyers, but not all of them are looking for your pink pansies….

Broader Exposure

Participating in a online marketplace can yield broader geographic exposure to your business.

More customers can become aware of your products and services especially those outside your immediate service area. This comes as a natural byproduct of being on the platform. The benefit is this broader exposure can come without additional marketing spend.

Intermingled Listings

While a marketplace can garner more lookers, a con is that your products are intermingled with other vendors selling the same or different things. So in some ways it may be harder to stand out.

If there are 245 vendors selling succulents your items may not show up first in the search results. If the marketplace shows pricing you are competing directly on price in most cases. These intermingled listings make it harder to highlight other aspects of your products or service.

Marketplace costs

One advantage of using a marketplace is that you typically pay a percentage of sales for the cost of using the platform. This is true in most cases.

The marketplace platform is considered a broker of the sale between you and the end consumer and takes a fee, typically a percentage of the sale as their cut. So, if you don’t sell anything it doesn’t cost.

Depending on the marketplace, sales volume and other services you use in the marketplace platform, typical fees can range from as low as 10-15% to north of 30%.

You are not in control

A marketplace is typically template driven meaning what is shown on a page and how its designed is already set for you.

Marketplaces also operate off of rules for listings, pricing, reviews and other aspects of the online operations.

In consulting with our clients who choose to sell through Amazon we have seen instances where their pricing is changed without their action, where their products are delisted or dropped severely in results rankings. Sometimes bad reviews can result in punitive action against the lister as well. And sometimes there is no fast recovery action.

Marketplace considerations

Product

Make sure your product listing are complete and accurate. Include all the necessary keywords that you think potential customers would use when searching for the product you are listing.

Verify your spelling, punctuation and wording.

Make sure your units of measure and other features are accurate, such as sizing, weight etc.

Check your post receipt care instructions are correct and simple for a consumer to execute

Product Pricing

Make sure that your pricing on the marketplace includes any extra charges and platform fees that you pay, so that you aren’t losing money on each sale.

Consider your product pricing in conjunction with the co-mingled listings of other vendors. What do you want to show versus your competitors? Do you offer discounts? How low could you go if the platform changes your price without your action?

Customer Review Follow through

Your product online can live and die by customer reviews.

If the marketplace you plan to use allows customer reviews, then plan to interact with customers on the platform and monitor reviews.

Follow up where customers have issues or complaints.

Thank them for compliments.

Make sure that they see that you as a vendor are responsive.

Inventory Numbers

Watch your inventory numbers. In some cases you can be dropped to the bottom or eliminated from search rankings if you are out of stock.

So plan to check your marketplace site daily or more often as sales come in. If you really are sold out then you can make a note of when you may have more for those who still land on your product page.

Your other sales outlets

Many growers have multiple sales outlets. Make sure that selling through a marketplace does not negatively affect other arrangements with other product outlets you have. Most of the time its not an issue but be sure to think through if your other customers not online will consider that as competition.

Taxes

Make sure you understand how any sales/use taxes are handled on the platform.

Tax nexus, sales tax calculation and collection, and jurisdictional payment remittance are all issues that you need to understand when doing business with an online marketplace.

Taxes are especially tricky in selling across state lines. The states are becoming more aggressive on sales tax collection and have consistently broadened the definitions of what constitutes tax nexus in their state.

The marketplace user agreements typically explain what they do and what you will be required to do. Be sure and read those carefully and understand your responsibilities.

Shipping and Delivery

Each marketplace may offer many different options for the shipping and delivery mechanisms, associated charges, third party carriers and other methods of delivery.

For some growers they arrange for local pickup, say for fulfilling a landscaper order. Others may need to ship with a third party carrier or one of the more common freight companies like FedEx or UPS.

Growers who sell on Amazon can use the “Fulfillment by Merchant” process to allow Amazon to take the orders online but the grower actually does the back end fulfillment and shipping. Depending on which marketplace you are on there may be time requirement for arrival time to the customer for shipping fulfillment so make sure you know.

Make sure you understand the rules, and expectations of each type of shipping you would do for the marketplace you choose to participate in.

Banned Items

When selling live goods you need to be aware of banned item lists. Many states do not allow the importation of certain plants and varieties.

Make sure that you have understanding of what you are selling and where its going so that you wont run afoul of states banning certain items.

Payments

Marketplaces usually take the money from the end customer for a purchase, keep a percentage for their fee and send you what remains.

Investigate how you will be paid and what the payment schedule is. Some marketplaces will accrue money due you and release on a schedule like weekly or slower sometimes.

Also find out how they pay. Usually they need a bank account setup and will deposit the money there. Some may have other mechanisms. Know how your money will flow to you and when.

For those marketplaces that do direct deposit I recommend a separate bank account for that marketplace. I do not recommend intermingling this with your other business accounts. I also recommend you move the money to a different bank account once you have payment. This is just a simple risk mitigation and limits the impact of any sweeping that might be done to that account.

Takeaway

Marketplaces have many advantages for the business equipped to handle the constraints and limitations. Marketplaces can offer exposure to a large new potential customer base at the trade off of some loss of control and customization.

The grower must decide what their true competitive advantages are and if the benefits of a marketplace can accentuate those. It may be that for your business and product mix a market place is a great new sales channel.

Learn more about this great platform here or contact sales for more information about getting your product online or to schedule a demo.

In Part 2 of the series we will look at integrated shopping cart sites and how growers could use them.