We do not receive any financial compensation from any companies listed below. Comments below are based on actual experience with each company.
Choosing an e-commerce web host
We have extensive experience with both Shopify and BigCommerce, both of which are excellent complete solutions to get an e-commerce store up and running quickly, relatively affordably and without extensive HTML or other coding skills. There are other options like WordPress, Wix and WooCommerce, but we have not used those platforms and cannot comment on them.
Both Shopify and BigCommerce are excellent platforms, but there are some differences. Shopify is the industry leader, so there are many more third party applications that can be integrated to add functionality to the site at an additional cost. Shopify also offers its own payment platform, which makes it simpler to integrate taking credit cards, but that also comes as a cost. BigCommerce offers more third party payment options, some of which can be less expensive. BigCommerce also offers phone technical support, which is useful. Shopify offers better shipping rates, but this advantage goes away if you are using a third party application outside Shopify to fulfill orders. (This will be discussed in more detail in a later paragraph.) Both have various subscription levels with different monthly fees and credit card rates to meet the customer's needs.
It is difficult to recommend one platform over the other, as the choice should come down to the specific situation. We recommend checking each platform at the level that fits the situation, and comparing projected costs (base monthly fees, additional third party applications, shipping costs and credit card fees) and functionality at that level.
Adding third party apps to your web site
As indicated above, both Shopify and BigCommerce have app marketplaces where thousands of third party developers have ready-made additions to increase the functionality of a web site, typically at a monthly cost. Many of these are great, but some most certainly are not. They generally add code to your site, which has potential to slow down the site. If you remove unwanted apps, many times they leave leftover unused code which can continue to slow down the site even after removal. Even worse, if you add multiple third party applications, sometimes they cannot interact with each other or can break the site itself. Shopify and BigCommerce test these apps before approving them, but you never know.
Both app marketplaces have a 1 to 5 review system for every app on the marketplace. Before adding any app, READ THE REVIEWS. How many are there? What percent of the total is "1" and why? While reviews can be stuffed with fake 5 star reviews, 1 star reviews are likely to be genuine.
The best app we have found on Shopify is VITALS. As of September 2022, this app has over 4000 reviews with about 98% being 5 star. VITALS includes over 40 different useful apps which talk to each other for $29.99 per month. They have videos to help install each app, detailed help pages and fast and on-point customer support. Working with them has been an absolute treat compared the the many other apps we have installed and uninstalled over the years. If you have a Shopify store, we strongly recommend VITALS.
Selling on third party marketplaces
Now that you have your own website, the question is whether to also list those products on third party marketplaces. The big 3 are Amazon, Walmart & eBay, each of which we will address later in more detail one by one. The answer depends on whether you are a DTC (direct to consumer) brand, a wholesaler selling to other retailers, or a third party retailer carrying many brands, as well as your goals for the company. The tradeoff in general weighs the fixed and variable costs of listing on third party marketplaces versus the additional sales from those marketplaces minus the “cannibalization” of sales on your own site.
The answer for third party retailers is almost always that it makes sense to list on third party marketplaces, assuming the vendors of your products allow it, which is not always a safe assumption. DTC brands have a more difficult decision, again weighing net additional sales versus costs, possible deterioration of brand image, and loss of control of the entire process. The middle group is probably the most complex. There are no easy answers.
Managing inventory for multi-channel fulfillment
Let’s assume you have decided to add third party marketplaces to your distribution strategy and plan to sell the same products on your own site and one or more marketplaces. How are you going to manage inventory to sell on those marketplaces and balance inventory on all channels when a product sells on one channel? There are two options we have not tried. The first is to use a third party fulfillment house that is authorized to fulfill orders on all of your channels. An example is Deliverr, which is now owned by Shopify. Our discussions with Deliverr led us to determine that their services were too expensive, especially for low volume items. The second is to use the built in sales channel integrations in Shopify and BigCommerce which connect your store to those marketplaces and have orders flow back to your store. Our concerns regarding this option are the ability to vary prices and product descriptions across channels. Admittedly we have not evaluated this option in detail. We have chosen to go with a third option, a multi-channel inventory balancing and listing SaaS platform Sellbrite. First, Sellbrite offers a simple way to import product listings from one channel, create product listings in Sellbrite and then export those to other channels. This is particularly convenient if you want to list specific products on some sites but not others. More importantly, Sellbrite balances inventory across all channels each time a sale is made on any channel. For example, if you receive 12 of an item from your supplier, you enter 12 in inventory for that item in Sellbrite, which then updates the inventory quantity on all channels to 12. Then if someone buys 1 at one channel, Sellbrite updates the quantity to 11 for all channels within about 10-15 minutes. There are rare instances where someone has purchased all we had of an item on one channel and then again on another channel before Sellbrite updated the quantity. At most this happens once per month. We know there are several other platforms like Sellbrite which perform the same functions, but we have been very happy with Sellbrite’s service and customer support.
Shipping orders with multi-channel fulfillment
If you are only selling products on one channel and plan to fulfill orders yourself, then processing and printing shipping labels is simple. Shopify and Amazon have their own shipping platforms with discounted rates from UPS and the post office and eBay works with FedEx and the post office. As far as we know, Walmart and BigCommerce have no native shipping options, although there are likely third party apps to use within BigCommerce.
But what if you are shipping orders from multiple channels? Do you really want to go to each channel and process orders? There is a better solution. ShipStation, an SaaS that enables you to automatically have all orders from all channels funnel into one platform and ship out using their discounted UPS and postal service rates. You can also integrate your own negotiated carrier rates and compare each order on a case by case basis. We have excellent FedEx rates and can choose between FedEx, UPS and the post office for every order based on actual rates after discounts. ShipStation packing slips and shipping labels can be customized so that each sales channel has the name of the channel in case you ship under different names. ShipStation has many competitors, but we have found ShipStation to be an excellent choice for shipping all of our orders.
Credit card fraud protection services
Credit card fraud can be a major problem for e-commerce stores, especially with high end luxury goods. Credit card processors typically offer what they call "fraud protection," which is a set of rules that you can customize to determine whether to decline an order. For example, what if the customer’s billing address matches the entire credit card billing address (AVS verification) except the zip code, do you want that order declined? Maybe it was just a typo. What about the street address? Maybe they entered “St.” instead of “Street.” What if they miss the 3 digit code (CVV)?
These rules are not fraud protection; they are just rules that reflect your tolerance for risk. If the order turns out to be fraudulent, there is no protection if you accept the order. You are out the payment plus probably a $15-$20 fee. Shopify offers real fraud protection. For about 0.8% to 1% of orders paid via Shopify Pay, they will immediately reimburse you for any claims of a fraudulent transaction and fight the chargeback themselves. Note that this is only for claims of fraud, not non-receipt of products or claims of defects. A third party, Clearsale, will do the same for BigCommerce stores at a similar cost.
We have opted to engage these services and we are very glad we did. While we never had too much fraud on our sites, each claim took a lot of time to fight, and even if we won, we typically did not get paid for 90 days. We also now do not have to waste a lot of time investigating borderline orders before shipping, and possibly losing sales by rejecting good orders. We don’t even have to look at payment info other than a quick glance to see if Shopify and Clearsale are willing to guarantee the order. Shopify and Clearsale have also caught some fraudulent orders that we may not have caught in advance. We highly recommend adding fraud protection to web sites.
Shipping with the postal service (USPS)
Shipping orders with the post office is an option for every distribution channel. For purposes of this discussion, we are ignoring the need to deliver in 1 or 2 days, although sometimes Priority Mail can work. If you promise guaranteed delivery in 1-2 days, the post office is not a great option other than expensive Express Mail. For packages under 1 lb., First Class Mail is almost always the least expensive option. Ignoring special rate classes like Media Mail, packages over 1 lb. have to ship Priority Mail. Avoid Parcel Select, which is extremely slow and sometimes more expensive than Priority Mail. Here is where it gets tricky. There are several options for Priority Mail: flat rate envelopes and boxes (provided at no charge), regional rate boxes (also free), weight based pricing and cubic pricing. Not all of these options are available to every shipper, but if you ship via Shopify, ShipStation, Amazon or another platform with negotiated rates, they are.
If you know the weight and box size for your shipment, you can compare rates by all of these options and choose the least expensive. If your shipment can fit securely and safely inside a Priority Mail Flat Rate Envelope or Flat Rate Padded Envelope, this is usually the best alternative except for light weight (but over 1 lb.) shipments traveling a short distance. If not, you can check whether it is least expensive to ship in one of the flat rate boxes or regional rate boxes, or calculate the shipping charge based on the weight or the cubic volume of the package. In general, cubic rates are less expensive than flat or regional rates and mostly less expensive than the rate by weight. Almost every time we ship Priority Mail, it is in a Flat Rate Padded Envelope or by cubic volume. The post office also offers several box sizes at no charge that can be shipped using cubic rates. The 7x7x6 box is very popular.
What about insurance? Forget it. Assume that if a box is mis-delivered or stolen, it’s your problem. First Class Mail has no insurance. Priority Mail theoretically has $50 to $100 insurance, but try getting paid on it. You have to fill out a long form with lots of backup info and most claims are denied. If the package tracking says “delivered,” there is no chance of collecting if the customer claims non-delivery. About the only possible success is when the package is truly lost and tracking shows no delivery.
The post office should be in the mix for your e-commerce shipments for small and light shipments, but take into account there is no real delivery date guarantee or insurance.
Shipping with FedEx
Shipping with FedEx is simpler than the post office. FedEx has published rate tables based on distance, weight, cubic size, and residential vs. commercial, but if you are paying published rates, you are paying too much. eBay and we believe Walmart have negotiated discounts with FedEx, but Shopify and ShipStation do not. Other multichannel shipping platforms may have FedEx negotiated discounts. If your volume is large enough, you may be able to negotiate better rates with FedEx directly and integrate your account with ShipStation. This is how we operate. Negotiated rates come with an insanely long contract with all kinds of volume incentives and exceptions, so it is best to read very carefully.
What sets FedEx apart is the FedEx One Rate program. This is an expedited shipping option with flat rates based on various sizes of boxes and poly bag mailers similar to the USPS flat rate and regional rate programs. Depending upon the size and weight of the shipment, these rates are often less expensive and delivery faster than FedEx Ground. Depending upon overall volume, it is also possible to negotiate discounted rates for FedEx One Rate.
Much like the USPS, FedEx shipments can be insured, but again if the package tracking says “delivered,” there is no chance of collecting if the customer claims non-delivery. About the only possible success is when the package is truly lost and tracking shows no delivery. Delivery dates for ground are also not guaranteed at this time.
FedEx should be in the mix for your e-commerce shipments for shipments over 1 lb. or those that are small enough to qualify for One Rate.
Shipping with UPS
UPS works the same way as FedEx for ground with various rate tables. Again, If your volume is large enough, you may be able to negotiate better rates with UPS. Amazon, Shopify and ShipStation all have negotiated rates that are far better than what we have been able to get on our own and sometimes even better than our FedEx discounted rates.
UPS has also introduced in 2022 its Simple Rate plan to compete with FedEx One Rate. We have not tried this program and cannot comment at this time, but we will be looking into it and evaluating versus FedEx One Rate.
We have found that UPS customer service and delivery to be better than FedEx.
Selling on Amazon
This section is not about using Amazon Fulfillment (FBA); it addresses the question of listing on Amazon. As indicated above in the section “Should you sell on third party marketplaces,” this is a complicated issue with no one answer for every situation. Amazon clearly offers the potential for the largest sales volume, possibly 6-8 times Walmart or eBay based on our experience. But that increase in volume comes with lots of problems. Here are some of the major ones:
- If you are selling a product with multiple sellers, you have little or no control over the description of the product shown online, and Amazon is filled with product description errors, incorrect images and more inaccuracies, some egregious. You will also be fighting others for the “buy box,” which mostly goes to the seller using Amazon FBA with the lowest price.
- Amazon will bend over backwards to favor the customer at your expense. Customers can pretty much return any product for any reason at any time at your expense. Customers who claim non-delivery of shipments virtually always get refunded by Amazon at your expense, sometimes even months after the delivery tracking. You can avoid this by requiring delivery signatures, which makes no economic sense whatsoever except for high value goods.
- Amazon phone customer service frequently gives the customer incorrect information, making it even more difficult to deal with the customer’s problem.
- Amazon may remove your listings for all kinds of reasons. We have had listings removed because customers claimed we were selling fake or “inauthentic” goods even when we supplied Amazon with invoices showing they were the real thing. Amazon has also removed our listings for pricing higher than they considered reasonable, even when we were pricing at the brand’s MAP (minimum advertised price.)
This is just a small sample of the issues. There are countless more. We haven’t even touched on the cost of selling on Amazon, which is typically $39.99 per month plus a percent of sales that is often 15%. Credit card processing fees are buried in the 15%, so you are really paying 12%, which is a reasonable variable commission for Amazon’s potential sales, especially when compared to the costs of operating and marketing your own website.
The bottom line is that Amazon offers a great opportunity but beware the pitfalls.
Selling on Walmart
Selling on Walmart is the same as selling on Amazon with lower potential sales and worse technology and customer service. All of the issues addressed in the “Selling on Amazon” section apply to Walmart too. Walmart started later and has been playing catch-up to Amazon, copying virtually every Amazon feature, but in many cases doing a poor job. One advantage is that there is no $39.99 monthly fee. Disadvantages include even worse vendor customer service and all kinds of technological glitches. However, without the fixed fee, there is little downside to selling on Walmart if you are also selling on Amazon.
Selling on eBay
eBay is different from Amazon and Walmart but another large third party marketplace. Many people still think of eBay as an auction house for used goods that encourages haggling over price, but the company has been trying hard to shed that image and establish itself as a fixed price marketplace for new goods. What makes it different from Amazon and Walmart is that listings are your own, although you still may be competing against other vendors selling the same product. There is no “buy box” and customers think of your company as the seller and not the marketplace.
Because listings are your own, there is no issue on eBay with mistakes in listings (other than your own mistakes) and customers must contact you directly rather than eBay customer service for issues. eBay may occasionally remove listings for perceived price gouging or other issues, but this is less of a problem than on Amazon or Walmart.
The costs of selling on eBay are different and there are many different plans to fit your specific needs, number of listings and projected sales. There are four store levels, each with a fixed monthly fee, a per product monthly “insertion” fee for listings over the plan’s allotted number, and a “final value fee” that varies by product category and includes payment processing for actual sales. We pay more in fixed fees to sell on eBay but the variable “final value fee” is less than what we pay on Amazon or Walmart.
Again, there is little downside to selling on eBay if you are also selling on Amazon and Walmart. The only real difference is that there may still be some stigma of eBay as a junk marketplace, and some customers still try to haggle over price. Customers on eBay are more price conscious.
Selling on Etsy
Etsy is a large marketplace that is supposed to be only for hand-made goods. We have no experience with this marketplace and cannot comment on it.
Selling on social channels
Shopify and BigCommerce offer additional selling channels through various social media sites, including some or all of Facebook, Instagram, Pinterest, Tik Tok, Snapchat and Twitter. Orders on those sites then flow through to the back end of your Shopify or BigCommerce store.
There are two schools of thought here. The first is that these channels are a great way to connect with customers and build additional sales. The second is: Have you ever heard anyone say “I need to buy product x. I’ll search Facebook to buy it.”
Our products are available to purchase on 4 of the 6 channels listed, not including Snap and Twitter. We have not done a lot of marketing or advertising on the channels. The results have been no sales on Pinterest or Tik Tok, but some limited success on Facebook and Instagram. Those sales come in spurts, as if on certain days a Facebook algorithm decided to show our products across the platform.
The biggest problem we have had with Facebook and Instagram are fraudulent orders, including customers who filed fraud claims and orders we proactively believed to be fraudulent. The percentage of fraudulent orders on Facebook and Instagram has dwarfed our fraud levels from regular website orders. In addition, on BigCommerce, Facebook provides no credit card AVS or CVV information and no customer phone number or uncoded email address. There is also no fraud protection. We have no way of knowing how legitimate the order is. Shopify provides a little more information, but no fraud protection. We have resorted to emailing virtually every Facebook and Instagram customer to ask them to confirm the order, and have canceled a significant percentage of them.
So should you sell on social channels? It is worth a try, but be prepared for fraud, and it may be worth investing in marketing and not just letting customers find you.
Fulfillment by Amazon (FBA)
If you sell on Amazon, the next decision is whether to fulfill orders yourself or send them to Amazon to ship to customers. Amazon FBA has a lot of advantages, but the ultimate decision is more complicated. Key advantages include:
- FBA orders have a higher probability of getting the “buy box” and generating more sales.
- FBA costs are based on a number of factors but are almost always less than self-fulfillment.
- FBA orders may ship faster and from locations closer to the customer, enabling faster deliveries.
However, there are disadvantages too:
- FBA requires you to send products to several Amazon warehouses, with each shipment requiring detailed paperwork and labeling.
- You incur the shipping and related costs of sending products to Amazon, although Amazon passes along its shipping discounts to you.
- There can be significant delays between the time you receive products from your supplier and the time Amazon has the products available for sale, with the potential for lost sales in the interim.
- If you sell on multiple channels, products sent to Amazon cannot be offered for sale on other channels. Amazon programs like Multi-Channel Fulfillment and Buy with Prime may alleviate this issue.
- The largest disadvantage relates only to products with multiple Amazon FBA sellers. If you use FBA, you will only generate sales if you have the “buy box” and the lowest price. This situation can lead to a price war and “race to the bottom.” Your products will either be sold at a low margin or be stuck in an Amazon warehouse and not available to sell on other channels.
The last disadvantage is a big one and makes the FBA decision a lot more difficult if you sell products that have multiple sellers. However, companies selling exclusive products should strongly consider FBA.
Repricing on Amazon and Walmart
One day we priced a product for sale on Amazon and then found another supplier lowered their price by $0.01 below our price. So we lowered ours. Then they lowered theirs. This went on for a few cycles before we realized the other supplier must have been using an automated application to change their price to get the Buy Box. We searched Google and found several. The way these programs work is you set a minimum and maximum price for each product (or group of products), the program lowers your price to attempt to get the Buy Box, and stops once it hits your minimum. If there are no other suppliers or all suppliers have higher prices, the program raises your price as high as it can while still keeping the Buy Box.
Our company currently uses Repricing Solution. Unlike all of our other strong recommendations, we can only give a half-hearted recommendation on this one. It is relatively inexpensive and mostly works, but it has a lot of glitches. We continue to use it mainly because it is a headache to switch and recreate all the product pricing strategies, and it is relatively inexpensive compared to competitors. We previously used informed.co, which is a much more robust and reliable solution, but informed.co is very expensive. To some extent, it is too robust, offering many pricing strategies that make it sometimes too complex to use. Amazon itself has its own built-in free repricer which we have never used. It is our understanding that Amazon’s repricer will only lower prices and not raise them, which makes it a non-starter for us.
If you sell on Amazon and Walmart, we strongly recommend using a repricer that matches your budget and needs.
Payment processors
One cardinal rule of all business and not just e-commerce is “Make it easy for customers to pay you.” We adhere strongly to this rule and accept as many forms of payment as possible. Some of the payments we accept are all major credit cards, PayPal and PayPal Pay Later, Shop Pay and Shop Pay Installments, Google Pay, Apple Pay, Amazon Pay, Bolt and Afterpay. Why do we take all these forms of payment? There are several reasons:
- Many customers are still afraid to enter their credit card information online at a new web site, and feel more comfortable with trusted brand name payment processors they have used before to store their information so they do not have to enter the information again.
- Some of the above payment forms are much faster to use and speed up and streamline checkout for customers.
- Customers are increasingly looking for “Buy Now Pay Later” solutions.
- Payment processors do occasionally go down. We do not want our web sites to offer no way to checkout on the rare times PayPal or another processor is down. We always want to make sure there is at least one active checkout option.
We strongly recommend taking as many forms of payment to satisfy as many customers as possible.
Search engine pay per click advertising
The best way to promote an e-commerce site is advertising on search engines, primarily Google and Bing. Google is significantly larger, but ROAS (Return on Ad Spend) can be greater on Bing where there is less competition and the cost per click may be lower in what is an auction environment.
Both Google and Bing have been adding advertising options at what seems to be a frantic pace, but the majority of advertising expenditures should boil down to two, keyword ads and shopping ads.
For keyword ads, you specify the search terms that you want to bid on, several lines of ad text and the “landing page” of your site where you want the customer to go to if he or she clicks on your ad. The ads are mainly text, although there are a number of “extensions” which can include images, pricing and other additional information to entice the customer to click on your ad. You pay for actual clicks and not ad impressions.
As an example, if your company’s site sells sporting goods, you may want to bid on “baseball bats” and have that ad click through to the section of the site with baseball bats, and bid on “tennis racquets” and have that ad click through to the section with tennis racquets. You can bid on “exact” keywords, “phrase” keywords and “broad” keywords, depending upon how much leeway you want to give on the search term the customer has entered. You can also add “negative” keywords. In the example above, if you only sell men’s tennis racquets, you can have “women’s” or “women” be “negative” keywords to block people who search for “women’s tennis racquets.” You can set the exact bid you want for each keyword, give Google a little leeway with “enhanced” bidding, or throw it all to Google with Smart or Performance Max Campaigns and let Google take over all the bidding based on machine learning of the results of your ads. Bing is very similar, and it is possible to set your Google Ads account to automatically import to Bing to avoid double work.
The second major type of ads are Shopping Ads, which are slowly also morphing into the Smart or Performance Max Campaigns listed above. These require a feed from your store to Google or Bing with your products and all their features, including image, description, price and more. Shopify and BigCommerce offer some free feeds, and there are third parties on both who will configure and send these feeds for a monthly cost. These ads are simpler to implement, as Google or Bing just use your feed to show your product when customers search for the specific item or use keywords that indicate interest in the item you have to sell. There is some necessary configuration, but the process is easier to implement than text ads.
Search engine pay per click advertising is critical for e-commerce, and maximizing ROAS based on the correct keywords, negative keywords, ad text, landing pages and bids is crucial. Search engine ads appear above organic results and potentially have more impact in driving sales.
Social media advertising
If you have read the section above about selling on social channels, then you can probably predict what we have to say on advertising on those channels. We do not recommend it. If you are looking to build brand awareness and a community of followers, maybe it will work. If you can find “influencers” with a large following who match up with your products and will promote them for a fixed fee and/or commission, that may work too. But in our experience, advertising on social channels does not pay off in sales. We have tried Facebook, Instagram and Pinterest with results ranging from mediocre all the way down to nothing. If you use any of these social channels yourself in your personal life, count how many times you saw an ad and actually bought something because of that ad. That should give you an idea of the impact social media ads have in directly generating sales.
As for influencers, Shopify purchased an influencer app Dovetale and has rebranded it as a free Shopify app called Shopify Collabs. We tried it and found that it is simply a large database of who is on what social media channel and how many followers they have. Influencers can possibly find you, but we had no success and deleted it. The app has horrible reviews. There are other apps to find influencers, but we cannot comment on them.
Search engine optimization
Organic traffic to your web is extremely valuable. Organic traffic can mean sales with no advertising costs, which means higher margins. Yet we have never spent a single dollar on search engine optimization. Why?
First, there are so many ads at the top of Google and Bing pages that being the top ranking organic result may not even be good enough. Second, Google and Bing frequently change their algorithms, so investing in SEO may be worthless tomorrow. Third, ask any two SEO firms what to do to optimize a page and you will get two different answers. We don’t believe anyone knows except Google and Bing themselves.
If you have an e-commerce site, you will likely receive several spam emails every day claiming they can get your site to the top of Google. Don’t believe them and don’t hire them.
Google has been clear that the way to optimize a web page is to provide good content that loads fast and is not duplicated elsewhere on the web. Make the content read naturally, and don’t stuff it with unnecessary and repetitive keywords. Shopify and BigCommerce have built in tools that help with SEO for each page.
Our sites do not necessarily rank that high on search engines but we don’t believe that it is worth the cost of third parties to try to improve rankings. We just do our best to follow Google's suggestions.
