Consider Volume, Data and ‘Illusion of Choice’

The e-commerce marketplace has “exploded with volume” as larger companies that were comfortable relying on traditional retail methods have begun to “dip their toes into e-commerce,” says Danny Catullo, co-founder of Perishable Shipping Solutions.

For companies looking to work with third-party logistics providers like Perishable Shipping, Catullo advises them to ensure they have enough volume, “or at least be committed on the marketing side to get there,” he says. They also need to factor in their capacity to fill orders and consider shelf life to ensure they have enough inventory to meet demand.

One of the most important things, he says, is understanding the data companies can gather. For an e-commerce company that does a “small amount of volume” of 250 to 1,000 monthly orders, “it’s really difficult to be profitable,” he says. However, the company can still gather data – such as geographic sales and interest – that it can use to market its products to other providers and distributors.

“E-commerce is not just it’s own siloed strategy,” he says. “It’s actually data that you can be able to use to help grow your brand in a bigger way.”

He also advises companies to consider how they sell online and to think about providing the “illusion of choice,” he says.

“Initially, you may want to throw a bunch of things against the wall and see what sticks,” he says. “And you’re trying to understand your consumer and how they’re going to buy from you.”

A company that specializes in build-a-burger service, for example, offers a variety of ways to custom-make a burger, but they also need pre-packaged options.

“If you do that, consumers’ eyes will actually go to your special products, and they’re more apt to make those purchases, which are much easier for you to fulfill and also understand your cost as well,” he says.

For more insight from Catullo, watch the video above.

Copyright 2024 The Business Journal, Youngstown, Ohio.