Here Is Why Multichannel Selling Can Be A Bad Idea.
a) When you need control on your customers
While the multiple channels offer you an opportunity to meet and take your products to customers, it comes with a baggage of limitations. Here, you have to stick to the policies and rules of each platform. For instance, you may have a desire to interact with your customers through live chats or comments. However, such options may not be available on your channels of choice.
Also, you may desire to redirect your customers to your online store on their next purchase, but the e-commerce platform does not allow link-sharing nor having a conversation with your customers. So, instead of enhancing your business interaction, they might be a barrier to it. Thus, if you need control over your customers, multichannel selling might be a bad idea for you.
b) Cost minimization is your priority
As you know, multiple channels mean a high number of orders. You need to have a strategy to ensure all orders are fulfilled at the right time and to the right customer. To achieve this goal, you need to dig deeper into your pocket. Also, more channels come with an additional cost for shipping and return. Notably, each selling channel may require you to use a specific distributor or shipping courier to deliver the sales. Their choices might be beyond your budgets leading to additional costs.
As a business person with a goal of minimizing your costs, this approach may be a bad option. Mainly, if you are a small business trying to gain a substantial ground, adding extra cost can be the final nail to the crippling journey of your venture.
c) Issues with inventory management
Multichannel retailing demands efficient and effective inventory management. You must have the capability to offer real-time updates of your inventory levels across the channels. This might be a tedious and time-consuming affair for you mainly if you are a startup. So, instead of being a profitable affair, it may turn your business into a loss-making venture. The issue becomes complex when you are unable to control your inventories leading to overselling or stock outs. Hence, if you are currently struggling with your inventory management, moving to multichannel option could worsen the situation. Having this on mind, and in order to avoid it, we recommend you to manage a good third party logistics.
d) Opportunity to share your profits
The bad news about online marketplaces and other selling channel is that you do not take the whole bread home. Despite your struggles with marketing and brand awareness, the platform will receive a share of your profits. This means you share your profit with partners who are not supporting you in your challenges. Their only input is providing a platform to interact with your customers and nothing else. So, if you are the type of entrepreneur who wants to take the whole share of their profits home, multichannel selling is a bad idea.