SaaS companies can use e-commerce platforms and marketplaces, much like CRMs, ERPs and other partners, as a way to reach entire ecosystems of customers. These platforms can be a key way merchants find your solution and attach. You can reach entire ecosystems of customers versus selling all your deals 1-on-1.
Key to developing an e-commerce strategy for a SaaS company is having a deep understanding of the e-commerce and marketplace landscape.
It was surprising to me at a recent SaaS software company I worked with that they defined their e-commerce strategy as being physical goods only. They failed to define an e-commerce strategy for digital goods and services. E-commerce platforms and marketplaces cater to merchants selling physical goods, digital goods and services.
Another attribute is understanding the different between e-commerce platforms and marketplaces. Each requires a different go-to-market motion and strategy for SaaS vendors looking to often their services to merchants using these platforms.
- E-commerce Platforms like Shopify and BigCommerce provide a platform for merchants to create their own e-commerce storefront in lieu of building their own website. E-commerce storefronts require merchants to market themselves to drive buyer traffic. SaaS vendors can offer add-on capabilities for these storefronts.
- Marketplaces like Amazon, Ebay or Alibaba, provide a destination for merchants to sell their products and services through a more standard storefront catalog. Marketplace storefronts come with more out-of-the-box capabilities with a bit less customization. Marketplaces offer a way for merchants to reach the customers already in that marketplace. Merchants in addition to their own website or e-commerce store might create a presence on multiple marketplaces. SaaS vendors can offer add-on capabilities for these storefronts.
Why is understanding the landscape important? Because like any partner or integration play, the platforms you decide to work with as channels will require resources to successfully develop and support; partnership development, technology integration, in some cases platform certification, marketing, content creation and maintenance, and sales support.
To just pick Shopify or Amazon to start with simply because they are the largest platforms doesn't mean they are the best fit for your solution or ideal customer. Similarly, to assume you need product-led self-service attach to leverage these platforms may necessarily redirect resources if you are a scale-up mid-market or enterprise solution.
Identifying the best set of platforms to offer your solution through and how you want to sell on those platforms is the #1 goal of any e-commerce and marketplace strategy.
Four guidelines for a SaaS solution provider in developing an e-commerce and marketplace strategy:
- Evaluate e-commerce platforms and marketplaces for their likelihood of selling the types of products and services your solution supports; whether physical, digital or services, the type for product category, and geographies in focus.Understand the e-commerce and marketplace landscape to assess the platforms and marketplaces best suited for your solution. Understand the product and services sold on each platform; whether physical goods, digital goods and/or services, and type of product categories. If your solution supports subscriptions, understand what percent of each platform is used by products or services needing subscriptions. If your solution supports gaming or software codes, understand what percent of each platform is used by gaming or software products. You want to identify platforms with the best fit for the solution you offer.Understand the geographic focus of each platform. Some platforms are more U.S.-focused, international or local to a particular country. f you sell a VAT/GST tax service, you'll want to partner with a platform supporting international markets. BuiltWith and Pacvue (formerly PipeCandy) are too good sites to help you see where specific platforms focus.Assess the competition on each platform or marketplace. If you are looking to offer am e-commerce solution for merchants, understand what competing solutions the platform or platform partners are already offering to their merchants. If there are a lot of solutions already offering a similar solution, you may want to explore other platforms and marketplaces with less competition.
- Determine your partnership approach. You can develop an add-on and list it in the app store or solution directory, or do something more strategic such as partnering with the platform to offer an embedded service or becoming a native "powered by" capability for all the platform's merchants. Apps requires much more marketing for merchants to become aware of your solution. A more embedded solution will require strategic partnership and integration with the platform vendor. More work. Harder to accomplish, but with greater benefits. A good example of a "powered by" solution is the availability of Avalara on BigCommerce for all their merchants to use for free up to a fixed number of transaction per year.
- Match your Ideal Customer Profile with the right platform and segment of their customer base. SaaS companies often think of e-commerce as only for small merchants (SOHOs, vSMBs) requiring product-led approaches for self-service attach and onboarding. That's not true. E-commerce and marketplaces can be used with sales-assisted or sales-led approaches for acquiring larger customers. Many platforms support SMBs, mid-market and enterprise companies. You can target different segments of an e-commerce customer base relative to your ideal customer profile. For example, a SaaS company targeting larger SMBs or mid-market merchants can offer its solution to Shopify Plus merchants in order to target larger customers. Even though there are many more smaller merchants on Shopify, there are over 18,000 Shopify Plus merchants! The size of these merchants can justify sales-assist approaches and more complex onboarding. Don't think of e-commerce platforms as only for product-led growth, or build a new self-service onboarding capability if that's not your core business. You can easily use these platforms for sell-through referrals for larger businesses with more complex onboarding needs.
- Think beyond the 10 ten most-common platforms! While it's easy to only think of Shopify, BigCommerce, Amazon and Ebay, there are literally hundreds of other e-commerce platforms and marketplaces. While the top platforms may have the largest set of merchants and buyers, it will be harder to stand-out on those platforms. You may want to identify secondary platforms that are a stronger fit with your solution or idea customer profile, and may be easier for you to do something more strategic with. You may also want to think of specialty platforms in a specific industry vertical, focused on B2B, or are a leader is a specific geography.Here are some examples:* E-commerce platforms focused on selling digital products: Ecwid, FastSpring, Paddle, Payhip, Podia, DPD, Sellfy, SendOwl, and Lemon Squeezy.* Marketplaces for specific types of products and services: E-Learning (Coursera, Kajabi, Podia, Teachable, Thinkific, Udemy, etc), Graphics Design (Figma, Canva, Dribble, Zazzle, Envato, Saatchi, etc), Podcast Hosting (CoHost, Captivate, PodBean, etc). Membership Platforms (Patreon, Gumroad, membership operating platforms, etc). Home services (Angi, HomeAdvisor, Porch), Talent (UpWork, Fivver, TaskRabbit, Topal, or Mayple), Legal services (LegalZoom, RocketLawyer, TrustandWill, etc).* B2B Marketplaces: B2B marketplaces range from focusing on wholesale, supply chain logistics, services, agriculture, retail, and specialty verticals. B2B marketplaces make up a $31 billion market. Resources: Bessemer B2B Marketplace Landscape Map and European B2B Marketplace Directory. * Regional marketplaces: Alibaba in Asia, Asos, B&Q and ManoMano in the UK, Otto and Zolando in Germany, Bol and CDON in the Nordics, Allegro in Poland, or Cdiscount, Fnac, and La Redoute in France.
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