DTC #107: Leverage multiple sale channels to scale

After the first few orders, the next challenge is scale to a sustainable monthly run rate. Opening more sale channels is one trick to grow at speed. I call this multi-channel approach.

Feb 25, 2024

👋 Hola! Welcome to Out of Singapore. I am Shan. I share my experience of building businesses. I started my entrepreneurial journey in March 2022. I wish I had started writing back in March of 2022. It would have been roller coaster journal. Each week was so different - new ideas, new people, new obstacles, new emotions. It could have been great drama titled - “Entrepreneur lost in the island of Singapore”. 🤣

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It’s been 10 months since the launch of the supplements brand. I call it DTC, but DTC alone doesn’t work profitably. It is an expensive channel and needs to be built from ground up - awareness, consideration, demand generation, customer management, fulfilment and tons of other things. These take away from the key focus - “revenue generation”. At the end of the day, the purpose of a brand is to generate revenue.

Hence today i will talk about multi-channel approach to scale rapidly and reliably. Let’s look at two charts - first one shows revenue split by channel and second one shows absolute revenue month on month. These are actual numbers.

Channel contribution has never been consistent

Revenue has grown consistently each month

Multi-channel approach is a short-cut to revenue generation (not really, but let’s simplify). I will talk about

What is multi-channel approach?
Multi-channel vs omni-channel?
How does multi-channel help?
How to keep focus while diversifying with multiple channels?
Why multi-channel may not work for you?

#1 What is multi channel approach?

Simply put, sell on multiple platforms together. For example, here are our sale channels

Brand dot com (aka DTC)
Shopee
TikTok
Lazada
Facebook Live channels
Robinsons (another online retailer)

We listed on all possible places we could. If you notice, all of these are online channels. It is super fast to list on online channels (except Amazon, and iHerb).

The proposition is to capture demand across different traffic destination. We didn’t know how each channel will do. We learnt new things about these channels each month. We optimized based on this information.

Fundamentally most channels are designed such that growth is capped. You will see initial growth from zero to x. Post that growth tapers due to existing competition. With more channels, we got over this limitation. Instead of 20-40% month on month, we could growth 200-300% each month. We could do even more with more investment.

Multi-channel allows you to multiply your sales frequently.

#2 Omni-channel vs multi-channel

ChatGPT defines omni-channel as -

Omni-channel refers to a multi-channel approach to sales, marketing, and customer service that seeks to provide customers with a seamless and integrated experience, no matter how they're interacting with a business. This can include interactions through various channels such as physical stores, online websites, mobile apps, social media, phone calls, and more.

Multi-channel is a subset of omni channel. Brands look at omni-channel after they have scaled to a certain volume. I, instead, recommend omni-channel for zero to one phase.

However, omni-channel dictates everything has to be same across channels - shared inventory, same promotion, same messaging and customer service. I make the distinction here - each channel is unique and hence they should be treated uniquely.

Here is how we treat them uniquely

Product offerings are unique to each
Inventory allocation (right now its same, however, would like to change).
Promotions and campaigns
Marketing investment

#3 How multi-channel helps?

In short, you leverage presence, trends and competition very similar to omni-channel marketing. One is never enough.

Users are everywhere at the same time: Users shops across multiple places and apps. Same customer may buy from our website, marketplaces or offline. Sometimes they trust one platform more than another.
Presence = awareness: Presence across multiple channels provides awareness and builds repeat purchase. It also reminds them of our presence, further boosting repeat.
Capture platform specific trends: Seasonal trends are different across the channels. Platforms compete against each other for customer’s attention. Their investments may differ from month to month. Staying at one place means you miss out on opportunities available elsewhere.
Leverage channel strength: Every platform’s strength is different. Robinsons has low sales but extremely good SEO. Shopee has great discovery and reputation. Tiktok helps connect directly with customers via live sales. Flash sale on Tiktok is 20x more effective than on Shopee.
Growth is capped: Growth on each channel is slow and you cannot double triple each month. However, two channels can both scale up rapidly independent of each other.
Competition trends shift on platforms. Shopee is highly competitive while Tiktok is an new journey for all brands. On certain months, existing large brands pour high marketing dollars on Shopee - meaning we lose out on traffic.

#4 How to focus while diversifying?

Multi channel sounds great, but it can take a brand downhill soon - scrambling for time and resources. It has to be done the right way. Here is how I do it (most important is data):

Monitor daily ROI - We spend consistent marketing dollars across channels and monitor performance each day.
Scale rapidly - If a channel starts delivering better results consistently, we scale investments and initiatives asap (a few days at max). Essentially, check the signals on a daily basis. Act fast.
Find platform specific winning formula. Execute initial hypothesis (product listing improvements, customer support, marketing, promotions) and monitor these “formulas”. Each platform requires a certain way of selling - for example TT is live sale and video ads, while Shopee is search ads, discovery and boost ads. Live shopping on Shopee is starting to catch up.
Formulas will evolve. For example - On Tiktok, we boosted livestreams to drive purchases. Worked great in month 1 and month 2. Then it stopped working. So we started testing creator videos. Then we ran ads on these creator videos. I was blown away by the efficient performance. We are closely monitoring this at the moment.
Get support from the platform team - Insiders know a great deal and can move your performance in right direction if you work closely. It happened with our Shopee store and now with Tiktok Store. Shopee has slowed because of less support.
Get help - Housekeeping such as product listing, promotions, and customer service is basic to each platform. Get help in operating this on daily and weekly basis. Could be a full time staff, freelancer, agency or virtual assistants.

The approach is - diversify, learn, focus, test, focus, test, focus, and do not stop.

#5 Why multi-channel could against you?

Not every initiative or formula should be taken at face value. Each company and its goals are unique. Here are some ways multi channel could work against you.

Resources are spread too thin: Imagine 1000 dollars getting split into 4 channels for marketing and getting zero dollars back. Same holds true for a resource split between 4 channels and failing to do even one properly.
I had to stop Amazon listing because we didn’t have resources and money to work on it.
Easy to lose focus: Being on multiple channels means you get too many requests from everywhere, and you losing focus. Plus, if you don’t monitor everything closely, you don’t know what’s working and end up not knowing the next course of action.
Each platform needs it own hard work. The uniqueness has to be identified and worked on. Just listing is not enough.

That’s it for the topic this week.

Do you think I missed key points? Write to me, I would be happy to listen and update the post (including credits).

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Thank you for reading this week. Have a great week ahead!