Have you recently experienced declining sales in your e-commerce business? You’re not alone!
It’s been a challenging year for e-commerce sales in Australia, and many sellers had to take the brunt of declining business. Many e-commerce owners have reached out to us, expressing their concern regarding the sudden decrease in marketplace sales.
Looking deeper into the sales report showed that the problem is not restricted to a few businesses only; it is an industry-wide problem.
As a dropshipping agency owner, their problem resonates with me; we’ve also been noticing the same lately, and had to find out ways to boost sales.
Overcoming Ecommerce Challenges in 2023: A Comprehensive Deep Dive into Australian Marketplaces
Sellers on various marketplaces in Australia, like Catch, Kogan, MyDeal, and Amazon, are experiencing lower sales.
But what happened?
1. Economic Factors
Andrew Hanlan, an economist at Westpac, mentioned, “Australia’s economy hit the wall in the September quarter,” and it was surprising to see minimal consumer spending during the quarter. Sadly, the economy hasn’t risen or stabilized yet.
Inflation and escalating interest rates reduce the customer’s purchase power and confidence to spend heartily. As the cost of living pressure intensifies, making it difficult to maintain a decent lifestyle, people are cutting back on their spending on general products they already own.
Moreover, many consumers over-purchased during the pandemic, which influences their purchase decision now. They think twice when buying something they already have instead of upgrading to the latest.
2. International Competition
International ecommerce giants are another barrier in local marketplace sales. Shein and Temu are global favorites, making it difficult for local marketplaces to compete. Both these platforms acquire many customers worldwide by offering incredibly low prices. Especially, recently launched Temu is impacting ecommerce across Australia.
So, consumers with less disposable income look for more affordable shopping options, making it difficult for local businesses to survive in the presence of Shein and Temu.
For example, if Temu offers a product at AUD 8.99, any budget-conscious shopper would be tempted to try it.
3. Post-pandemic Market Saturation
When most of the world was confined to homes during the pandemic, people had no choice but to order online. With increased online buyers, the number of online sellers also surged to meet the demand and benefit from the situation.
Eventually, this influx of sellers on marketplaces resulted in a higher concentration of identical products. It makes the competition even more intense when platforms like Catch encourage sellers to follow other businesses’ best-selling listings and compete for the buy box.
It increases the pressure on sellers to maintain sales when competing with multiple other people dealing with the same products.
So, if you are simply dropshipping without building your brand, you are more susceptible to this declining change. Thus, it is crucial to distinguish your products and establish a strong business identity in the ever-competitive ecommerce landscape.
Overcoming the Obstacles: How to Stay Competitive?
When facing these challenges, it is crucial to stay competitive so you are not left behind. Here’s how you can stay competitive:
1. Establishing your Brand
Creating your brand name not only helps you with brand awareness but also allows you to protect your products. Registering your brand with a unique barcode adds a security layer to ensure your products are not copied or sold by other sellers without your knowledge. It is one of the most important elements for achieving better sales on Catch and other local marketplaces.
Moreover, a distinct product name helps you gain favorable attention from the marketplace as well. Remember that duplicated products are not only an issue for sellers but also marketplaces.
2. Specializing your Product Line
Marketplaces can bring revenue in almost all categories, and many sellers opt for multiple kinds of products to get more business. However, with increasing competition, narrowing your niche and focusing on specific products is best.
Trying to do everything may result in achieving little, but focusing on a specific area can give you better results. At the same time, many buyers do not prefer stores with multiple categories. Setting your store up with various product categories can make your brand look less professional.
Some businesses might find making their space in specific niches difficult because of the existing competition. But there’s always a way out!
For example, if you are interested in the pet category and you think you cannot be the top player, consider specializing in a subcategory, such as pet grooming.
So, find a niche, focus on it, and give your best!
3. Offering cost-effective Pricing
Reasonable pricing is critical to business success when the consumer’s purchasing power and spending decrease. Analyzing other marketplaces and Google can help you establish attractive price points.
But remember that cost-effective does not mean cheap; the price must reflect the quality of the product; do not comprise on product quality when competing with platforms that offer low prices.
4. Exploring Alternative Sales Channels
If you have only been selling on marketplaces, it’s time to step out of your comfort zone!
Marketplaces are not the only channel to sell your products and bring sales. Many successful sellers have their own websites and bring traffic from Facebook, TikTok, and other places.
Consumers have started recognizing their brand names more than before. So, if you have focused more on your websites and view the marketplaces as additional sales channels, you can bring your marketplace customers to your website. This can create a broader vision for your business and bring more sales.
Branding and becoming a leader in your niche is the future of the business to help you win against the competition. The future is yours if you start taking steps in the right direction.
So, Are You Ready to Boost Sales?
The decline in the Australian economy has impacted customers’ purchase power, making it challenging for sellers to thrive on marketplaces. Furthermore, marketplaces have also experienced an increase in the number of sellers after the pandemic. Eventually, customers have more choices, while sellers experience higher competition.
You can fight the competition by establishing your own brand and focusing on your website. It will give you a unique identity, increase brand awareness, and lower reliance on marketplaces. Make sure to offer the affordable prices and specialize in a particular niche on a platform to seem more professional and get better results.