5 Smart Use-Cases for Setting Up a Multi-Company E-Commerce Business
Selling across multiple channels is a must in today’s e-commerce environment. In some cases, this omnichannel approach can (and should) be taken further with a multi-company e-commerce business.
The way that a multi-company e-commerce plan works is there is a parent company that controls several child companies. Each of the child companies can have their own names, brands, logos, webstores, marketplace accounts, SKUs, listing defaults, and accounting. At the same time, all of the companies that are operating under the same parent company can share vital resources like inventory, warehouse space, product catalogs, address books, and staffing.
The result of this multi-company approach is an organizational structure that can make it possible to scale and manage a complex omnichannel e-commerce business with many of the benefits associated with smaller, niche brands. Furthermore, the ability of multi-company businesses to share a consolidated set of resources, tools, locations, and labor across their brands means an increased potential for efficiency and profitability compared to singular, boutique-style online retailers.
At Sellercloud, we recognize the value of multi-company e-commerce, but we also recognize the organizational challenges that come with it. That’s why our omnichannel growth platform exhibits company settings features that make it easy for your business to create new companies, manage your existing ones, and reap the benefits of this consolidated approach to differentiation.
There are a number of high value use-cases that make multi-company e-commerce especially alluring. If any of the following align with your current business practices or your growth priorities, operating multiple companies may be particularly viable.
1. Create Unique Companies to Better Market Individual Brands and Products
It isn’t uncommon for omnichannel e-commerce businesses to find success selling different SKUs that are only tangentially related, if at all. While finding success with a single, yet diverse, catalog is possible, trying to unite a wide assortment of products under a single retail umbrella can pose challenges for branding and marketing efforts.
Spinning off related product lines into their own companies can allow you to create unique branding, websites, marketplace accounts, and marketing materials that can make it easier to build a loyal customer base as well as more efficiently cross-sell and upsell to increase order sizes.
What’s more, Sellercloud lets you manage all of these elements from within the same unified platform as if you were still operating as a singular company.
2. Isolate Your Domestic and International Sales
International e-commerce has become an increasingly profitable opportunity for e-commerce sellers to expand their reach globally. However, there are a number of challenges and differences between domestic and international retail that need attention.
For one, there are unique fulfillment and accounting considerations associated with selling abroad. You are also likely to have unique marketplaces, vendors, and channels dedicated to your international sales.
By splitting your e-commerce business into dedicated companies for your domestic and international customers, you make all of this easier to manage. Separate bookkeeping, marketplace accounts, websites, shopping carts, and third-party partners can help make your focus on international markets easier and more focused.
For example, if you sell on both Amazon US and Amazon UK, you are required to have different marketplace and API credentials for each in order to upload products and download orders. Sellercloud’s multiple companies features make it possible for an Amazon US account to be controlled from one company and an Amazon UK account to be controlled from another – all from within a single, unified interface.
3. Create Separation Between Your First-Party and Third-Party Business
There is tremendous value in transforming your third-party retail business into first-party sales. That said, many businesses opt to continue to profit from their established third-party sales channels even after expanding into direct-to-consumer (D2C), dropshipping, and/or wholesale e-commerce.
Creating and managing your first-party sales under a dedicated company – one that is separate from your existing third-party retail channels – can provide a number of benefits. One of the most significant is the ability to market and brand your first-party company without having to worry about compliance with some of the restrictive compliance measures imposed by third-party marketplaces.
This separation makes it possible to employ strategic moves to promote and grow your first-party sales like direct-to-consumer marketing, collecting and compiling certain customer analytics, and unfettered repricing strategies. If your first- and third-party business is all conducted as a single company, many of these practices could result in marketplace suspensions or account bans that could strike a costly blow to your third-party retail success.
4. Establish Unique Companies for your Business-to-Business (B2B) and Business-to-Consumer (B2C) Sales
One of the biggest mistakes you can make when expanding your B2C e-commerce brand into B2B sales is simply mimicking your B2C strategies as if the two types of e-commerce are the same. Apart from the distinct differences between customer bases, B2B and B2C e-commerce operate in fundamentally different ways when it comes to listings, orders, marketing, branding, and accounting. These functional differences can cause headaches for omnichannel brands trying to operate as both B2B and B2C entities simultaneously.
Using a multi-company strategy to create a divide between the B2B and B2C components of your business can be a way to avoid potential pitfalls.
5. Use Company Differentiation to Target Different Customer Bases
Whether any of the aforementioned situations apply to your e-commerce business or not, there are still a number of additional benefits to operating a multi-company ecommerce brand. One of them is the ability to create companies that target specific customer bases. Certain products have broad appeal across multiple niches that may not be conducive to monolithic branding or marketing approaches.
By establishing multiple, independent brands that cater to your various primary and secondary audiences, you can create listings, packaging, promotions, and templates that zero in on particular customer avatars without alienating others.
For example, if you sell a hair brush that is effective for both women and long-haired dog breeds, it would likely be bad for business to try to appeal to both applications in the same listing. By establishing separate brands, you can create one set of omnichannel listings and marketing efforts tailored to your human clientele and a separate set for dog owners.
In each of these situations, a multi-company e-commerce strategy gives your business an increased degree of flexibility and efficiency that can help scale your business and expand your reach. Sellercloud’s omnichannel growth platform makes the process simple. With our software and tools, you can operate a multi-company business with the same efficiency and convenience as a single company. Contact us directly for a free demo and see for yourself.