With Q4 2023 fast approaching, e-commerce businesses are gearing up for the year's busiest shopping season. Staying up-to-date with the latest retail trends and implementing strategic measures can help sellers boost their e-commerce profits and stay ahead of the competition.
This article can help you maximise your e-commerce sales during the upcoming quarter. We'll cover everything from diversifying your marketplace presence to tailoring your storefront for the needs of international customers. Discover how to optimise your e-commerce strategy ahead of Q4 2023.
Understanding the e-commerce landscape
The e-commerce landscape can fluctuate between seasons, requiring online sellers to get creative during the off-season.
However, the most significant selling trend over the past decade has been the switch from physical retail to online shopping. Consumer preferences for e-commerce over brick-and-mortar shopping have increased in recent years, with experts predicting that worldwide online spending will reach USD $8.1 trillion by 2026 (a 56% increase from 2021 e-commerce sales figures).
This shift has created an abundance of seller opportunities, which, as a consequence, has made the retail landscape much more competitive. With that said, setting up an e-commerce brand can still be a lucrative business venture; you just need to make sure you understand the industry landscape and use it to your advantage.
The shift from Amazon dominance
This year's Amazon Prime Day sales reached record highs of over 375 million items sold worldwide, with third-party sellers representing 60% of all paid units sold on the platform - up 5% from Q1 2022 figures. The most commonly sold product categories by third-party sellers include Home & Kitchen (35%) and Beauty & Personal Care (26%). The percentage of Amazon sellers in both categories increased by 3% from 2022 to 2023.
It's clear from the numbers that Amazon still dominates the online selling sphere. However, solely focusing your e-commerce strategy on best-selling Amazon items may not be the best plan for sustained e-commerce growth.
According to a Capterra survey conducted in Q4 2022, 99% of Amazon marketplace sellers said they would look to sell on alternative marketplace sites, such as Facebook, Google Shopping, and Walmart Marketplace, throughout 2023. This may be because Amazon raised its seller fees towards the end of 2022. As a result, 54% of the same Capterra survey respondents said they would have to readjust their Amazon pricing structures to maintain profitability. 40% also noted that they had invested too much in establishing their brand on the marketplace to give up selling there now.
Therefore, to remain competitive during this year's Q4 shopping season, diversifying your marketplace reach through sites like OnBuy and Rakuten – which have both seen site visits and revenue increase over the past year – could be a wise move.
Additionally, investing in promotions during events like Black Friday and the festive season can also help you maximise profits within your existing marketplaces, as well as help you build your brand presence on new platforms.
2. Maximising profits through alternate e-commerce strategy
Of course, there’s more to maximising profits than simply targeting more customers on a broader range of marketplaces. Controlling costs on your e-commerce website is also imperative to ensure your long-term success as a brand.
Take Shopify, for example, a top-rated e-commerce platform. Simply moving trade to Shopify Plus can save you 1% on currency exchange fees throughout Q4 if you integrate a free-to-open World Account as your payment solution.
One percent might not sound like much, but when you ramp up sales over the Q4 Christmas boom, these savings could help you maintain profitability at the tail end of the year.
With Worldfirst, businesses can access competitive rates on FX transactions globally, facilitating both selling and collecting in over 40 currencies. Setting up a World Account requires no minimum deposit fees or costs, enabling you to streamline payments across the supply chain and avoid expensive multi-currency account subscriptions.
Open a World Account for free
- Open up to 10 local currency accounts, with local account numbers
- Collect secure payments from 100+ marketplaces, overseas buyers and payment processing gateways
- Pay suppliers, partners and staff in 40 currencies without hidden fees
- Pay and get paid easily with local bank details on your invoices
- Lock in conversion rates to manage your currency risk
Strategies to increase e-commerce profit margins
1. Identifying trending items
For sellers looking to source goods well in advance of Q4, deep research is the way to go. Each marketplace hosts a best-selling or trending items list to help independent traders figure out what's flying off the virtual shelves quickly. Amazon's best sellers, or 'Movers & Shakers', are excellent places to search for trending products.
Social media tools are also perfect for identifying trending items over the holiday period, with influencers plugging affiliate links across their accounts throughout the season.
Remember to also look at seasonal retail trends that remain popular year after year. Holiday decorations, cards and party accessories are always in high demand during Q4. Sourcing affordable, quality products from low-cost territories such as China can help you capture these long-term sales trends without breaking the bank.
2. Sourcing from China: Pros and cons
China accounts for 28.7% of the world's manufacturing output, making it a major supplier of goods for businesses worldwide. Chinese suppliers are often willing to work with smaller companies and offer smaller minimum order quantities. With many manufacturers to choose from and platforms like Alibaba.com simplifying the search process, online sellers can find a wide variety of products to source from the region.
However, there are also some potential pitfalls to be aware of when sourcing goods from China. These include intellectual property protection, language barriers, and product importation and customs clearance complexities. Businesses should carefully consider these issues before partnering with a Chinese supplier.
One way to mitigate risks is using a sourcing agent. A sourcing agent can help you evaluate potential suppliers, verify contracts and documents, and communicate your needs to ensure that your products match your expectations.
Another way to overcome sourcing pitfalls is to partner with WorldFirst for all your international payment needs. Opening a World Account lets you send payments to global suppliers directly in their local currency. You can also send and receive payments instantly from one World Account to another with zero fees for same-currency transfers – helping you and your suppliers save time and costs on currency exchange.
Expanding your reach and marketplace promotions
1. International expansion
Experiencing domestic success is rewarding, but achieving recognition in new markets overseas can be transformative, with marketplaces providing the perfect platform to make that seamless leap.
To illustrate, 60% of Australian Amazon sellers in 2022 used the platform's Global Selling tools to expand their offerings to new markets and ensure seamless fulfilment with the help of Amazon's extensive logistics network.
However, being clear on your brand's positioning in potential new markets is essential, as global audiences vary massively. For example, seasonal disparity in Q4 alone could mean that trending products in the UK market for 'luxury goods' could be very different from the trending 'luxury products' found in the Australian market.
Therefore, consider tailoring your offerings to small, highly-specific niches within established marketplaces to ensure your global expansion strategy incurs less risk. This can be a more cost-effective approach than investing large sums upfront to reach a wider audience, as it will allow you to test and adjust marketing messages as your brand develops momentum in your new market.
2. Setting up effective promotions
Offering discounts to customers who purchase early can help brands generate buzz and secure sales well before the peak shopping season begins.
Bundling products at a discounted rate can entice customers to spend more, providing them with perceived added value and increasing the average order value for businesses. Google, for example, identified a 30-45% increase in search traffic for terms like 'buy one get one free' and 'loyalty programme' in 2022.
Limited-time offers also create a sense of urgency among consumers, driving quick sales and generating excitement around products or services. Q4 has many occasions you can jump on to make fast sales, including Halloween, Black History Month and Movember, so make sure your marketing captures these holiday shoppers.
3. Spreading the word
Platforms like Instagram, Facebook, and Twitter are invaluable for promoting Q4 deals. Engaging content and targeted advertising can reach a vast audience and drive traffic to sales platforms.
Moreover, partnering with influencers can give businesses access to a ready-made audience. Influencers can authentically promote products or services, making their endorsements more trustworthy to their followers. So, sign up for an influencer marketing site like Tribe Group or Upfluence to get paired up with an established social media personality.
How WorldFirst can help you maximise Q4 e-commerce profits
Finally, ensuring payments can be accepted in localised currency through marketplaces is vital to 79% of online customers, as it helps ensure they experience a streamlined checkout process.
WorldFirst offers a comprehensive suite of services for online sellers looking to optimise Q4 profits. For example, our World Account integrates with over 100 major online marketplaces, including giants like Amazon, AliExpress, and Shopify. This vast network can help facilitate your global business expansion in just a few clicks while saving around 1% on currency conversion fees.
We also offer collections and payment services in over 40 currencies, enabling businesses to operate like locals in international markets. This not only simplifies the process of managing international payments but also offers the flexibility to hold funds in your account until the exchange rate suits you.
With a track record of assisting nearly a million businesses, WorldFirst stands as a trusted partner. We ensure that money is safeguarded with leading financial institutions, offering peace of mind alongside financial solutions. Open a free World Account with us here or call us on 1800 744 777.
Disclaimer: The information contained is general only and largely our views. Before acting on the information, please consider whether it is appropriate for you, in light of your objectives, financial situation or needs. Whilst information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as of the date of the briefing and are subject to change without notice. WorldFirst shall not be responsible for any losses or damages arising from your reliance of such information.