Building an e-commerce sales success story is getting more complex and costly

 · 2 min read

CNBC recently reported "to do well on third-party marketplaces, companies need to be more hands-on with pricing, placement, advertising and more. It’s not enough just to be in the marketplace." Previous to launching symphonie, our co-founders were the Chief Technology Officer (CTO) and Chief Supply Chain Officer (CSCO) of unybrands, where we operated 20+ brands with $120M+ in annual revenue. Anecdotally, even operating at our large scale across multiple brands, we saw the same challenges that CNBC reported:

  • The number and amount of fees is skyrocketing on Amazon and other e-commerce platforms
  • It can be very challenging to understand ahead of time what your true contribution margin will be as sales come in
  • Maximizing your contribution margin is a dynamic problem that you cannot just solve once because e-commerce platform fees and customer demand change through the year
  • To truly maximize the number of contribution dollars your sales generate, you have to be on top of every "dial" that impact your contribution margin including pricing, advertising, inventory, fulfillment, and much, much more.

The marketplace of e-commerce SaaS tools to help your brand is highly fragmented horizontally and vertically, and - to be honest - full of lots of low-value SaaS products that do not truly help your brand. As CTO and CSCO, we tried a dozen different e-commerce SaaS tools to help operate our brands at scale and never found a good solution (I won't name names but you'd recognize them all), so like many e-commerce brands, we followed the path of building our own internal technology and software. But building good technology & software in a retail business is challenging because it requires a different way of thinking and operating than what you expect in retail.

It is not 2005 anymore. You can no longer simply launch an e-commerce brand and expect that "just being in the marketplace" will make you successful. The tide is no longer going with you... it is going against you. There is more competition than ever. More e-commerce platforms than ever. And customers are getting smarter about shopping online just like they learned to be smart offline.

But all this choice for a brand is also an opportunity. If you can deeply understand 1) the complete unit economics of every product you sell down to the individual SKU; 2) the interaction between all the decisions you have to make as a brand; 3) the ins-and-outs of the e-commerce platforms you sell on; and 4) how to build a presence everywhere customers are shopping, you can still make money. A lot of money.

symphonie is still in stealth but if you're a true brand operator - small, medium or large - then you will understand the complexities of being an e-commerce company in 2023. Nothing that CNBC reported will be news to you like it isn't news to us. Reach out if you want to learn more.