Explaining what an e-commerce accelerator does, Bryce Warning, global VP of business development for the firm, said Pattern is a global firm representing brands in online marketplaces across the globe and is the largest seller of vitamins and supplements on Amazon globally.
Using an ecommerce accelerator to look after online sales in other countries is a very common method of getting around the many complications involved; in fact he revealed that 76% of the e-commerce market is sold by a third party, and it’s a growing trend.
He said a key benefit of the Pattern platform is the ability to consult on the optimal geographical areas for e-commerce expansion.
For example, while everyone knows that China is a huge opportunity for online sales, Warning said this is a tough market to crack and often not the right choice for growing profit.
“Ad spend in China can be upwards of 30% to 40% of revenue – three to four times what you’re probably doing so the answer may not always be as it seems," he explained. “There might be more creative ways to grow profit with smaller markets.”
To optimise profits for its clients, Pattern considers a wide range of impactors including talent, sales operations, market knowledge, non-transparency, demand, brand protection, regulation and supply chain optimization.
Regarding the importance of supply chain optimisation, Warning said: “If you’re shipping in not full truck loads of shipment of product to a country, that could be 90 cents more per unit than if you ship in full truck loads. People think ‘let’s just send product in’ but you could be losing a lot of money along the way and that could be millions of dollars lost just from not having an efficient plan of attack.”
He added that brands need to consider the cost of getting into the country from a regulatory standpoint as every country will have a vastly different associated costs.
He pointed out there is a common issue of ‘unwanted sellers’ getting their hands on product and selling online but that Pattern provides a legal service to “kick-off those unwanted sellers” before they enter the space.
International expansion framework
Nathan Winn, revenue operations data scientist at Pattern, explained that one of the ways its team works out the biggest geographical opportunities for brands is by searching Google keyword trends across the globe and identifying the areas with rapidly growing interest.
They also evaluate how concentrated the market share is for a category. In the U.S. mobile phone market, for example, around 9 out of 10 people use an iPhone, therefore it would be hard for a new brand to compete on that scale.
In addition, Pattern considers the price of products already in the market to see what consumers are willing to pay, assesses whether export costs could be overcome with retail prices and identifies countries in which competitors are performing well as indicator of opportunity.
Discussing the need for a data-driven approach to e-commerce expansion, Warning concluded: "As humans we don’t have the brain power to compete against large datasets like that. It comes down to those that have the data have so much more power to grow, to optimise, to be efficient.
"At the end of the day, the consumer is the ultimate decision maker, so advertisements and SEO and all these different strategies that Pattern employs position your product in the best possible way to succeed, and positioning yourself to be able to win is going to be the most important aspect."