Ever wonder why digital agencies focused in ecommerce so often recommend only one particular ecommerce platform?
As one of the leading ecommerce agencies, we’re in a great position to answer that question. Our COO describes three ugly scenarios that often lead to the wrong platform recommendations for ecommerce businesses. Those are:
- Most agencies are too small to adequately support more than one platform, so if they recommend a platform that they don’t work on, chances are they’re not going to be able to support your business and will lose your project.
- Most agencies depend on affiliate revenue to be a core part of their business income. If they don’t get you to sign up for a particular platform they’re affiliated with, they don’t make money off of your subscription or license for years to come.
- Most agencies depend on referrals provided to them by the ecommerce platform based on the business they generate for that platform, i.e., if they don’t get you to sign up with a particular shopping cart, that shopping cart won’t send them more business.
A lot of ecommerce businesses would love to know how and why the majority of the design, development and digital marketing agencies they talk to recommend particular ecommerce shopping carts.
As a digital agency, we’re often asked how we make our recommendations to particular merchants. In this post, we’re going to look at 3 big drivers of ecommerce shopping cart recommendations in the agency space and highlight why our recommendation is more trustworthy than many you’ll receive.
Here are 3 big industry secrets that help you understand why your agency may be recommending Shopify, BigCommerce, WooCommerce, Magento or others:
1. Majority of US web design and development agencies are small.
Based on the last report we saw from Intuit, the majority of the businesses operating in ecommerce design and development are teams of less than ten (10). That creates a fundamental challenge for many agencies because ecommerce platforms and building or marketing websites on them is really complex. It’s hard to scale your business at that size to include other platforms.
The reality then is that they only really understand one platform, and they run the risk of disappointing you or losing your business if they recommend something they’re incapable of working on.
As a result, most rely on shallow talking points to demote the perceived value of one platform over another. Many of those talking points are often incomplete and an inaccurate representation of what one platform is capable of.
2. The majority of US agencies depend on a steady stream of affiliate revenue from ecommerce platforms to stay in business.
Another of the big dirty secrets is that a lot of small agencies won’t be profitable if they aren’t actively selling a particular platform on behalf of that platform. Typically, most shopping cart software will pay a recurring fee (as high as 20%) based on a merchant’s payments to that platform. That can easily build up to thousands of dollars a month in revenue for the agency that they no longer need to work for.
Should that affiliate revenue ever slip, they’d find themselves in the red on their core service lines.
Part of the reason why many of these agencies are so heavily invested in one platform for recommendations is that the affiliate revenue doesn’t come easily on the sales and marketing side. Meaning, they can’t switch to another platform and affiliate channel easily. They have too much vested in the content they have created for their current platforms and a switch would mean their affiliate revenues fall.
3. The majority of US agencies depend on a quid pro quo relationship with specific ecommerce platforms to stay in business.
If affiliate revenue wasn’t a strong enough incentive to get agencies to recommend one particular ecommerce shopping cart (examples including Shopify, BigCommerce, Magento, Netsuite, Demandware, etc), than a quid pro quo relationship with the shopping cart’s own sales and marketing teams is often more than enough.
Many shopping carts will receive leads through their own channels, often from existing merchants of their platforms. Usually, their sales organizations or partner teams will refer out that business to handpicked agencies that are most effectively selling new business for that shopping cart. Hypothetically, if an agency was selling Shopify really well, they’d be more likely to get leads referred to them from Shopify. The same goes for other ecommerce platforms.
Again, this creates a perverse incentive for that agency to recommend a particular cart. If they don’t sell your business a particular ecommerce plan, they may not get future business from that ecommerce software company.
How is Coalition different?
Coalition has grown to be one of the leading ecommerce agencies in the United States by differentiating from these particular pitfalls in a number of ways.
First, Coalition made a name for itself as an ecommerce agency by spending a lot more time vetting particular ecommerce shopping carts, identify the best in class for particular use cases, and then really understanding their underlying capabilities and directions. We originally operated our own ecommerce stores and regularly reviewed our experiences on them before we began working for others. Today, that continues to be one of the driving reasons that we have so many happy clients—we recommend the right platform to them from the get go.
Second, Coalition is much larger than most agencies. With a team of nearly 200 people, we’re well positioned to support more than one ecommerce platform at a time. We have teams devoted to WooCommerce, Shopify and Shopify Plus, BigCommerce, and Magento. We continually work on improving our training and processes for all of those teams so that they continue to get better. That also means that we aren’t risking losing your business by recommending a different platform than the one you initially thought may work for you. We’re making that recommendation based on your best interests.
Finally, we generate most of our business through our own rankings in search engines and through qualified or earned referrals. Because we don’t depend on any one platform for leads, we are able to be a reliable independent voice in evaluating the leading ecommerce platforms. That also allows us to honestly highlight their strengths and shortcomings as it pertains to your business.
If you’d like help evaluating an ecommerce platform based on your current and future business needs, contact us via email today at [email protected].