TLDR: You can promote anything in ghost commerce. Just build a brand around a specific product or audience and monetize it. This requires a little time and effort to achieve the desired results by selling more products. 

Ghost Commerce: What You Need To Know

Are you searching for smart ways of earning passive income? Ghost commerce is the new buzzword in digital marketing where entrepreneurs and individuals set up online stores, websites, and other digital assets. 

In this article, you will learn:

• What is ghost commerce

• Ghost commerce vs. eCommerce

• 10 steps to set up a ghost commerce business

• Key characteristics of a ghost commerce business

• Pros and cons of ghost commerce

• Conclusion
  
  

Eager to learn more about how to convert more on Shopify? Check out the link below:

How to get more sales on Shopify

Let’s start from the basics and discover more about what ghost commerce is all about.

What is ghost commerce?

Ghost commerce is where a third party sets up an online storefront or website, creates a brand around a certain product, and sells it to its audience. Just as with affiliate marketing, sellers do not handle, store, or manage any physical inventory. Instead, they rely on websites, online stores, and other digital assets. 

Ghost commerce vs eCommerce

 In traditional ecommerce the sellers get involved in the sale. They run product management, warehousing, inventory, shipping, or other ghost commerce outsourcing processes—such as an online jewelry store or a furniture shop. 

In traditional ecommerce the seller has to factor in stocking costs and additional overhead expenses. In contrast, ghost commerce retailers incur less initial investment or costs. While the risk is lower in ghost commerce, you can still earn decent profit margins. 

With the definitions now clear, let’s explore 10 necessary steps when setting up a ghost commerce business. 

10 steps to set up a ghost commerce business

A ghost commerce venture stands a higher chance of success when you fixate on an established brand. It also works great where you have stellar content marketing skills or need more funds to run a traditional ecommerce store. 

Here is a step-by-step process on how ghost commerce works:

Pick a niche and audience

In ghost commerce, retailers leverage branding and other business strategies like email marketing to make sales. As a starter, find something you know or are passionate about. Generally, customers are always drawn toward brands they consider authentic. Narrow on a certain audience and research products they would be interested in.

Online store setup

You need to have a strong online presence where customers can access your products showcased. e-commerce platforms powered by Shopify, Wix, or WooCommerce deliver a variety of customizations that will make your products stand out on the web and mobile. OuterBox reports that 79% of smartphone users have bought something on their mobile devices in the past 6 months. 

Building trust with your audience is key to converting sales. For instance, if you are confident around a camera, this can be live product demonstrations or real-life use cases on social media. Others who are more shy can opt for affiliate marketing, where they ensure the products are easily discoverable by the intended audience.

Supplier selection

White labeling and dropshipping are mostly used when sourcing products. Read their online reviews or do a basic background check to get a reliable supplier. 

Popular supplier platforms offering a wide range of products and lists of suppliers are Oberlo, AliExpress, and Spocket. 

Product promotion

Every product listed on the ecommerce store must be detailed in a simple-to-understand way, and have high-quality images. Next, invest time and effort in creating content that builds an audience around your promotion channels. 

Start small in the form of a blog post complemented by a social media platform and track the results. Constantly isolate areas where your target audience spends the most time and double down there.

Use analytical tools

To have an idea of your store’s performance you must constantly minor your performance. Keep checking key metrics like the number of site or profile visits, conversion rate, and customer behavior patterns. A deep dive helps inform your next marketing strategies. Most analytical software dashboards are user-friendly and easy to interpret for non-technical users.

Merge web data analytics on your website so you can capture data accurately. ​Today most analytical tools can generate visual reports and are customizable to capture every important metric. 

Work with influencers

A smart way to attract pre-curated audiences to your platform is by working with influential people with a large following on social media or name recognition. It is referred to as influencer marketing. 

If executed well, an influencer can make his or her following align with a given brand. All that’s required is a testimonial of its usage or a form of endorsement where they say it aligns with their brand and values. 

Build credibility

Building credibility and trust in the world of ghost commerce is key. Customers turn away from brands or retailers with a reputation for poor quality products, no transparency on product information or complaints, and negative reviews. 

For starters, have a professionally designed website to create a good first impression. Customers also develop favorable opinions of products with a return policy beneath the product.

Customer delivery

Any possibility of friction in the delivery process must be prevented. Simplify everything from the processing of orders to packaging, and shipping processes. Keep the customer aware of the products’ movements by offering automated tracking or notifications. 

Where products are faulty it helps to have a returns policy in place. When the customer follows simple instructions they should be eligible for prompt refunds. 

Payment handling

Select a suitable payment gateway such as Stripe or PayPal for your shipping. As you drive traffic to your site, the last issue should be customers finding it cumbersome to make a payment. 

A study by the Baynard Institute puts the cart abandonment rate at almost 70%. This is worrisome for ghost commerce retailers to minimize any friction that can only lower the conversion optimization rate. 

Customer support

Given that the average attention span is just 8 seconds, according to a Microsoft study, it’s crucial to provide exceptional customer support to every visitor you attract. AI-powered tools integrated into most ecommerce sites are increasingly popular in delivering autonomy and self-service options for your customer base. 

93% of customers are likely to make repeat purchases if they receive great customer service, according to HubSpot. lookfor is a powerful customer satisfaction tool,  capable of handling up to 90% of support tickets. It delivers round-the-clock self-service support to visitors to your online store. 

Now, let’s explore ghost commerce further. 

Key characteristics of a ghost commerce business

Some characteristics of ghost commerce make them distinct from other traditional models. Let us look at them below:

• Minimize inventory management—ghost commerce involves an inventory-free model where sellers rely on third-party partners and suppliers. Among the benefits are minimal overhead costs, exposure to less financial risk, and rapid scaling. 

  
  

• Marketing and brand development—ghost commerce sellers create content the audience deems valuable. Knowledge of SEO around video, text, and images also helps in the organic promotion of ecommerce sites.
  
  

• Adaptable business models—most models are adaptable where sellers rely on income sources such as subscription services, affiliate marketing, and digital products. 
  
  

With that behind us, let us briefly look at the pros and cons of ghost commerce marketing approaches.

Pros and cons of ghost commerce

Ghost commerce is a powerful way to push product sales. It is lean and is positioned as a direct-to-consumer approach. While there are many upsides to this dynamic form of ecommerce, there are drawbacks to it. 

Here are the pros and cons:

Pros

• Overheads are low—ghost retailers do not spend on warehousing and inventory costs. 

• Flexible scalability—look at market research when scaling an e-commerce business while looking out for physical inventory constraints.

• Fast market times—introduce new products to the market without the hassle of manufacturing and stocking. 

• Marketing—allocate more resources to your marketing or brand-building efforts. 
  
  

Cons

• Supply exposures—exclusively sourcing products from third-party suppliers who handle both inventory and fulfillment means no control over quality control. 

• Nothing unique—when you just retail already existing products and do not have a physical store, there is nothing much to it. 

• Customer service and logistics—you are unable to assist customers when facing challenges with returns as you have no control of the fulfillment process. 
  
  

Finally, we shall examine the key takeaways of exploring a ghost commerce strategy. 

Conclusion

Ghost commerce is not a new concept. At times it is defined as a rebranded form of affiliate marketing. You can write a theme page on Instagram, where you send shout-outs or themed messages in turn creating an audience that can be directed towards a certain action. Alternatively, it can be a blog and sell lead data to generation companies, among others. The idea is to direct traffic to certain products of a company, and you earn money out on the sale as a commission. You can create multiple income streams by connecting your audience to digital assets providing high-value solutions to their needs. 

The “secret sauce” around ghost commerce is creating content around popular products, sharing consistently, and creating a frictionless customer experience for end users. Keep your potential customers engaged with excellent support with tools such as lookfor that provide automated yet humane round-the-clock speedy assistance. 

Smoothen your ghost commerce experience with lookfor

FAQs on Ghost commerce

Can anyone become a ghost commerce merchant?

Yes. Ghost commerce takes place across any online business. Merchants partner promoting a certain product will partner with its manufacturers or suppliers. 

Why is branding key in ghost commerce?

Ghost commerce fixates on a certain topic or niche. Remember, the retailer has no control over the production or delivery of the product on sale so they create a positive reputation behind the brand. This is by creating trustworthy content that solves problems the audience did not know existed. 

What technology investments are key to a successful ghost commerce operation?

You do not have to invest a lot to go into ghost commerce. You can opt for a Shopify ecommerce platform where pricing is reasonable. You instantly get access to unlimited add-on tools such as lookfor.ai that simplify how you directly engage with your audience.

Is ghost commerce and affiliate marketing different? 

While ghost commerce and affiliate marketing are similar, they differ in how the products are sold. In affiliate marketing, sellers earn a commission from sales done from their unique referral link. Meanwhile, in ghost commerce merchants can sell branded products to customers without handling any inventory. 

Can I do ghost commerce globally?

Yes. Most manufacturers today ship products internationally so it should not be hard to retail your products globally. All you require is an online presence and a partnership with the suppliers or manufacturers so they can handle shipping. 

How do I pick a niche for my ghost commerce business? 

Picking the right niche can either break or make your entry into ghost commerce. Take time to research and look at the top trends, competitors, and demography of your target audience. Pick a niche that best aligns with your expertise and interests.