What is ghost commerce?
This question has become increasingly common in recent years, as entrepreneurs search for new ways to bring their ventures to life. Thanks to the rise of ecommerce and the digital world, today’s would-be business leaders have more ways to simplify the path to profit than ever before.
In the past, the only way to start a commerce business would be to manage and run your own physical store.
Now, entrepreneurs can experiment with a variety of low-cost and low-risk strategies, from dropshipping and print on demand, to wholesale reselling.
Ghost commerce, or ghost ecommerce is one of the newest strategies to emerge in the digital landscape, appealing to many members of the creator economy. Here’s everything you need to know about this startup strategy, and how it works.
In this article:
What is Ghost Commerce? The Basics
In simple terms, ghost commerce is a strategy of online selling which involves selling goods and services without establishing a physical presence. Unlike other ecommerce strategies, which would require companies to create a store on a platform like Shopify, or a storefront on a marketplace like Amazon, Ghost Commerce eliminates the need to manage an online store.
The methodology has some aspects in common with dropshipping, marketing via influencers, and affiliate marketing. Essentially, a ghost commerce startup promotes products and directs customers to other retailers, without building a store or developing their own product.
The term “ghost” simply refers to the fact that these businesses don’t have a specific online presence as a retailer. They exist only in the digital realm, as advocates facilitating the sale of products from merchants, manufacturers, and other companies.
How Does Ghost Commerce Work?
Ghost Commerce is both a sales strategy, and a marketing strategy in one. It’s ideal for members of the creator economy, who know how to utilize influence and connections with customers to facilitate sales. Business owners in the ghost commerce landscape invest not in building their own store, but in developing relationships with a community that facilitates sales.
The concept of ghost commerce may be difficult for some entrepreneurs to understand. Instead of building a traditional ecommerce business, you instead focus on advertising products and services, recommending items to customers, and using concepts like affiliate marketing.
You basically act as the middle man for a manufacturer making your products or other items, without taking ownership or control over a storefront. With ghost commerce, you can choose between promoting the products created by other companies, or promoting items that are made for you by other organizations, but you don’t list items directly on a store.
Instead, you use things like links to other retailers and checkout pages to facilitate sales. Your profit margins and conversion rate with ghost commerce depend on how well you can manipulate the online shopping decisions of other customers. If you can convince people to purchase other people’s products, your own products created by other ventures, or specific services online, you can make a decent amount of money with ghost commerce.
How to Make Sales with Ghost Commerce
Since ghost commerce is a relatively new concept in today’s digital landscape, there aren’t a lot of step-by-step guides out there that you can follow to ensure success. For the most part, to succeed with ghost commerce, you’ll need to master a strong marketing strategy.
It starts with building a strong online presence, either on a website of your own, or through social media platforms. Influencers can use this method as a kind of side hustle, using their presence on social media to drive customers towards another ecommerce platform or site.
With ghost commerce, you’ll need to optimize your online presence to generate trust among your target audience, and convince them to value your opinions. Using strategies like content marketing with SEO (Search engine optimization), you can draw customer attention to affiliate links and product recommendations. Ghost commerce retailers often also use strategies like:
- Email marketing: Email marketing can be an excellent way to nurture customers and deliver personalized recommendations for a variety of products over an extended period of time. You’ll need to offer value on your website to convince customers to sign up for your newsletter however, which could mean offering free downloads or discount codes.
- Partnerships: Ghost commerce retailers often partner with other influencers to draw attention to the products they’re trying to promote. At the same time, these companies need to form strong relationships with manufacturers and companies to ensure they can make a commission from their recommendations.
- Data analysis: Data analysis is often crucial in the ghost commerce world, as it assists companies in understanding customer preferences and driving sales. The more information you can collect about your audience’s behavior and preferences, the more you can tailor your marketing strategy to their specific needs.
The Pros and Cons of Ghost Commerce
Ghost commerce, like many business models, comes with a variety of positive and negative attributes to consider. On the one hand, this strategy can be an excellent way for entrepreneurs and influencers to make a passive income over time. On the other hand, it takes significant effort to build and preserve your reputation in the ghost commerce space.
Pros 👍
Minimal effort: With a ghost commerce store, there’s no need to worry about building and managing your own storefront. You don’t have to deal with product listings, inventory management, orders, or fulfillment, as you’re just acting as a middleman for retail.
Low costs: Since there are no fees for anything like product creation, warehouse management, or logistics, the barrier to entry for ghost commerce is usually quite low. You can start making a profit without a huge initial investment.
Passive income: Depending on the quality of your marketing strategy, you can even use ghost commerce to make a passive income, with very little work. This makes it a great side hustle for people who know how to master influencer marketing and other strategies.
Cons 👎
Reputation management: As a ghost commerce retailer, you’ll need to make sure you’re constantly paying attention to your reputation. If a product you recommend turns out to be poor quality, your reputation can be damaged.
Profit margins: Generally, as a ghost commerce retailer, you’ll only earn a portion of the profits from every item sold. This means your earnings might be lower than they would be if you ran your own store with your own products.
Is Ghost Commerce Right for You?
Ghost commerce has grown to be an increasingly popular business model in recent years. The growth of ecommerce platforms and the creator economy has drawn more attention to the “middle men” that can help facilitate transactions in the digital world.
With ghost commerce, manufacturers and retailers can reach a wider audience than ever before. At the same time, entrepreneurs have an opportunity to make a fantastic income, with very little initial effort or investment. However, ghost commerce can be difficult to master.
It’s often challenging to stand out in a crowded landscape, and the lack of a physical storefront can make it harder to earn significant profits.
Ghost commerce is likely to be the right strategy for you if you already have significant influence in the online world, and you know how to utilize strategies like affiliate marketing, influencer marketing, and content to your advantage.
