Online advertising and marketing can effectively bring more business to your online store, but the costs can quickly add up. If you want to spread the word about your brand while increasing sales of your products, consider leveraging online marketplaces. These platforms provide the perfect opportunity to showcase your brand and merchandise, opening access to new and international audiences.
- What are online marketplaces?
- Why sell on online marketplaces?
- Leading online marketingplaces
- Niche marketplace trend
- Online marketplace trend
- Selecting the right marketplace strategy
What are online marketplaces?
Regardless of the way they are structured or the revenue strategy employed, online marketplaces generally provide the following:
- A web hosting solution that allows multiple sellers to operate on a single platform.
- Transaction processing and maintenance of the website interface are provided, and some platforms also offer fulfillment services for an additional fee.
Search engine-based shopping portals, such as Google Shopping, exhibit products from multiple merchants in a way that resembles an online marketplace; however, traditionally, purchasers would have to go back to the respective retailers’ stores for further information and purchases.
Google is now providing its payment system, which takes it closer to becoming a proper marketplace. Social media networks have long advertised products linked to eCommerce websites through paid ads; however, Facebook, Instagram, Pinterest, and even TikTok currently allow transactions to be made on their sites and platforms, combining with marketplaces to form new social commerce experiences.
Why sell on an online marketplace?
Marketplaces can be advantageous for your business because:
- People find it advantageous to have the option of buying a variety of products from multiple vendors in a single transaction via online marketplaces. In 2020, six of the eight most-visited retail websites were online marketplaces that accounted for 62% of all eCommerce transactions globally.
- The marketplace provides the infrastructure and a pre-developed eCommerce site, allowing businesses to spend more time on their core operations.
- Online marketplaces provide a convenient way to reach an international customer base. Amazon has established itself as a global leader, but other regional services, such as Mercado Libre in Latin America and Rakuten in Japan, have also grown in popularity. This allows businesses to expand their market share beyond borders with minimal effort.
- Niche marketplaces have become increasingly popular, offering a variety of specialized goods and services catering to a wide range of interests. Whether it be luxury fashion items, pet supplies, or eco-friendly products, the right niche marketplace can help expose your product to an audience seeking your offer.
Leading online marketplaces
Some of the most well-known online marketplaces are operated by large retailers, while others have no connection to established brands. Popular marketplace sites include:
- Amazon. Amazon is an online platform that offers products from various third-party sellers in multiple categories, including beauty and electronics. It functions as both a seller and a forum, with items from other retailers featured alongside Amazon’s products. Those looking to start selling on Amazon can use eCommerce’s features to set up an Amazon shop.
- Shopiroller: Shopiroller is an online marketplace allowing users to find products from hundreds of stores and brands. Sellers can add their products to Shopiroller, which gives customers a single destination for finding the best deals on items they love. It features a variety of categories, including electronics, fashion, home, health & beauty, and more. Offers a wide selection of products from renowned local and global brands. It also provides helpful information such as product reviews, ratings, and detailed descriptions to help customers make informed decisions. Shopiroller also offers a range of services such as loyalty programs, promotions & discounts, free shipping options, and more. With Shopiroller, businesses can quickly reach a larger audience and increase sales.
- eBay: eBay started as an online auction site for individuals to sell their pre-owned items, but it has also become a powerful platform for brands. Most products can be bought with the “Buy It Now” option at a fixed price. With over 152 million buyers worldwide, more than half of whom are from the United States, eBay is now a native sales channel in eCommerce.
- Wish: Wish is a popular mobile-based shopping platform that offers affordable items. It has a massive reach with 950 million global consumers, 43% under 35. As such, it presents an ideal opportunity to target younger shoppers.
Niche marketplaces
While the most significant online marketplaces provide comprehensive platforms and vast audiences, getting lost in the mix can make more focused niche sites appealing. In 2021, 42% of customers purchased from a specialty marketplace, making them a popular buying option. Some of the most sought-after niche marketplaces include:
- Etsy: Etsy offers a diverse range of products, including 3D-printed trinkets and colorful cloth face masks. At the same time, it emphasizes handcrafted items from independent sellers, giving it a unique appeal. Despite this, in just one quarter alone, Etsy has generated more than $330 million in sales with an impressive yearly growth rate of 19%.
- Wayfair: Wayfair specializes in home decor and furnishings, offering various products, from kitchen tools to bedding. With over 20 million customers and 12,000 suppliers, Wayfair has become the number one online retailer for furniture in the United States. The company takes pride in its stringent seller selection process and carefully curated product catalog.
- Newegg: Since its inception in 2011, Newegg has become a go-to destination for more than 40 million customers seeking the latest electronics, entertainment media, games, and more. They rely on the tech-focused marketplace to provide them with what they need.
- ASOS: A British clothing retailer, has become one of the top fashion marketplaces by offering an expansive selection of global products from more than 800 independent designers and vintage sellers.
Online marketplace trends
Marketplaces can be invaluable assets to retailers, allowing them to stay up-to-date in the ever-changing eCommerce landscape. They provide brands with a platform to reach new audiences. Here are some of the latest trends that further emphasize the importance of marketplace initiatives:
- The world’s top 100 marketplaces generated a staggering $2 trillion in sales last year, creating an enticing environment for potential new entrants. Brands recognize the potential of online marketplaces, with 53% citing it as their significant growth opportunity. Marketplaces allow merchants to respond quickly to changes in customer preferences without high costs, which is essential in the current unpredictable climate.
- Cryptocurrency and other modern payment methods are quickly gaining traction. Credit cards, digital wallets, and even cryptocurrencies are becoming more accepted across online marketplaces. Paypal is just one example of a platform that supports cryptocurrency payments, making it possible for merchants to cater to their customers’ needs. Additionally, these marketplaces often offer “buy now, pay later” and other payment options that would be difficult for individual merchants to provide.
- When it comes to purchasing resale items, customers expect assurance of authenticity. Popularity in buying used merchandise has seen a sharp rise recently, and thredUP predicts that second-hand purchases could nearly double by 2025. Marketplaces can take advantage of this trend by providing refurbished or returned products at a reduced rate without hurting the original brand’s pricing. However, shoppers also want to ensure the item is in good condition and valid, necessitating certification before the sale. With counterfeit items posing a constant threat, putting tight standards into practice can help fortify online marketplaces’ credibility.
Selecting the right online marketplace strategy
The potential of selling on online marketplaces is vast. To make the most of it and ensure success in the long run, developing a solid marketplace strategy is essential. To help you get started, here is a brief checklist.
Decide where you are going to sell
Existing and potential buyers can help you decide which marketplaces to list on. You can also see which marketplaces your competitors target to get an idea of the most popular outlets in your product category.
Understand the tradeoffs for each marketplace
Before making your decisions regarding the products, you will offer and their respective prices, make sure you are familiar with the challenges of using a marketplace.
- Popularity and competition often go hand-in-hand in online marketplaces. While these platforms attract many shoppers, they also have numerous sellers competing for business. This can make it difficult to stand out from the crowd and may require additional expenses, such as paid listings, to secure new customers.
- Marketplace operators can become either allies or rivals of third-party sellers. Amazon, for example, has faced criticism for producing private-label goods that imitate popular items sold by other vendors on their platform. This highlights the importance of owning your eCommerce store through services like Shopiroller, which allows you to retain control over your products and profits.
- Marketplace operators usually control the data of customers purchasing through their platforms, meaning that while you may experience a rise in income and recognition, you may miss the chance to build customer connections.
- Different marketplaces have different fees for listing and selling products: Amazon offers a subscription fee or a per-item cost, while Walmart charges a percentage of each sale. Additional expenses may also need to be considered, such as Amazon’s algorithm favoring merchants who use their fulfillment service – merchants should evaluate the pros and cons of this additional cost concerning the benefits it could bring.
Pick products and set pricing.
With your exact costs determined, you can decide which products to offer and at what price. Think about stocking popular items that fit with the trends and exclusive gifts or sets; this will give your store a distinct flair without making it too obscure for customers to find.
Create a rich product feed
Carefully create your product feed that adheres to the parameters of each marketplace for how product images and text will be displayed to take full advantage of all the platform’s features.
Set and test your fulfillment process
Larger marketplace platforms may charge extra for their fulfillment services, which can be highly advantageous if your customers demand faster delivery than you can provide. It is important to evaluate thoroughly any system you set up, as the speed of fulfillment frequently affects the ranking of listings in these marketplaces’ algorithms.
Ramp up customer service
Most platforms track how quickly marketplace sellers respond to customer service inquiries and grievances, so it is important to provide prompt responses.
Execute, monitor, and adjust
Once your marketplace has been launched, monitor sales, advertising expenses, and customer service to ensure success. Take advantage of the built-in reporting tools to track performance and make necessary adjustments in product selection, pricing, or shipping options when needed. Always thoroughly review before significant events, such as the busy holiday season.
QUESTIONS AND ANSWERS
- What is the benefit of owning your eCommerce store?
- Owning your eCommerce store gives you control over your products and profits, allowing you to stand out from the competition.
- How do marketplace operators control customer data?
- Marketplace operators usually control the data of customers purchasing through their platforms, meaning that while you may experience a rise in income and recognition, you may miss the chance to build customer connections.
- What should merchants consider when using Amazon’s fulfillment service?
- Merchants should evaluate the pros and cons of Amazon’s fulfillment service concerning the benefits it could bring in terms of improved ranking in Amazon’s algorithm.
- What is the importance of providing prompt customer service?
- Providing prompt customer service is essential as most platforms keep track of how quickly marketplace sellers respond to customer inquiries and grievances, which can affect the listing’s ranking in their algorithms.
Q: What are the advantages of using online marketplaces for independent retailers?
A: Online marketplaces provide numerous advantages to independent retailers, such as reaching new audiences and providing fast fulfillment services. They also allow sellers to stand out from the crowd and may even require additional expenses, such as paid listings, to secure new customers.
Q: How can sellers tailor their product selection to take advantage of marketplace platforms?
A: Sellers should think about stocking popular items that fit with the trends and exclusive gifts or sets; this will give stores a distinct flair without making them too obscure for customers.
CONCLUSION
Online marketplaces provide numerous advantages to independent retailers, such as reaching new audiences and providing fast fulfillment services. By being aware of the benefits, targeting the appropriate marketplaces for your customers, and creating a pricing strategy that works in tandem with your main eCommerce store, you can take advantage of the power of marketplaces to attract customers and grow your business.
