Finding your way with Marketplaces
Increase your sales channels and revenue through marketplaces
So, you’re an up-and-coming e-commerce seller, and perhaps you sell through your own website or via one of the big online marketplaces. By now you will be familiar with the savings and opportunities brought by e-commerce, but are you really getting everything that an online business has to offer?
The answer to this question lies in whether or not you have made - or are considering making - the move to a multichannel approach, which is undoubtedly the future of e-commerce.
If you are still this side of going multichannel, this guide is for you. Making this move and navigating the enormous variety of marketplaces can be daunting, and certainly comes with its challenges. Which marketplace is right for your product?
How do payouts and seller fees work? Will a particular marketplace actually boost your sales? What solutions are there for logistics and supply chain efficiency? In this guide, all of these questions and more will be answered, so that you feel confident to take your business multichannel.
Before we get started, it is worth noting the many exciting advantages of jumping on this curve. By going multichannel you will enjoy extended reach to customers worldwide; reduced costs compared to a physical shop; a strengthened business model through diversification; and the ability to connect with customers and provide them with in-depth product information.
Choosing the right marketplace - suitability and size
The first thing to be clear on is which marketplaces are best for your product. E-commerce sites come in all shapes and sizes, some specialising in particular industries - like Etsy (for handmade and luxury goods) or Rakuten (for electronics) - and others acting more like an online department store - think Amazon, eBay and Alibaba.
This means you can give your product a chance on multiple marketplaces. With this ‘sell-more-and-everywhere’ attitude, your business stands a much higher chance of growing and being successful long-term whilst allowing you to develop more of a relationship with your customers.
To ensure you’re making the right choice, have a browse as a customer before joining a marketplace and ask yourself if you would be confused or excited at seeing your product listed on it. You can also look at the industries that your intended marketplace hosts to make sure it is suitable for your product.
Another good strategy in choosing a marketplace is considering its potential, competition and size.
To unpack this, potential refers to how many sales a marketplace has, competition to the number of sellers with whom you will be competing, and size to the amount of traffic a marketplace gets. Of course, each will affect the other but they are useful parameters for deciding the suitability of a marketplace.
For example, if you are selling common items wholesale, a marketplace with visitors and sales in the hundreds of millions will connect you with far more customers, but will also put you in competition with many other, often quite well-established sellers. It is important to remember that higher traffic does not translate directly into higher sales.
To get an initial sense for this, you can find a list of the top five online marketplaces and the range of monthly visitors from April to August 2020 below, as well as stats on their sales and sellers.
Understanding seller fees and payout systems
Now that you have shortlisted some marketplaces based on product suitability and traffic levels, it’s time to get your head around seller fees and payout systems. Don’t worry, they’re actually quite simple! The thing to think about is your business’s requirements for payment frequency, as well as the effect of each marketplace’s commission policy to your profits.
Aside from this is the cost, both financially and in time, of joining. Different marketplaces have different onboarding processes, including different membership rates. Check out this table for an overview of what to look for and what you can expect to find. It is not comprehensive so remember to do your research.
Multichannel selling: having a plan
Once you have chosen your marketplaces, it is important to think about your business strategy. The key here is transparency and details. Consumers can easily compare products and feel no loyalty to a particular marketplace at the beginning of the buyer’s journey. And because they cannot try the product, the information you give them becomes all the more important. So the more detail you can give in the product description, including product specifications and high-quality images, the better.
Creating targeted listings for different marketplaces will also help boost sales. Consider using educational material on your own website in tandem with affiliate marketing to ensure your customers have all the information they could want on your product. Remember, online shopping can be a fickle business, and your product may perform very differently on your various marketplaces, so be prepared and able to respond by moving products, editing listings and adapting your marketing strategy.
For now, to recap
- Find a number of marketplaces that are suitable for your product both in terms of consumer industries and traffic
- Work out which fee levels and payout schedules work for your business to narrow down your options
- Create a multichannel selling strategy that incorporates your shortlist of marketplaces
Despite all the benefits of multichannel, the move is going to raise challenges for your business, such as inventory and supply chain management, order tracking, resource allocation and data management. Sellers also often find themselves paying multiple different supply chain service providers and having to meet sales limits without much support, user interface or even efficient administration.
This is where Bezos really stands out from the crowd. Our mission is to help you make the move to multichannel - and thereafter to grow your business - in a simple and organised way. By combining all the links in the supply chain of order fulfilment, and with our easy-to-use software, we are able to provide you with a supportive and high quality service that takes care of everything. Plus, with a flexible payment structure and lower sales volume limits, you will be free to make more sales. As you navigate the world of multichannel, you can rest assured that Bezos will only make your life easier.