Key Takeaways
- An online marketplace is a digital platform that connects buyers and sellers, allowing them to conduct commercial transactions over the internet.
- These online marketplaces can range from general marketplaces like Amazon or eBay, which offer a wide range of products, to specialized marketplaces like Etsy, which caters to handmade and vintage items.
- Online marketplaces offer a convenient way for buyers to find and purchase products from multiple sellers, while providing sellers with a larger customer base and a streamlined way to sell their products.
- Online marketplaces may generate revenue through various marketplace fees, such as transaction fees, listing fees, or advertising.
At the center of the eCommerce world lies an online marketplace that provides a broad range of products from various sellers. While Amazon, Walmart, Mercado Libre, eBay, Wish, Etsy, Alibaba, and Google Express are among the most well-known marketplaces, there are plenty of other options.
Which one is right for you for selling marketplace products? Until we know what you sell online and which business model you are using, we can't be specific. But we can tell you about some popular eCommerce marketplaces, some business strategies, and how to differentiate yourself from the competition.
A Myriad of Online Marketplace Options
In today's digital era, there are over 150 online marketplaces that you can leverage to connect with new customers for your online business. These marketplaces are available in the United States and overseas, including Japan and Europe. The potential revenue that you can generate from these marketplaces is in trillions of dollars.
It might be overwhelming to consider all these options, but it's crucial to remember that you don't need to target all of them at once. Instead, you must determine which online marketplace suits your brand the best.
The Many Benefits of Selling on a Marketplace
As eCommerce marketplaces and online sales continue to gain popularity, they are always exploring new methods to satisfy their customers. This is beneficial for third-party sellers because most online marketplaces strive to make it simple for brands and retailers to advertise, sell, and complete transactions.
The reason behind this is that the easier it is for sellers to operate on the platform, the more positive the shopping experience will be for buyers. Consequently, they will be more inclined to return for future purchases. This advantage can be seen in three specific benefits:
The Expansive Customer Base
Online marketplace operators have massive pre-existing consumers who frequently shop on their online selling sites. Consider that just Amazon, eBay, and Walmart collectively attract nearly 3 billion active monthly visitors.
Surprisingly, a large portion of these consumers turn to online marketplaces when looking to make purchases. They don't bother with Google or traditional retail sites. In fact, almost half of all product searches begin (and often end) on Amazon.
If your products aren't appearing in these search results, your competitors may secure the sale on the online marketplace before customers even consider visiting your online store.
Time-to-Launch
If you're a newcomer to online sales, online marketplaces can serve as a great way to generate income and develop your brand as you strive to increase traffic to a fresh eCommerce site. After being authorized as a third-party seller on marketplaces, you simply upload your product feed and commence selling.
More upscale online marketplaces are generally simpler to incorporate with, employing a SaaS integration (Software as a Service) solution to optimize processes while simultaneously safeguarding themselves from any potential hazards.
Built-in Features
The most prominent and established online marketplaces offer various programs to assist you in navigating the marketing, sales, and fulfillment process with ease. For instance, sellers on Amazon Marketplace, eBay, and Google have access to Amazon Advertising, eBay Promotions Manager, and Google Shopping Actions.
These digital marketing programs are equipped with numerous tools to assist you in showcasing your new products to the ideal customers at the most opportune times.
Comparable options are available to aid sellers in meeting customer demands for swift, free deliveries. For example, with programs like Fulfillment by Amazon (FBA) and eBay Global Shipping, you can opt to have the marketplace's warehouse select, pack, and ship inventory on your behalf.
Start-up vs Expansion
Despite common misconceptions, selling on marketplaces doesn't have to be an all-or-nothing scenario. While there are methods to establish your business within the world of marketplaces, there are also alternative approaches that can be equally effective if you prefer to experiment with various options at your own pace.
Here are two distinct strategies to consider:
Starting a New Online Store
If your small business seeks a quick and effortless method to introduce products to potential customers, selling on eCommerce marketplaces is an excellent starting point. Although your choices may be more limited than those of established brands and retailers, several options are available to consider.
For instance, online stores such as Walmart or Target Plus, which have rigorous entry requirements, demand a history of timely deliveries and favorable feedback before authorizing you as a third-party seller.
Conversely, online marketplace platforms such as Amazon and eBay permit you to establish a seller account right away. Once you garner positive reviews and ratings on those platforms, you may apply to sell on additional marketplaces as well.
Adding to Your Existing Business
Even if you already have a successful online store, uploading your products to certain eCommerce marketplaces is an excellent method to extend your reach. In reality, you may be losing out on potential sales by not incorporating online marketplaces into your business strategy.
Why? Because customers have grown accustomed to having multiple options for purchasing the same product. This is especially evident on Amazon, where an estimated 63% of Amazon shoppers claim to always check prices on Amazon before buying from another eCommerce site.
Also remember that over 33% of consumers begin their product search on retailer eCommerce sites, with a quarter starting their customer journey on alternative online marketplaces. By expanding your online store to these market platforms, you can assist shoppers in locating the information and promotions they need to purchase products on their own terms.
Essential Steps to Leverage Online Marketplaces Successfully
To leverage an online marketplace successfully, it is crucial to follow a comprehensive set of steps that will help you optimize your product listings, attract more customers, increase your sales, and build a sustainable business. Below are the essential steps you can take to achieve these goals:
Market Your Market
Advertising is a crucial component of successful online marketplaces. Consider investing in online ads to boost your visibility and attract more customers. You can choose from a range of advertising options, including paid search, social media, display ads, and more. Ensure that you have a solid advertising strategy in place that aligns with your business goals and budget.
Integrate with Business Software
Keeping track of your expenses and revenue is essential to calculating your profits accurately. To do this, create a financial statement that outlines your expenses, revenue, and profits. This information will help you make informed decisions about pricing and ensure that you are earning a sustainable income. It's likely you can benefit from ERP or CRM integration on the online marketplace.
Optimize Your Products
To optimize your product listings, start by writing high-quality product descriptions that accurately describe your products' features, benefits, and specifications. Make sure to use relevant keywords to improve your search rankings; you may hire an experienced SEO solution to handle it for you. Additionally, include high-quality images of your products to provide customers with a clear view of what they are buying.
Connect to More Shipping Options
Offering different shipping options can help you cater to different customer needs and increase your sales. Consider partnering with multiple shipping carriers to offer more shipping options at competitive rates. Also, explore the possibility of offering free shipping, which can be an effective way to attract more customers.
Keep in Touch with Customers
Keeping your customers informed about any changes to your product offerings, shipping policies, and other important updates is crucial to building trust and loyalty. Use email marketing and social media to keep your customers up-to-date on any changes or promotions you may have. Make use of social media sites to increase customer loyalty and find out what your customers are looking for.
Be Prepared to Scale
As your business grows, it is essential to be prepared to expand your product offerings, explore new marketplaces, and expand into new geographic regions. Consider investing in new product lines or expanding into new categories to attract more customers and increase your revenue.
Use Pricing Automation
Automating your pricing strategy can save you time and increase your sales. You can use pricing automation tools to adjust your prices based on market demand and compete with other online stores. This will help you stay competitive and ensure that you are maximizing your profits.
5 Online Marketplaces to Help Scale Your Business
Most sellers can start their business quickly by focusing on a few established marketplaces. However, it is important to consider the seller fees, commissions, and requirements that come with each marketplace. Here are five options to carefully consider.
eBay
If you are looking to explore another channel with a significant global market share, eBay is an excellent option. This extensive platform provides access to 168 million active buyers worldwide who generate an annual gross market value of $83 billion. With 190 markets across the world, there are ample opportunities to expand and grow your business.
When selling on eBay, there are two primary types of selling fees to consider: an insertion fee when creating a listing and a final value fee when the item sells. However, you do not have to worry about setup, monthly, or annual fees.
Facebook Marketplace
When starting out, Facebook Marketplace is a great option, not just because it has over 2.7 billion monthly users, but also because it has no set listing fees or commissions. This makes it an attractive choice for both new and established sellers.
While selling on Facebook Marketplace is a straightforward process, there are differences between selling as an individual versus a merchant. As a merchant, you will need to sync your up-to-date inventory and wait approximately a week for Facebook to review and approve your products for sale on this eCommerce marketplace.
Amazon Marketplace
Selling on Amazon offers a major advantage of reaching the platform's 200 million Prime members, who spend an average of $1,400 per year on the site, making it a lucrative opportunity for retailers and brands.
It's essential to make your products available to Prime members, whether you fulfill orders yourself or use FBA. When starting on Amazon, choosing the right selling plan for your business is crucial.
For most third-party sellers looking to get started right away, Amazon's individual selling plan is sufficient. However, if you sell niche products such as collectibles or fine art, you will need a professional selling plan and must apply for permission.
Walmart Marketplace
Selling on Walmart Marketplace offers numerous advantages, such as access to over 200 million customers who visit Walmart's website every week, as well as affiliate websites like Jet. Additionally, there are no monthly, annual, or setup fees; Walmart solely uses commission fees.
However, Walmart has stringent entry requirements, which may require additional time before launching your business on the platform. If you believe your products will complement Walmart's existing online product portfolio, the first step is to complete Walmart's application process.
Wish
Wish is a popular cross-border eCommerce marketplace with a presence in over 60 active countries, making it one of the most downloaded global shopping apps with 90.1 million monthly visits. Merchants can take advantage of Wish's navigational shopping experience and cross-border logistics to expand their reach to users worldwide.
However, since January 2022, Wish has become an invite-only platform in order to increase user trust and improve its public image. Additionally, Wish has launched a new program called Wish Standards to incentivize merchants to provide positive customer experiences.
Expanding to a Global Marketplace Audience
Expanding your eCommerce business to a global eCommerce marketplace can be a great way to reach new audiences and increase sales. Here are some things to consider when opening up to a global marketplace:
- Research the market: Before expanding to a global marketplace, it's important to research the market you're interested in. Look at the competition, the demand for your products, and any cultural or language barriers you may encounter.
- Localize your website: To appeal to global audiences, consider localizing your website by translating it into different languages, displaying prices in local currencies, and adapting your content to local customs and cultures.
- Choose the right eCommerce marketplace: There are many global marketplaces to choose from, such as Amazon, eBay, and Alibaba. Consider which eCommerce marketplace is best suited for your products and target audience.
- Comply with local regulations: When selling internationally, you may encounter different regulations and legal requirements. Make sure you comply with all applicable laws and regulations, such as customs regulations, tax laws, and data privacy laws.
- Optimize your product listings: To stand out in a global marketplace, you'll need to optimize your product listings for search engines and local customers. This may involve using local keywords, providing detailed product descriptions, and using high-quality images.
- Provide excellent customer service: When selling internationally, it's important to provide excellent customer service to build trust and loyalty. Consider offering local customer support, fast shipping options, and easy returns and exchanges.
Expanding your eCommerce business to a global marketplace can be a great way to reach new audiences and increase sales. Just make sure to research the market, localize your website, choose the right marketplace, comply with local regulations, optimize your product listings, and provide excellent customer service.
Sell on More than One eCommerce Platform
So which is the top marketplace, and which one is right for you? Selling on multiple eCommerce platforms at once can be a great way to increase your online sales and reach a larger customer base. Here are some things to consider when selling on multiple platforms:
- Choose the best marketplace platforms: As we've found out, not all eCommerce platforms are created equal, and it's important to choose the ones that are best suited for your business. Look for platforms that have a large user base and are popular in your industry.
- Keep your inventory up-to-date: Selling on multiple platforms means you'll need to keep track of your inventory across all of them. Consider using inventory management software to help you keep track of your stock levels.
- Price competitively: Customers will compare prices across different platforms, so it's important to price your products competitively with other marketplace sellers. Consider offering promotions or discounts to attract customers.
- Streamline order fulfillment: If you're selling on multiple platforms, you'll need to make sure that you're able to fulfill orders quickly and efficiently. Consider using a third-party fulfillment service to help you manage your orders.
- Maintain consistent branding: Your branding should be consistent across all of the platforms you're selling on. This will help customers recognize your brand and create a sense of trust.
- Keep track of your finances: Selling on multiple platforms means you'll need to keep track of your sales, fees, and expenses across all of them. Consider using accounting software to help you manage your finances.
- Provide excellent customer service: Providing excellent customer service is key to success when selling on the best marketplace platforms. Make sure you're responsive to customer inquiries and complaints, and consider offering a money-back guarantee to give customers peace of mind.
Selling on multiple eCommerce platforms can be a great way to increase your sales and reach a larger customer base. Just make sure to choose the right platforms, keep your inventory up-to-date, price competitively with other marketplace sellers, streamline order fulfillment, maintain consistent branding, keep track of your finances, and provide excellent customer service.
Conclusion: It's Daunting, but It's Doable
Whether you're a new eCommerce business or a seasoned seller, online marketplaces should be a key part of your sales strategy. The good news is that getting started with this business model can be relatively easy. You can launch quickly, reach built-in audiences, and take advantage of established programs for marketing, selling, and fulfillment on each platform.
As you gain experience, you can explore more advanced strategies to get your products in front of millions of potential customers. While it may seem daunting at first, selling on online marketplaces can bring in significant profits and provide streamlined functionality. Once you experience the benefits, you won't want to look back.
What Clarity Can Do For Your Online Business
Some customers come to us looking to build their own eCommerce platform. They see a need that isn't being fulfilled in an industry, and they want to become the hub for those online sellers. More and more marketplaces and auction marketplaces are popping up to meet the specific needs that aren't being met by the big five we talked about above.
On the other hand, you may want to use an eCommerce platform mentioned above but want to use your existing business software; you'll need CRM or ERP integration. We can handle that too.
No matter why you need us, we'd like to offer you a complimentary, no-pressure discovery process. We'll help you create a plan for the next step in the growth of your business. Get in touch for some free advice and a fun demo.