The supremacy of marketplaces in e-commerce no longer needs to be demonstrated. In the coming years, third-party sellers are set to be the largest and fastest-growing retail channel globally, accounting for nearly two-thirds of total online sales by 2027. These online platforms are growing at double the rate of overall e-commerce.
As the importance of online marketplaces in e-commerce continues to grow, so does the number of brands and retailers selling there. The number of companies starting to sell on marketplaces rose by 46% from 2020 to 2021 in Europe; 61% of the retailers in the UK used marketplaces in 2022 (2022 Enterprise Marketplace Index by Mirakl).
The competition is becoming huge and it is increasingly exhausting and complex to get off the ground properly in marketplaces. A well-thought-out marketplace strategy that has been put through its paces is urgently needed in advance.
That’s exactly what we deliver to you in this article: An ultimate guide to a successful marketplace strategy!
Marketplace strategy: where to start?
Why do shoppers love to buy from marketplaces?
How do I find the right marketplace for my brand and products?
What are the most important steps in selling on marketplaces?
What else should you look for in your marketplace strategy?
Examples of successful marketplace strategies
What are the trends in the marketplace business?
First of all, consumers trust marketplaces. Two-thirds of them are not at all paying attention to the origin of a seller when shopping at renowned marketplaces such as Amazon, or Zalando (source: ECC Cologne/Lengow 2021). This leads to two consequences: every seller or brand has a chance to succeed on a marketplace, and the majority of cross-border e-commerce sales take place via those shopping platforms (in fact, more than 59% of European cross-border e-commerce volume!).
But why do consumers trust marketplaces?
Because they offer them a whole range of other advantages making the shopping experience as great as possible for buying products and services. They offer the largest product assortments, the most popular payment methods, the best delivery options, as well as the most interesting customer loyalty programs. In one word: convenience.
Consumers know that they can find what they need on marketplaces. There’s no reason to go anywhere else. That’s why they spend most of their time on marketplaces.
They do three main activities on marketplaces: hunt for deals, browse and buy. Shoppers that are lacking inspiration browse for deals and price promotions. The deals page is one of the most visited pages on Amazon. Consumers compare product variants, prices, ratings, reviews, and service levels. You must make sure your product is in the consumer’s short list of considered products.
You need to understand all this so you can be up to the expectations of consumers, and that you can address them where they are.
It can be tricky to search for the appropriate marketplaces in the respective categories or destination countries. It does not always have to be, nor should it be, only international top online generalist marketplaces such as Amazon or eBay that have a presence in numerous countries.
Instead, regional, nationally strong or niche marketplaces can often be the better choice (e.g. OnBuy and Fruugo in the UK, Cdiscount, Fnac/Darty, La Redoute in France, OTTO and Kaufland in Germany or bol.com in the Netherlands, Ricardo and Manor in Switzerland and Allegro in Poland).
You should also consider which product categories are most suited for the various marketplaces. For instance, one marketplace might be suitable for fashion (like YOOX or Zalando), the other for home and garden products (like ManoMano or Leroy Merlin), and another for electronics (like Fruugo or PcComponentes).
You can use this information to find out which products from your catalogue are the most relevant on a particular marketplace. To go further using specialized tools such as Lengow’s business intelligence data, companies can use their EANs and categories to research the marketplaces that are most suitable for their products and to have algorithms calculate the potential revenue for a marketplace.
In addition, pay attention to the services offered by a marketplace. One may meet your requirements better than another. Especially important is to know if the marketplace offers fulfillment services or not.
Marketplace fulfillment can be vital for a seller or brand because with it they save time no longer managing certain logistics, they don’t need to store their products in a warehouse, and often benefit from a better promotion of their products and do not have to pay capital costs.
After the selection of the marketplace(s) has been made, it comes down to other crucial steps. These would be as follows:
The way your customers perceive your products’ pricing when comparing them to your competition is known as price image. It is not uncommon for a buyer to find price discrepancies of the same product on different websites (e.g. marketplaces, direct-to-consumer channels), which may damage a brand’s credibility and reputation.
This also applies to the reputation of a marketplace, as recurrent expensive products may lead to users never returning to that website again. You need to do everything to avoid a negative price image on marketplaces. Here is how you can do it.
Competitive pricing on marketplaces is also crucial. When it comes to obtaining the Buy Box on marketplaces, the product price is one of the key factors. On Amazon for example the winners typically have lower pricing than their competitors, though not necessarily the lowest prices, because one of Amazon’s goals is to give low costs to everyone.
As the competition on marketplaces is more and more important it becomes increasingly important to stand out from the crowd. Amazon made the first move by creating an advertising platform on its marketplace to allow brands and online retailers to promote and push different products. That’s retail media. More and more marketplaces are now enabled for this advertising technology.
For sellers, it’s vital to keep in mind to save a marketing budget for these retail media opportunities on marketplaces. The marketing budget is already shifting from Google and Facebook toward marketplaces, especially Amazon. Here lies the future and the key to standing out.
After all the tips and tricks, it is now time to give a few concrete successful examples of marketplace strategies. The following brands and retailers are worth mentioning:
How Liberitae increased its marketplace sales tenfold Discover what L…Learn more
To be successful in marketplaces, you should always be open to new ideas and experiments.
In recent years, there has been an increase in the use of UGC. And that is easy to explain: Customers are much more likely to purchase a product if they can see a real person using it. This is why user-generated content is vital for e-commerce websites and online marketplaces, taking inspiration from popular social media platforms like Instagram.
UGC can be one of the best marketing and conversion tools at your disposal, turning customer satisfaction into effective advertising. One way to use UGC on online marketplaces is to prominently display it on product pages, along with the average rating and number of reviews. This can help potential customers make informed purchasing decisions, and can also increase trust in the marketplace and its sellers.
A lot of marketplaces offer live shopping experiences. Adaptability is one of the great advantages of Live Commerce: it can be integrated into your online shop, your distributors’ sites, on social networks, or on marketplaces. It is possible to broadcast the videos in the form of advertisements, via the Amazon Product Ads system, for example.
During a live shopping session, the host will present and demonstrate the product, answer questions from viewers, and encourage them to make a purchase. The video will be broadcast on the marketplace’s website or app, as well as on social media platforms. Live shopping can help to increase engagement and sales on the marketplace, as it provides a more interactive and personal shopping experience for customers.
A good question is also to see how marketplaces will embrace metaverse. It’s time to rethink boring, flat product listings. Imagine instead of browsing through the hundreds of product sheets on a marketplace or brand store when doing your shopping, you put on your VR headset and walk through a virtual store.
Brands and retailers will be able to contextualise the performance, quality and value of the product being sold. Watch out for this technology on some marketplaces, it might come sooner as expected!
Marketplaces could do tests with selected brands and merchants in the metaverse in the future, for example with virtual storefronts. This would allow sellers to showcase and sell their products in a virtual environment, using 3D models and interactive features.
What makes a marketplace successful?
Answer: There are several factors that determine whether or not a marketplace is successful. Overall, it establishes trust between buyers and sellers, provides a seamless user experience, offers a variety of products/services with competitive pricing, effective digital marketing, excellent customer support, and has a scalable infrastructure to accommodate growth.
Is a marketplace strategy important?
Answer: Yes. You need a well-defined online marketplace strategy that takes factors such as target audience and pricing into consideration in order to beat your competitors and become a market leader.
Should I sell on marketplaces?
Answer: Yes, as long as you are ready to invest in an expansion of your business. To sell on marketplaces like Amazon and eBay means to reach a wider audience, increase conversion rates, but also to expect high commission fees and competition. Make sure to use product feed and pricing solutions like Lengow in order to beat competition.
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