Pros & Cons of Marketplace selling

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When considering marketplace selling, there are a few things that you might want to think about in order to be sure you’re on the path to success and not making a strategic mistake. You got to know what are the caracteristics of the battlefield and Lengow is here to help you with this.


On your way to success, selling on marketplaces is a mandatory step to drive your business forward. Here are some pros and cons about selling through marketplaces.

Pros :

Audience is Massive : Marketplaces are among the fastest growing ecommerce websites in the world. Amazon, eBay, Pixmania or Rakuten’s PriceMinister receive tens of millions of visitors each month. And this is targeted audience that you can’t ignore.

They’ll do the tough part for you : Marketplaces deal with the serious matters of driving people through their product pages and marketing a 360° shopping offer. Often, they are also building loyalty programs that actualy outperform any initiative you could take on your own. They got a huge fire power, and they use it quite well, think about how Amazon did with its average spending per customer :

There are marketplaces for all tastes : Some of them are very wide with thousands of categories and you can sell pretty much anything on it from 99p to £10.000. Some others are very specialized and drive very targeted audience, allowing merchants to sell high-margin products. You will probably choose to balance your presence between popular and specialized marketplaces so that you can get the best of both worlds.

Marketplaces have the SEO experts you can’t afford : When selling a widely popular item on the web, try to look for your own product or category of product and you’ll see that being well positioned is not child’s play. Because thay have dedicated teams working on SEO and referencing matters, it’s likely that they will be better positionned than you. Don’t shoot the messenger, but  just use their hard work for your profit.

All 3rd-party sellers are being treated equal : It’s not a universal rule but much of the popular marketplaces have design efficient product pages that allow shoppers to find their way through multiple offers. All things being equal, you’ll get as much chance as your competitors to be seen ; which is not the case on Google because of AdWords.

New marketplaces open every day : Marketplaces are on a trending business model,  a lot of them are launching, and it will go like this for a while. On top of the big well-known marketplaces such as Amazon or eBay, you can then go on more selective and specific  ones with fewer visitors but a much better environment to display your products. Some of these new marketplaces even choose a qualitative approach by working on content and buying advices.

There’s no big deal in giving it a shot : Most of marketplaces have an hybrid business-model. To sell on the very popular ones you’ll have to pay a subsription fee of £19 to £99 + a commission on sales. The others just ask for the commission part so it’s truely a no sale, no fee basis. If you think about it, it’s not much for being displayed in front of millions of serial e-shoppers, is it? When comparing with your Adwords expenses, marketplaces are likely to be a much cheaper option.

Expand your business internationaly in just a few clicks : When thinking about selling abroad, a lot of problems are poping up in your mind : translate every parts of your website is not easy but dealing with angry foreign customers in their own language and accepting payments in foreign currencies is even more frightening… not to mention local VAT rates and regulations. Well, forget about all that, the marketplaces are already operating in several countries and ready to deal with multiple-currencies transactions and everything… you just have to focus on your core business, sourcing and selling good products.

Cons :

There are no standards in the marketplaces world : As far as I know, marketplaces have a very heterogenous functioning resulting in very different requirement from an online merchand point of view. Product catalogs have to be re-organized to the taste of each one of them and this doesn’t mean you’re done for the next ones.

Marketplaces are built on proprietary technologies : Here again, it causes many troubles to merchants when it comes to uploading an optimized catalog because they’re all so different and picky on some details that don’t bother others.  You have to talk to these people to know their way to do things in order to better adapt yourself, because they won’t.

Marketplaces get more and more selective by the time : As they are aware of their power on the market and the competition is incredibly fierce between them, marketplaces value performance and service quality even more than before. Sometimes, customers satisfaction rate will be taken into account in some ways, and you definitely want to be among the few chosen.

Too many merchants pick only one : We’ve discussed the fact that marketplace selling doesn’t cost much. So you better not put all your eggs in one basket and chose several marketplaces, some local and some europeans, some generic and some specific.

Marketplaces are not marketing channels : Of course, marketplaces are popular websites where your name and logo are displayed for almost-nothing. But it doesn’t mean that marketplaces are to be considered as free advertising spaces. First and foremost they are distribution channels. So you better consider them as a commercial weapon.

Successful marketplace selling requires excellence in Logistics : As we mentioned earlier, your success will be determined by the visibility you get on each of the marketplaces you’ll decide to sell on. You will have to carefully treat every single aspect of your distribution and shipping so that marketplaces recognize the value in your offer and give you more digital shelf space little by little.

At Lengow, we’ve specialized in all these aspects and we are skilled and willing to help you grow your business through marketplace selling. Yacine, our UK Manager will be more than happy to discuss your case further in private. Give him a call or drop him an email ! 😉

 

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Geoffray SYLVAIN