Having a successful internet marketing plan has become more critical than ever in our post-pandemic digital era. Online marketplaces such as eBay or Amazon might be advantageous in this sense, particularly if you operate a small business.
You can increase your audience size and sell more items, but you still require a plan in place that attracts your target clients and boosts sales.
In this post, first, we will explore the world of online marketplaces and the benefits they can offer to your organisation. In the process of considering these markets, we will review the top five eCommerce marketplaces and how starting selling on online marketplace can boost your engagement and sales conversions over the time.
So let’s get started.
What is an Online Marketplace
A website or app that connects customers with businesses or individuals selling products or services in the B2C and B2B sectors functions as an online marketplace or eCommerce marketplace.
Although most marketplace owners do not provide any items or services themselves, this isn’t always always the case. They are in charge of providing a marketplace where buyers and sellers connect.
Generally there are four primary types of online marketplaces: Horizontal vertical, Hybrid, and Global.
- A Horizontal marketplace is a shopping platform that offers the same kinds of products from different sellers.
- A Vertical marketplace is a shopping platform that offers products with similar features.
- A Hybrid marketplace is a shopping platform that sells not only the products they’ve manufactured but products of other brands. Plus they allow customers to complete the checkout process on the same platform.
- A Global marketplace sells all sorts of products from different vendors from across the globe.
The annual online marketplace report of 2021
Marketplace unicorns have increased 70% since January 2020 to more than $5 trillion in valuation, outpacing the whole technology sector.
Since January of 2020, unicorn values have increased 70% more than they did for Nasdaq.
Food delivery, fashion, and digital health have all outperformed other sectors over the next two years.
As of April 2021, a total of 370 unicorns (startups that achieve valuations of over $1 billion) have been formed throughout the globe, however, the concepts and future of online markets are always evolving.
On the exploration side – through comparison and search sites, large consumer spending categories including houses, automobiles, and employment became digital in the 2000s.
Online marketplaces are about to give birth to a new generation of online marketplaces that employ vertical integration, integrated finance, and increasing consumer online penetration.
Online marketplaces were responsible for 50% of eCommerce transactions in 2019. A study has estimated that the economy will get a boost of around $1.7 trillion due to the market.
Experts believe that by the end of 2024, the market capitalization is expected to increase to $7 trillion. Due to the increased use of marketplaces, more merchants are choosing for them instead of building their own website.
Online marketplace vs eCommerce platform: Which one should I choose?
If you’ve talked to other company owners, you’ve undoubtedly heard the advantages and disadvantages of both choices.
How can you know which is best for your specific situation?
While each sort of ecommerce sales platform has advantages, there are some significant differences between the two solutions. We’ve highlighted some of the benefits and drawbacks of each for small to medium-sized enterprises looking to sell more items online.
Benefits of selling on an online marketplace
Looking at the rapid expansion of the marketplace, company owners have the opportunity to use the marketplace business model and develop unique solutions for their organisations. Here are some of the notable perks of setting up your own online marketplace.
They can pick an income source that best suits their market segment and business goals. The way marketplace owners make money influences the platform’s success. Commissions, listing fees, memberships, lead generating fees, advertising, and extra services are typical monetization strategies. You can utilise a mix of monetization methods, but it’s preferable to start with one.
Premium listings are how Craigslist and OLX generate money. eBay, Uber, Etsy, and Booking.com are all commission-based businesses.
When compared to setting up an eCommerce website, the cost of deploying a marketplace application is virtually the same. Because the operation of an e-marketplace is extensive, its underlying logic will support many distinct types of suppliers.
Marketplaces provide businesses with an incredible chance to manage their supply chain without making an upfront cost in a brick and mortar store. Suppliers may construct a virtual business card with reviews and ratings from customers to help buyers make educated purchasing decisions.
To attract both goods and service suppliers and consumers, a marketplace can provide reduced costs, increased income possibilities, a greater user experience, a much more enticing brand, and a friendlier app environment than a real location-based marketplace.
Drawbacks of selling on an online marketplace
Pre-launch promotion is one of the stumbling blocks on the path to market success. In a separate post, we discussed strategies for promoting your marketplace prior to its launch.
When you’re just getting started, it’s prudent to build an MVP version of your online marketplace and establish a client base if you don’t already have one. After building a strong client base, you may spend in increasing the functionality of your marketplace.
Why you should sell on your eCommerce website
Shopify and other ecommerce platforms are reshaping the world of online retail. They provide several benefits, including a robust library of information and suggestions for firms who choose to work with them. Additional advantages of retailing on eCommerce platforms include the following.
- Complete freedom over site design, functionality, and navigation
You manage your own website, and the ecommerce platform integrates a range of tools to assist you in conducting business. You may alter your logo or color scheme to conform to new branding standards. Additionally, you may customise aspects such as the shopping cart’s functionality and transaction methods as desired.
- No-on site competition
Your website will only sell your products, and you will never have to pay for advertising to improve your site’s ranking or to ensure that your listings show prominently above comparable things offered by your rivals.
On the other hand, third-party marketplaces may produce and sell their own white label items, which they may rank in search listings. An ecommerce platform is perfect for individuals who wish to become the most actively advertised brand in their sector.
- Fewer sales rules and restrictions
While the majority of ecommerce systems prohibit the selling of illicit goods or highly restricted commodities, you are generally free to sell whatever you want. If a consumer is dissatisfied with an item you sell, you may resolve the issue on your own terms without risk of being suspended or banned from a platform.
Drawbacks of selling on your eCommerce website
At this point, including an eCommerce website into your thriving brick-and-mortar store could seem like a good idea. However, just as you should investigate the advantages of eCommerce, you should also investigate the disadvantages.
Security and privacy issues
Personal information, notably debit and credit card numbers, are still hesitant given online. Due to the rise in online fraud, online shops must have secure systems along with encrypted software for collecting payments.
You might still get orders but it’s one of the primary concerns of customers these days,
Losing sales during site crash
On the flip side, the biggest problem an eCommerce business has is when your website is down and people cannot purchase anything from your store. Make sure your site is hosted on the proper platform, which is why it’s so critical.
A popular example is that if you pay the least hosting price, then you’ll experience a rush in traffic when you acquire a large number of high-converting ads, or when you appear on television shows like Shark Tank.
Since Shopify includes free hosting in their monthly cost, you may have a server that is of exceptional quality. Until recently, sites were only down once in the history of the Internet. Ecommerce sites were the only sites that were affected, although non-ecommerce sites were as well.
Social media sites including Twitter, Spotify, and Soundcloud were impacted by this incident. There was a fix developed on the same day the problem was discovered. Platform crashes such as those that occur on Shopify are infrequent enough that it’s unlikely to have a significant impact on your business.
5 Best online marketplaces you should consider
You now understand that there are unquestionably several advantages to selling your items through marketplaces. However, with such a large selection at your disposal, how can you determine which ones are suitable for you?
To assist you in your quest, here are five of the most popular internet markets. Each is distinctive in its own way, so use this guide to choose which marketplace will not only help you to earn a substantial amount but make you stand out among your competitors.
So without any further ado, let’s dig in.
Amazon has grown to be the US’s top ecommerce site. Amazon is one of the most prominent online marketplaces, with 5 million marketplace vendors and 197 million monthly US customers. It’s excellent for merchants who really want exposure to billions of buyers and can manage the traffic spikes.
The Amazon marketplace’s stringent listing rules are one of its primary draws. So whether customers view your items or an Amazon listing, everything appears the same. This is beneficial since your items instantly gain the same reputation as Amazon’s, increasing sales.
The first is from Matein, while the third is from Amazon.
No one cares about a seller’s name. Shoppers will notice your items if they are priced competitively.Sellers love Fulfillment by Amazon (FBA) scheme.Amazon packs and transports your products using FBA. No need to store inventory or hire extra employees to oversee fulfilment. FBA also implies Amazon handles returns.
As part of the affiliate scheme, individuals in your niche receive their own fake storefront. Whenever they advertise your items, you receive more visibility and revenue.
Finally, the Amazon marketplace simplifies your advertising by including it as a built-in function. Custom shop pages are used to route users to an Amazon page that features more of your items.
The cost of the Amazon marketplace is $39 per month plus any additional transaction costs.
In recent years, the eBay platform has developed from one that exclusively sells used products to a major ecommerce platform. The type of marketplace where you may buy new and used goods, and where you can utilise the auction feature to resell your goods at a greater price.
eBay doesn’t need you to apply to utilise it. The first step is to create an account and begin listing. An estimated 180 million people are now active monthly, which means there are endless possibilities to gain attention.
Even if you are just getting started and don’t have a website, the eBay Seller Hub is there to assist you in running your business. If, for example, you were to conduct a campaign on eBay, and print shipping labels on your own, it would be an example of the above.
You not only know which goods are the most popular, but you have insight into trends in the marketplace so you can see which products sell the most, what promotional campaigns attract customers, how long it’ll take you to dispatch orders, and much more.
Three options are available to you. A listing cost is not included in the Standard plan, however there is a fee when things sell. With the Plus plan, $13.50 a month, you get access to more services. The Premium plan will cost more and come with more features, but will be disclosed later this year.
The world’s largest retailer, Walmart, launched an eCommerce website, Walmart.com, in 2000. 2018 saw online sales rise by 43% as eCommerce sales continue to expand at a very rapid pace.
For the medium to big merchants that wish to enhance their visibility, the Walmart marketplace is like Amazon. To apply, sellers have to go through an application procedure. Once accepted, they get access to over 110 million monthly online shoppers.
You must implement rapid order fulfilment procedures, a large selection of high-quality items, and aggressive pricing in order to be authorised.
However, because Walmart does not accept merchants that use just FBA, drop shippers can still sell through Walmart. Consider this: As a drop ship seller or a vendor, you are limited to only one of these options.
Walmart’s extensive history means that customers know the brand well. To benefit from this recognition, you may sell on the marketplace as a marketplace seller. As you can see, your listings appear quite similar to Walmart’s. Use your price, return info and custom shipping to stand out and improve your sales for product categories to drive plenty of traffic.
In addition to customer assistance and safety measures, Walmart’s marketplace gives shoppers access to other advantages, like their ability to resolve problems and return purchases.
You also have the benefit of numerous service providers being integrated into the marketplace, so you may control the selling process as you’d want. In other words, integrating with Deliverr lets you send your items in two days instead of the standard five.
This company doesn’t charge a monthly fee, instead charges a referral fee on purchases.
This online marketplace caters to customers who are searching for unique things, making it an excellent venue for small- to medium-sized merchants that are focusing on handmade or antique items.
Etsy merchants sell items that have nothing to do with the Etsy brand. Shoppers understand that they’re buying your items instead of the marketplace’s offerings.
Be aware of how the vendor names appear on the search results page.
Shoppers will be routed to your personalized Etsy storefront when they click on your store brand name inside product pages.
Defining your brand’s identity in the absence of a website is extremely important if you don’t have one.
Etsy offers the freedom to establish a devoted client base as you expand since you may create and nurture a product and brand recognition that is just starting off.
When you’re competing with 33 million consumers for vintage clothes, jewellery, and collectibles, you will discover a perfect group of clients to go after.
If you sell in shops or marketplaces that are only open for a short time, you may use the Sell on Etsy app to do all of your store management from anywhere.
Since you’re just getting started in internet advertising, Etsy can also assist you out. To obtain as much exposure for your items as possible, use methods like Google Shopping and Promoted Listings. It is even possible to build exclusive deals and send them as newsletters to all your subscribers and potential customers.
On Etsy, you can list your products at $0.20 per product and pay additional transactions and payment processing charges on each sale you make.
5 # Jet
Jet is a relative newcomer in comparison to many of the other online marketplaces on our list. It was launched in 2015 but was quickly bought by Walmart.
Jet is the appropriate online platform for vendors that serve a niche clientele – price-conscious, young city residents. The platform has around 400,000 monthly active users and approximately 2,400 merchants.
Although this marketplace is relatively small, it offers two advantages. It has a higher repeat customer rate of 23% than Ebay and amazon. Additionally, it exposes you to a larger audience than other marketplaces with millions of other merchants.
What makes Jet unique is that it prioritises inexpensive costs above quick delivery. Additionally, consumers locate your items based on your as well as their location, and the company’s warehouse location (s).
Thus, shopping is affordable and convenient, which encourages customers to return. This helps keep prices down for your consumers and places your items in front of the individuals who are most inclined to purchase them.
Additionally, this online marketplace enables you to gather consumers’ email addresses directly through the platform. This manner, you may continue to foster new customers and encourage them to purchase other products.
Moreover, there is an integrated function that enables you to provide customers incentives to continue buying. For instance, by providing a reduced price, retailers might entice customers to renounce their right to return items.
This online marketplace levies a fee for each item sold.
Best practices for selling on online marketplaces
Online markets are definitely different than they were in the past. Moreover, not only a bit. All the terrain has changed significantly in the last several years.
A great many other marketplaces already exist, with its own rules, needs, and audiences already built in. The stakes are bigger than ever with millions of product listings fighting for the attention of hundreds of thousands of customers.
As a result, just describing various items isn’t adequate. It is important for each marketplace merchant to master a long list of key procedures if they wish to use these channels to their full potential.
When it comes to competing in an advertisement, automating pricing, and getting your orders out quickly, there are many aspects to consider.
Here is a step-by-step walkthrough of effective marketplace strategies.
Fast and cheap fulfilment is crucial for thriving on marketplaces and increasing eCommerce revenues. However, providing same-day delivery has also proven to be both expensive and time-consuming. We use automation because that’s where it works best.
Unless you still use spreadsheets and tedious manual chores to handle your fulfilment operations, you should automate your processes. The faster you deliver, the more you can save down on shipping expenses.
When it comes to success in selling, it is well known that effective salespeople will employ systems to handle their shipments, inventory, and customer orders.
Until you have a good digital marketing plan, it will be hard to stand out on marketplaces. Failure to place the proper advertising might prevent your listings from making it to the forefront of search engine results or attracting the target audience.
Success in the marketplace depends on placing your listings in front of the appropriate clients – at the ideal moment.
Do you want to do that? Work with each marketplace to take advantage of the advertising options that it offers.
For instance, Amazon sellers that utilise all of the advertising choices tend to see two to three times the growth as those who just use one or two options.
More or less, this set of companies and retailers are more likely to use:
- Amazon sponsored brands
- Amazon sponsored products
- Amazon coupons
- Amazon display ads
Engage with your customers
To interact with customers on Amazon, what should you do? How can you convince your customers to return to your website to purchase products the next time they use Google or eBay?
One of the most effective methods to have a measurable influence on revenue and sales is to implement strategies for improved customer experience and engagement on eCommerce platforms.
This means that a significant percentage of customers focus their selections on the customer service rather than on the pricing or features. Approximately a quarter of our survey respondents report that price is the most significant consideration when it comes to selecting a brand or store to do business with.
Your brand’s reputation benefits greatly from giving your customers outstanding experiences. Repeat purchases can also be a technique to track using data from previous purchases.
To protect yourself against marketplaces, your product return procedures and proactive monitoring of consumer evaluations and comments should be strengthened.
Choosing the right online marketplace to start your business
Online purchasing has expanded considerably more quickly than brick and mortar shops. U.S. Census Bureau statistics reveal that internet companies in the United States solely generated about trillion dollars last year and 9 percent in total sales.
The research also shows an increase in internet sales of 15 to 17 percent every year. The marketplace is undoubtedly robust internationally. In 2017 alone, about 1,66 billion online buyers spent around $2,3 trillion. However, by the end of 2021, sales will quadruple today’s level.
In the meanwhile, most companies are pushing aggressively towards one market platform or another. They benefit from internet developments and take them into account to safeguard their business.
Therefore, it’s important for you to connect your business with any platform online if you’re going to be successful and want to harness core competencies for your organization.
Consider making intelligent choices to secure the longevity of your company in the technologically driven market today.