The digital revolution has gifted consumers with levels of speed and convenience that would shock even the most future-forward of 20th century thinkers. Next day deliveries, 24/7 customer service and one-click purchasing are all products of the lightspeed acceleration of eCommerce we’ve witnessed over the past decade. And they are quickly going from nice-to-haves to must-haves.
But how can retailers gain easy access to features like these and meet modern consumer expectations without building from the ground up? Online marketplaces.
They’ve been the buzz of the retail industry for the past several years, and even more so since COVID-19 forced consumers indoors and gave birth to the fiercest competition we’ve ever seen in the eCommerce universe.
Before 2020, marketplaces accounted for half of global online sales – USD $2 trillion on the top 100 sites. When the pandemic arrived, marketplaces rose in popularity and accounted for 62% of all web sales. These powerful platforms are expected to grow even further as they take up more and more of the eCommerce market share.
For businesses – new, established, small and large – online marketplaces offer large customer bases and fast launch times among a multitude of other benefits. In fact, online sellers have been known to increase retail sales by as much as 1,250% simply by listing their products on digital marketplaces. But despite their popularity and appeal, many brands and retailers are still unsure about whether and how to get involved with online marketplaces.
What is an online marketplace?
Simply, an online marketplace is an eCommerce site that offers many different products from many different sellers. These sellers are known as ‘third-party sellers’. Amongst the most well-known marketplaces are Amazon, eBay, Walmart, Etsy, Alibaba and Google Express. Even Airbnb is a kind of online marketplace for holiday homes.
It’s important to know that different online marketplaces have different processes, features and even criteria for allowing you to list your products on them. So, when you’re thinking about joining one, it’s a good idea to do your research and understand each of their offerings.
Why are online marketplaces #trending?
Perhaps the best thing about online marketplaces for third-party sellers is that most marketplaces will go to great lengths to make it as easy as possible for brands and retailers to market, sell and fulfil. That means a lot of the work that you would normally have to do yourself is done for you.
Beyond that, here are four big benefits of joining an online marketplace:
- Fast launch times: All it takes to become a third-party seller is to get approved. Then, all you have to do is upload your product feed and start selling. This means you can quickly generate revenue.
- Established programmes: The biggest online marketplaces have software in place that will help you market, sell and fulfil. For example, Amazon, eBay and Google offer Amazon Advertising, eBay Promotions Manager and Google Shopping Actions. Each of these programmes comes with a host of tools that will help you market and sell your products to the right people at the right times.
- Large customer bases: Between Amazon, eBay and Walmart alone, there are close to 500 million active monthly visitors. And many of those consumers don’t bother with Google or retail sites when searching for a product – instead, they’ll go directly to marketplaces. In fact, more than 6 in 10 (63%) of all product searches now begin and often end on Amazon, so your products have a far greater chance of being seen and, potentially, bought when they’re listed there.
- Expanded reach: Given the mammoth size of marketplaces and their increasingly global reach, listing your products on one of them vastly expands your reach. If you were previously selling only to customers in the UK, for example, joining a marketplace means you suddenly have access to customers around the world. More chances to sell means more revenue for you.
Who should list on online marketplaces?
There are strategic ways for any brands to participate in a marketplace ecosystem. It’s a partnership, so if brands are clever, it should be a win-win situation between brand, marketplace, and consumer.
When deciding whether to become a third-party seller on an online marketplace, it’s important to make sure your brand is aligned not only with the brand of your chosen marketplace but also with the other brands and products that you’ll be sitting alongside and competing with.
How to take advantage of online marketplaces
Being listed on a marketplace is a classic exchange of value. We’ve covered what marketplaces offer to brands – fast launch times, established programmes and large customer bases. Now is the time to consider what you bring to the table – and how.
How will your products and brand be differentiated in the existing marketplace’s ecosystem? In what ways will the marketplace reinforce your strategy and customer engagement? And exactly how will you tailor your operations to suit the marketplace supply chain?
- Optimise product content: Titles, descriptions and categories are more important than you might think. The more effort and uniqueness you put into these, the more likely you are to beat the competition. So, identify the right keywords and categories and create compelling product descriptions.
- Prepare to advertise: In order to rise in the ranks on marketplaces, where competition is fierce and getting fiercer, it’s essential to invest (if only the minimal amount) in digital marketing.
- Be ready to expand: You might start with a single online marketplace, but you’ll need to be ready to eventually expand into a few different ones to maximise your products’ visibility.
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