Ecommerce companies should always look for ways to expand their business and attract new customers online.
So where can you find these new potential customers?
According to Custora Ecommerce Pulse, Organic search, Cost Per Click (mainly SEM) and Email are still the top online marketing channels driving the most customers online (51% of all channels). But, there are other channels where you can expose more of your products to more potential customers.
One great opportunity for growth is selling on online marketplaces. Amazon is the go-to destination for consumers that search a product online. 55% of consumers do their search on Amazon, compared to 28% who opt for a search engine. (Source: BloomReach poll, September 2016).
The opportunity for you as a seller is huge: instead of waiting for consumers to land on your site thanks to your advertising spend, you can simply and easily list your product catalog on a marketplace and reach millions of users in one place.
In this article, we will explain how to take advantage of this specific channel to grow your business online.
1) Selling on Online Marketplaces
Online marketplaces or online shopping malls are platforms that enable third-party sellers to sell new and used products and services on one website. The channel reach is growing extremely fast over the last few years and represents a real opportunity to grow your business online.
Sales by sellers on the two biggest marketplaces, Amazon.com and Ebay.com, accounted for about 27% of North American online retail sales in 2015, based on an Internet Retailer analysis.
Selling on these online malls represent an easy way for smaller merchants to compete in a competitive retail landscape, however, large retailers can also take advantage of marketplaces.
2) Choosing wisely
There are plenty of marketplaces where you can list your product on, but which one to choose?
Dominant: put all your time, effort and energy on the two leaders, Amazon and Ebay. These platforms have the traffic and categories of products, but can be more competitive as more sellers try to sell their products on them. The pro here is that you expose your products to millions of users in few clicks.
Niche market: given the popularity of Amazon and Ebay, multiple niche marketplaces have emerged. Some of them, like Etsy or Newegg, are specialized, others like Walmart are general. Take a look at each marketplace in your specific domain and choose the one that makes more sense based on your strategy and goals.
Top Online Marketplaces to Consider
*: number of monthly unique visitors in the main market. Sources: Statista, Alexa, Compete.com, Quantcast, Médiamétrie, Netratings.
3) Easy to Set-Up
Marketplaces have low entry barriers for sellers. You don’t have to create or develop your own selling platform, take care of the look and feel and customer experience, but instead you use the marketplace’s already established platform. This can be a large burden lifted off sellers who do not have the time, resources or money to invest in marketing.
The only costs you incur are a listing fee and a small percentage of each sale that goes to the marketplace.
The percentage Amazon takes from each retailer on sales of their products typically ranges between 6% and 15%, although in a few categories it can rise to as much as 25%.
Ready to Sell in a few Minutes
Simply upload your product catalog to be up and running.
If you use one of the top Ecommerce platform such as Shopify or Magento for instance, you can directly upload a product feed in different format (. csv, .txt, etc.) from your back-end.
4) Testing out New Markets
Not only do marketplaces expand your brand and product exposure, they also give sellers the opportunity to test out new markets in a cost-effective way.
If you are a Canadian site, why not sell in the US or in Europe? Marketplaces are all around the world and make life easier when it comes to sell in another country.
Instead of creating a brand new site, select a few products and test the new market out. If you increase your sales, you can expand the number of products you sell on this particular marketplace. If you don’t, little time and money are wasted.
5) Multichannel Product Management
It is relatively easy to get up and running on multiple marketplaces, however selling across multiple online channels can be more difficult. Managing your entire product catalog for these different channels can quickly become tricky.
Each marketplace has rules or requirements for how you can list your items. How you list your item on Amazon won’t be the same as on eBay. There are going to be different categories and required product details. Some fields like UPC, MPN, Brand are mandatory on a specific marketplace, but optional on others.
If you’re selling on multiple marketplaces, it can be tough to keep up with each marketplace’s requirements. It’s hard to manage and publish the same products, tailored to each marketplace.
A poor product listing will hurt your product’s chance of being seen and purchased. Ultimately, your sales are going to suffer and this channel won’t be as efficient as it can be.
Merchants need to consider investing in a data feed or product catalog management system that gives them a centralized location to manage all their product data. From this one location, merchants should have the ability to edit, build, and publish their product listings, according to what marketplace needs.
There are many vendors that offer such services; it is worth considering allocating some marketing dollars to these services. They can save you a lot of time and you are guaranteed that your product listings will be plug and play with every single marketing channels you are working with (marketplaces, shopping engines, retargeting…).
6) Inventory Management
Along with product catalog management, sellers should have a plan for managing their inventory across multiple marketplaces.
Many sellers end up listing the same products on multiple sites. They could have a product listed in-stock on two different sites when they really only have one product left in inventory. A customer from each site can purchase the last product they have. You can imagine the problem explaining to a customer that you can’t actually ship this specific item because of an issue in your inventory management system. No one wants a bad user experience.
Not only will you have to deal with the customer, but you’ll also have to deal with the marketplace that can suspend sellers who consistently oversell.
Manual inventory should be avoided. Real-time inventory updates are the only way to ensure your inventory levels are always correct. Real-time updates ensure that when a purchase happens, the rest of the stock levels are updated across all sales channels.
Some vendors that deal with product catalog management can help with the inventory management as well.
Now that you have a better understanding of how powerful an online marketplace can be to increase your online sales, select one or two marketplaces, and launch a test.
Make sure your product catalog and inventory are well managed to avoid any future problems with both customer and marketplace.
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