Over the past year, we’ve seen more and more businesses take their services online. For many, providing a new ecommerce offering meant their survival was supported during an unpredictable time while for others, an online focus has been slowly developed over a period of time as part of the undeniable digital revolution.
Contributing to the digital shift is online retail’s ability to offer businesses with more opportunities, particularly with the way they advertise their products to their customers. For example, a business can have its own ecommerce channel and can use an omnichannel approach to sell its products via marketplaces.
It’s these very marketplace platforms that are dominating the digital sphere at present. In fact, in 2019, $1.97 trillion was spent on the top 100 marketplaces, globally. The likes of Amazon, eBay and Alibaba are included in this list.
The benefits of marketplaces
With these platforms comes a wide range of benefits for businesses, and perhaps one of their biggest offerings is their ability to provide easy access to a substantial pool of customers who are increasingly turning to marketplaces for a convenient, online shopping experience.
In addition to this, due to these platforms often being owned by larger corporations, there is little technical burden placed on the merchant when it comes to things like software upgrades and system integration.
The rapidly expanding customer base, combined with the ease of use, demonstrate clear advantages of these platforms for ecommerce businesses. However, with more and more businesses turning to this sales channel, we’re starting to see some recurring mistakes being made, especially by companies who are completely new to digital commerce practices.
Businesses utilising these sales channels for the first time may find themselves struggling to make them work to their advantage.
Here are some of the top things you can do to make the process of utilising marketplaces more straightforward.
Choose the right platforms
Nowadays, there are countless online marketplaces for businesses to choose from, all of which have their own unique set of benefits. The sheer volume of choice often overwhelms businesses in the initial stages.
It’s likely you’re already aware of some of the bigger marketplaces including Amazon, eBay, and Alibaba, however, there are also many smaller platforms that can work just as effectively to attract customers and generate revenue.
Generally, businesses will flock to these larger companies when setting up their own online marketplace. This is understandable – these platforms attract a large number of users per day, which puts businesses in front of even more customers. Also, due to the globally renowned name, they are perceived to be more trustworthy and reliable, which reflects positively on your brand.
However, as more businesses sell on these platforms, the competition will continue to rise. To keep ahead of the competition, companies must adopt a strategic and informed approach when deciding on the right marketplace platform. This decision should be heavily based on which is frequented by, or accessible to, their target audience.
For instance, if your target audience is based on geographic location, you should consider using a platform that attracts the largest audience in your specific target areas. Alibaba, for example, is particularly popular across Asia, and Amazon and Wal-Mart in the US. In Europe, Zalando is the go-to marketplace for fashion purchases.
Social media shopping
With the continued advancements in technology combined with changes in consumer habits, social media marketplaces are rising in popularity.
Notably, Facebook’s investment in developing its marketplace feature, and Instagram’s Shopping page, are changing the way in which businesses and consumers are interacting, enabling more convenient purchases.
It’s important to remember that the age of your target audience can help you to determine which marketplace platform is right for you. Social media marketplaces experience more usage and uptake among the 18-24 age group, especially females.
While retailers do not necessarily have to manage the more technical aspects of a third-party marketplace, one of the real selling points for companies with strained resources or smaller teams, they do need to consider other forms of management that may be involved. This includes stock list updating and managing any other channels they might be using.
Businesses often underestimate the amount of work that is involved with utilising these platforms, however, when they consider the reasons why they’re using this marketplace, which is often to reach more customers, the workload makes sense and should be expected.
If you’re considering using a marketplace, creating your own marketplace or you’re just having difficulty managing your existing activity, don’t worry. Fortunately, there are several marketplace management software solutions that can help you.
For example, some of the biggest brands in the world use VTEX. This software is a single ecommerce platform that includes marketplace management to help businesses achieve greater efficiency. VTEX combines activity across every sales and logistics channel for a streamlined experience for both customers and internal processes.
As well as assisting with workload efficiency, it also allows a lower cost of ownership, providing a monetary benefit. Furthermore, since it is a cloud-based technology, it requires very little specialist technical knowledge.
ChannelAdvisor is often used to aggregate data feeds and order management across all marketplace sales channels and is recommended for brands who want to access global marketplaces.
By taking advantage of such platforms, the management aspect can become more streamlined, easily handling the aspect of having multiple order and revenue streams. This allows businesses to focus more on commercially-critical areas or give them the time they need to scale up their offerings in order to target the optimal number of customers in each market via suitable channels.
Don’t miss out on valuable data
Marketplace management platforms can go above and beyond for businesses who want to utilise marketplaces by providing valuable data capture and analysis opportunities with no real additional cost to the company.
It’s this kind of information that proves critical to business success, as companies can get rich insights into the effectiveness of their activity, as well as clarification on whether their decisions on channels, such as marketplaces, have been successful. If unsuccessful, this data can highlight areas of improvement.
Ultimately, success with marketplaces is not as far-fetched as it seems and it’s easy to achieve once you have the right knowledge and tools. With clear benefits associated with marketplaces and the indication that they will be here to stay, we recommend that businesses invest in these tools to yield fruitful results online.
For more information on online marketplaces, get in touch with the team at Diginius today.