How to sell on online marketplaces

Multichannel expansion is always in the minds of entrepreneurs and founders. However, expansion could strain your time, budget, and resources. In addition to it being potentially costly, there’s also a significant amount of competition across various sales channels. Expansion would also require leveling up marketing efforts to further build a brand and acquire a new audience.

As a business owner, you may find it challenging to start selling on multiple platforms, especially if you don’t know where to begin. In this guide, we’ll discuss online marketplaces in-depth and provide tips on how to sell on an online marketplace.

Keep reading to learn everything you need to know about expanding your business into online marketplaces and how to sell on an online marketplace successfully. You can also use the links below to navigate the post.

• What is an online marketplace?
• Expanding your e-commerce business to online marketplaces
• How to choose the online marketplace for your business
• How to succeed in online marketplaces and beyond
• Seamlessly sell on online marketplaces

What is an online marketplace?

An online marketplace is a type of e-commerce site where multiple third-party sellers provide products and services. As the name suggests, it’s not a physical marketplace, but rather one that can be found online. The transactions are handled and processed by the marketplace operator. Amazon, eBay, Etsy, Walmart Marketplace, and Google Shopping are examples of online marketplaces.

Expanding your e-commerce business to online marketplaces

As mentioned, expanding into an additional sales channel could either boost your sales or negatively impact your business regarding time, finances, and resources. There are a lot of factors to consider before taking the plunge and diving into an online marketplace. We’ll take a look at the benefits and disadvantages of selling on an online marketplace below.

Benefits of online marketplaces

Online marketplaces are an excellent opportunity to grow your business, let’s look at some of the main benefits:

• They’re hugely popular. Online marketplaces tend to drive an influx of sales toward various products across different industries. According to a Statista study, e-commerce revenue is expected to increase to $563.4 billion by 2025.
• You gain access to new audiences. You’ll find a lot of different types of people browsing online marketplaces. As of the end of Q1 of 2021, eBay alone has 187 million active users globally. Joining a marketplace can help you break out of your current niche and sell items to people who might otherwise never have known about your brand.
• Evolve from brand building to performance marketing and search engine optimization (SEO) . Most consumers don’t learn about new products until they see them stocked on shelves. Listing your products on marketplaces can provide better exposure for your brand since they improve SEO results, helping shoppers find your product. This means focusing on garnering positive reviews and gathering customer data to better serve your customer base.
• Earned trust . Since marketplace operators have their own vetting process before sellers can begin listing their products, there’s an instant level of trust established between you and consumers. If people trust the marketplace that you’re selling on, they’ll most likely trust you too.
• Getting started is fast and simple . Marketplaces take care of the hassles of selling, from infrastructure setup, design, hosting, order processing, handling financial transactions, and even fulfillment. This can help you save a lot of time and money in the long run.
• Global selling is built in . Depending on the online marketplace, you have the option to start selling internationally. Note that most marketplaces operate globally, but not all of them. If you decide to sell products in an international marketplace, you can expand your reach to other countries with minimal effort.
• List only select products . There’s no need to list your entire catalog on marketplaces. By selling on an online marketplace, you can assess what’s performing well. You have control of what products consumers see and which ones need to be removed from listings. Make sure to double down on categories that are doing well based on buyer types and pricing levels.

Drawbacks of online marketplaces

While expanding your online business into a marketplace has many benefits, there are also a few drawbacks that you should be aware of:

• Customers aren’t yours. Many marketplaces, like Amazon, restrict your ability to communicate directly with buyers. eBay and Etsy, on the other hand, do release some customer information to online sellers. However, they ultimately control which data is transferred to your end. For privacy purposes, no information is passed on to your client.
• You’re up against fierce competition. Differentiating your brand is trickier in large marketplaces. Although marketplaces can make it easy for shoppers to compare similar products in one place, they can also lead them straight to your competitors. For example, when consumers are about to checkout, they may see products listed under “People Who Viewed This Item Also Viewed…” and change their mind.
• You’ll pay additional fees. Setting up a shop on someone else’s “land” often comes at a price. Some marketplaces will take a percentage of your online sales in exchange for letting you list your products on their site “for free.” Others have multiple selling fees—from monthly subscriptions to listing fees. Common costs to look out for include transaction fees, seller fees, commission fees, monthly fees, insertion fees, referral fees, and final value fees.

Despite the drawbacks, selling on an online marketplace is likely still an endeavor worth pursuing to grow your business.

How to choose the online marketplace for your business

With so many online marketplaces to potentially list your products on, how do you choose the best platform? The ideal marketplace for you depends on the type of buyers you’re trying to attract. Below, we’ve outlined a few of the top online marketplaces to help you narrow down your options.

• Amazon:  Amazon is a one-stop shop for electronics, computers, beauty supplies, accessories, toys, auto parts, pet supplies, home decor, and even handmade items. The type of buyers that shop on Amazon are typically looking for a simple online shopping experience and speedy delivery. If you’re considering selling on Amazon, learn how you can set up an Amazon FBA account.
• eBay: eBay is an e-commerce website that allows auction-style and fixed-price listings on electronics, car parts, fashion, and collectibles. Most buyers visit eBay to purchase one-of-a-kind items, like rare comic books or trading cards and wholesale inventory.
• Etsy: Etsy is a marketplace focused on helping retailers that create handmade items make a profit. You can sell vintage products and craft supplies as well. Buyers generally visit Etsy looking for handcrafted, artisanal goods.
• Alibaba: Alibaba is a global e-commerce marketplace where you can buy an array of products, such as electronics, apparel, sports equipment, and even machinery. The type of buyers who visit Alibaba tend to want to make wholesale purchases while paying the lowest available price.

With consumers’ attention split across several channels, which one should you expand to first? As you venture into multiple sales channels, start with one, see how you like it, and add more from there. Keep on experimenting and listing your products on different online selling platforms and evaluate which ones are the best online marketplaces for your business.

When choosing an online marketplace to sell on, you should also consider the following factors:

• Popularity
• Scalability
• Fees

If you still need help deciding on a sales platform, check out our guide for seven channels to sell your products. But, if you’ve decided on an online marketplace already, take a look at how to set up your online store.

How to succeed in online marketplaces and beyond

Starting your multi-channel expansion with online marketplaces first can provide your business with additional streams of income and gain:

• Access to new audiences
• High volumes of traffic
• Well-funded and marketed infrastructures

However, to stand out in saturated markets, you need a strong brand and a fantastic product that people will share in person and online. To create a strong brand, you’ll have to put the customer at the center of your channel expansion strategy. This way, you can drive them back to your e-commerce store for repeat purchases.

Here’s how to sell on online marketplaces and create a strong brand:

1. Improve your online marketplace listings.

On Amazon, for example, take the time to place your products in the proper product categories. This way, your products will be in the ideal search areas and you’ll attract active buyers. Miscategorizing your product pages can lead to users finding your products in error, which typically won’t result in a purchase.

Then, you’ll want to create unique and compelling product descriptions so that customers will be persuaded, and search engines can find the listings easier. Use SEO best practices to help you find the best keywords for the listing. In the product description, you’ll also want to address customer pain points or frequently asked questions. Doing so will help differentiate your products and online shop in a crowded market.

When creating your product description, you’ll also need high-quality and well-photographed images to help your products stand out.

2. Encourage customers to transition from the online marketplace to your own site.

To encourage customers to shop on your own website instead of the online marketplace, include a link to your site on your social media profiles. You can also offer incentives, such as coupons, discounts, loyalty points, free gifts, or reduced shipping costs to get customers to order from your online store instead.

3. Pack like a professional.

Delight customers with fun and environmentally responsible packaging that encourages them to share their unboxing experience on social media. If you have full control over the shipping process, don’t forget to include branded content in your parcels. Put your website address on the shipping label and the invoice so that customers know where to go when shopping in the future.

Inside the package, include your business card, a postcard, branded stickers, magnets, or a handwritten note to help drive their attention to your website. Not only will your customers love the extra touch, but it’ll also let them know they can go straight to you the next time they order.

4. Add a personal note and your contact information with all returns and exchanges.

With returns and exchanges, most marketplaces allow sellers to include a personal note in email correspondence. Write the copy from a personal perspective as a business owner. Don’t forget to include your email address, website URL, and social media links.

5. Go above and beyond for customers

There’s no denying the power of providing excellent customer service. When you go above and beyond for customers, they’ll remember how you, your team, and overall brand made them feel. If they feel that you met their needs or even went above and beyond, they may come back to make a purchase in the future.

Seamlessly sell on online marketplaces

Extending your small business into an online marketplace can seem intimidating at first, but with the proper resources, you can stay ahead of your competition. Ensuring you have inventory, product listings, and orders flowing smoothly is the key to multi-channel expansion.

With robust functionality, QuickBooks Commerce can help you efficiently manage multi-channel inventory and orders in one platform. Plus, you’ll have access to valuable insights at your fingertips that empower you to estimate your future e-commerce sales quantity and place purchase orders for your stock on time to meet the demand.

Get started with QuickBooks today to connect to popular e-commerce platforms, such as Amazon, eBay, Etsy, Shopify, and Squarespace, and start your online marketplace expansion.