In the age of digital sales, online marketplace platforms—Amazon, eBay, Walmart, etc.—have disrupted what it means to start a business. Now there are 2.14 billion people worldwide purchasing goods digitally from e-commerce sites, as these online shopping marketplaces offer convenience, competitive pricing, and a variety of products and services to choose from.
There’s no denying that online marketplaces are becoming the favorite destination for online shoppers, whether they’re browsing from Canada or Japan. An impressive 63% of online shoppers go to Amazon to start searching for products.
By 2023, eCommerce sales are expected to account for 22% of retail sales worldwide. How can you use this growth to your advantage? In this guide, we’ll provide insights into online marketplace platforms so that you can leverage these opportunities wisely.
Use the links below to navigate this post:
- Online marketplaces to sell
- The benefits of online marketplace platforms
- The challenges of listing in marketplaces
- Maintaining excellence while scaling in an online marketplace
Deciding where to set up an online store and sell your products isn’t a decision you should take lightly. For one, it takes time to manage your listings and update your online store regularly. Second, you want to be where your customers are, so not every marketplace will be right for your business. Do your research to find the best online marketplace to sell your products, so you can set yourself up for success.
The top online marketplaces for active buyers—which are probably going to be high on your priority list—include:
- Amazon (FBA)
- Google Shopping
- Walmart Marketplace
However, in addition to these major marketplaces, there are some that are specialized or lesser-known but still worth considering. Here we’ll give you a breakdown of these marketplaces based on the types of buyers who shop there and their product categories:
- Etsy: Marketplace for handmade items targeted to buyers looking for unique, artisanal goods.
- Wayfair: Furniture and home-goods marketplace for homeowners and apartment dwellers in need of furniture and home accessories delivered to their doorstep.
- Houzz: Started as an inspiration platform among architects, interior designers, and homeowners. Now lists furniture, decor, lighting, storage, and more.
- JOOR: Fashion marketplace targeted at individuals searching for luxe brands, clothes, and accessories.
- Alibaba: Provides C2C, B2C, and B2B sales services via web portals, including electronic payment services, shopping search engines, and cloud computing services. Beauty was the fastest moving product.
- Bonanza: Marketplace of more than 25,000 sellers offering home decor, fashion, and collectibles.
- Facebook Marketplace: Business owners and private sellers alike can sell new and used items to other Facebook users, across an array of categories.
The marketplaces you should target will depend on several factors, including your niche, target market, and regions you want to sell items to.
Using an online marketplace to sell your goods offers several key benefits, including:
- Visibility: Listing your products on online marketplaces is a great way to gain visibility, thanks to their high traffic volume. Online marketplace platforms provide your products access to millions of consumers. For example, by the fourth quarter of 2020, eBay reached 185 million active users worldwide. Certain marketplaces, like Etsy, can also provide you access to a large but highly targeted customer base—over 80 million people have purchased from Etsy.
- Easily facilitate sales: You no longer need to worry about hiring a marketer to establish your brand or a web developer to create a website. Marketplaces have been developed to host a huge variety of products to reach and sell to millions of buyers every day. Online shoppers visit these marketplaces for the convenience of all-in-one shopping, product and price comparisons, and a streamlined checkout and shipping experience. As a seller, marketplaces also have the infrastructure and tools to ensure that the transaction from the warehouse to the buyer’s hands is a seamless one.
- Credibility and trust: Marketplaces like Amazon, eBay, and Walmart have terms and conditions and other measures in place—from the payment system to the return policy— to ensure their customers can expect quality goods and service. You can leverage these factors to provide the best possible customer experience and help build loyalty to your brand.
Not sure how to set up an online store? These marketplaces have user-friendly systems and resources in place to make it easy for sellers to get started.
Online marketplaces present a lot of opportunities for your business, but they may also present a few challenges. Some of the most common hurdles small businesses face when selling through online marketplaces include:
- Marketplace fees: Setting up shop on someone else’s property comes at a price—one that you won’t pay if selling only through your own website. Most online marketplace platforms take a portion of your sales as a seller fee, in return for letting you sell “for free.” Other third-party sellers have a listing fee, a subscription fee, a monthly fee, a commission fee, a selling fee, a referral fee, or a final value fee. It’s crucial to review these selling fees to understand how much money you’ll keep and how much you’ll pay when you sell online at top-selling marketplaces, and to determine how those transaction fees will affect your revenue.
- Getting lost in the crowd: Usually, when buyers are shopping on a marketplace, they’re looking for the best deal and the best quality in a range of products, which means these sites strive to provide options. Since it’s easy to sell on these platforms, there may be hundreds—if not thousands—of other sellers competing with you. Expect a ton of competition when online selling, even from the marketplace itself. For example, Amazon not only allows businesses to sell on its platform, but it also has its own branded inventory promoted to the same customer base. Securing reviews and focusing on customer satisfaction are essential to help your business stand out.
- Customers aren’t yours: You read that right. When a shopper makes a purchase on Amazon, all customer information is handled by Amazon and used for their benefit. For privacy purposes, no information is passed on to you, the seller. Yes, you made the sale, but you haven’t acquired the customer; disallowing you from retargeting them for future sales. While eBay and Etsy do release information to sellers, ultimately, they control which data online sellers have access to.
Therefore, using eCommerce marketplaces to sell should be only one part of your strategy for selling and marketing online.
If there’s one factor that drives an exceptional customer experience, it’s operational excellence. True operational excellence refers to achieving a high standard as a result of continuous improvements and practical business principles.
Ultimately, poor operations = poor reviews. With ratings and reviews as the currency of e-commerce marketplaces, it will be crucial to deliver on operational excellence. So, how do you ensure that you’re maintaining excellence and delivering the best possible customer experience?
According to a recent study, out-of-stock inventory costs retailers $1 trillion in sales. When you’re out of stock on an item, customers are either going to give up on their purchase or buy from another retailer. This can have both short- and long-term consequences for your business—you could lose out on this single sale, or they might not come back at all.
Your business needs to improve its inventory management practices to minimize the risk of running out of stock and missing out on potential sales. This can be done with the right tools and technology, like QuickBooks Commerce. Within a single platform, online sellers can:
- Manage multi-channel orders, even with third-party logistic providers.
- Seamlessly track inventory and fulfillment.
- Manage inventory via automated restocking and real-time updates.
- Keep your customers updated about the status of their order.
Going digital is an exciting opportunity for your business, but it can also be daunting— and it’s a very different process than setting up a brick-and-mortar storefront.
With a platform like QuickBooks Commerce in your corner, your e-commerce business will be much better equipped to handle the transition and growth that’s likely to follow.
Streamline your e-commerce operations
In time, using an e-commerce platform to sell your products is a huge opportunity to dramatically increase sales and expand your customer base.
Regardless of which platforms you use to sell products, do your research to ensure they’re best fit for the long-term growth of your brand. Rather than treating these online sales channels as isolated sales points, make sure you have a comprehensive management and marketing strategy in place to grow your brand—with social media and content production at the top of mind. With a platform like QuickBooks Commerce, you can streamline operations, automate key processes such as inventory and order fulfilment, and set yourself up for e-commerce success. Sign-up and learn more today.
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