Sales Through Marketplaces: Where to Start?


The marketplace is often the shortest route from producer to consumer bypassing intermediaries, and the profit from sales on it. - by Kunal Chowdhury on

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Today, marketplaces account for more than 50% of all online purchases in the world, and by 2022 (according to Forrester Research) this figure will reach 70%. The essence of the work of different platforms is reduced to a common denominator - to display goods on a virtual showcase of the online service and use its services can be any seller, subject to certain conditions. But how to increase sales using several marketplaces? Easy. Start migration from Magento to Shopify.

 

Sales Through Marketplaces: Where to Start?

 

Of course, this fun will not be free, but the marketplace is still the fastest, most convenient, and cheapest way to start making online sales for offline retail.

 

For a business owner who does not have to set up online payments, arrange delivery, and advertising, popular services with their resources can be both the main sales channel and a great additional marketing channel that can increase the turnover of the online store several times.

 

How to choose an online marketplace for work, how to start selling through it, and what are the benefits and pitfalls of this marketing channel - we will consider these relevant business issues in our article.

 

 

How It Works and What the Marketplace Earns?

Electronic trading platforms, which house third-party vendors, are gaining popularity in e-commerce. Such platforms are beneficial to all - not only sellers but also buyers who can buy in one place on transparent terms any goods from different brands.

 

Sales commissions are the most obvious source of income for many marketplaces. There are several options for implementing this monetization scheme in practice:

  • paid by the seller
  • the buyer pays
  • hybrid payment

 

 

For marketplaces with a small average check, this monetization model is ideal. But the commission, which is usually from 5% to 50%, is not always the only or even basic income.

 

On large services, the number of services is impressive, and the most interesting among them are the following:

  • delivery of goods to the buyer (ordinary or fulfillment) – with numerous agreements, it is more profitable to delegate work on warehouses and logistics to the marketplace;
  • acceptance of payment – when placing an order, the buyer transfers the money to the general current account of the online service;
  • analytics tools – any popular service will provide you with access to data (reports on sales, customers, attendance, etc.) that will help navigate the market, forecast demand, and expand the range;
  • marketing and promotion – marketplaces can afford to use a variety of methods to attract traffic, which is then converted into sales to customers of the platform;
  • work with returns – if the contract states that the service itself deals with this issue, you do not have to pick up and take back to the warehouse goods that did not suit customers.

 

Competing with each other, marketplaces complement the service with new services and relevant opportunities for suppliers.

 

 

Marketplaces as a Sales Channel

The marketplace is often the shortest route from producer to consumer bypassing intermediaries, and the profit from sales on it, even with the commission, may exceed the profit from traditional sales channels at similar volumes.

 

Each marketplace can have its special advantages and pitfalls. After the contract should be careful and scrupulously study the terms of cooperation.

 




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