Are you planning to start selling your products in a third-party ecommerce marketplace?
Smart move! Third-party ecommerce marketplaces will account for about 60 percent of global ecommerce sales by 2027. These marketplaces offer ecommerce entrepreneurs a number of benefits, including access to wider audiences, powerful marketing and advertising tools, payment systems, and shipping infrastructure.
Although you might be already making a killing selling on your own ecommerce website, there’s a lot to gain by adding the marketplace model to your operations. However, there are a handful of marketplaces, and they aren’t created equal.
It’s important that you choose the right marketplace for your store. In this guide, we’re sharing a few factors to consider when choosing.
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Understand the Nature of Your Product
Opening a store on Amazon is the first thing that comes to mind for most entrepreneurs who want to start selling on a third-party marketplace – and with good reason.
Amazon commands about 40 percent of the U.S. ecommerce market, thus attracting millions of shoppers every day. There’s a strong chance setting up an Amazon store will result in greater success for most businesses.
However, this doesn’t mean Amazon is an automatic choice. You have to ensure that’s a good fit for your product.
For example, let’s say you’re selling handcrafted furniture. Would you rather set up your store on a marketplace that sells everything or one that’s focused on handmade and craft products like Etsy?
On a marketplace like Etsy, you’re more likely to make more sales because it attracts a targeted audience. Almost everyone who visits the marketplace is a prospective customer of your store.
As such, take time to understand the nature of your product before settling on a marketplace. Large ecommerce platforms like Amazon will cater to every niche, but finding one that focuses on your niche is a smarter move.
Assess Buyer Preferences
Most business decisions you make will always be in the interest of your customers. Picking an ecommerce marketplace is no different.
Research your buyers and understand how they use various ecommerce platforms. If you’re selling on your website and already have a sizeable customer base, run a survey and establish their preferences. The information you gather should inform your marketplace choices.
Assume you had already settled on setting up an Etsy store for your crafts business. But on doing buyer research, you realize that most of your customers prefer shopping on Amazon, maybe because of the fast shipping and other benefits that comes with Amazon Prime membership.
Should you go ahead with the Etsy plan anyway? You can, because the marketplace will open new revenue avenues for your business, but it also means you now need to set up a store on Amazon to cater to your existing customers. There’s nothing wrong with selling on several ecommerce marketplaces if you have the capacity.
Selling on a third-party online marketplace comes at a cost. Most platforms take a cut of every item sold, and some will charge you a fixed recurring charge to keep your store on their marketplace.
Either way, you’ll pay, and for that, it’s not to expect quality seller support. When choosing a marketplace, consider what the marketplace will do for you.
Do you get technical support when setting up a store? If yes, how accessible and reliable is the support? You don’t want your shop going online at night and there is no one to help you get it back up and running.
Try to get first-hand experience reviews from other ecommerce store owners who’re using the marketplace. You’ll have better insight into how the marketplace treats and supports store owners.
If seller support is less than satisfactory, think twice about using the marketplace anyway. You don’t want to set up a store and pull it down a few months later because of administrative and support challenges. This will hurt the shopping experience of your buyers.
Order fulfillment is an integral part of selling products online. When you open an online store on a third-party marketplace, you may have two options: let the marketplace fulfill the orders for you, or fulfill them yourself. It depends on the marketplace’s shipping policies, but most allow flexibility.
If you already have a robust shipping system, you may want to keep using it. But most small sellers prefer using the marketplace’s shipping services. If you’re taking this path, evaluate the robustness of the marketplace’s shipping infrastructure, as well as order return policies.
The shipping experience a marketplace offers affects the consumer experience. Quality shipping services mean happy customers and more sales for you.
Cybersecurity and Data Privacy
Cybersecurity incidents are becoming more common in ecommerce. If you have your own ecommerce website, you know how important it is to prioritize online security.
That shouldn’t change when you’re looking for an ecommerce marketplace. Although you have no control over the cybersecurity operations of a marketplace, you owe it to your buyers to sell on marketplaces with excellent cyberdefense systems.
Look at it this way.
There are customers who will start using a third-party marketplace simply because you’re selling your goods there. They’ll create buyer accounts on the marketplace, meaning they’ll hand over some of their personal and financial data.
If the marketplace suffers a data breach, they’ll remember that their personal data is now at risk because of you. Yes, you’re not liable for the breach, but you’d have indirectly contributed to the customer’s poor online shopping experience.
Make it a point to start online stores on marketplaces that put cybersecurity and data privacy first.
Find the Right Ecommerce Marketplace for Your Business
Ecommerce marketplaces present an ideal opportunity for e-store owners to grow their businesses. There are established marketplaces, niche marketplaces, and new ones that are coming up every day. Use these tips to find the perfect online marketplace for your store.
The world of ecommerce is constantly changing, so keep tabs on our business section to stay up to date.
Last Updated on May 17, 2023