What is Marketplace Selling?

In the simplest terms, marketplace or platform selling is the act of listing your products for sale on eCommerce operators’ storefronts - usually ecommerce websites and apps.

Who’s It For and What are the Benefits?

Marketplaces and platforms, which include retail behemoths from Amazon and eBay, to Zalando, or very.co.uk, and hundreds more, represent a significant portion of global eCommerce sales. As such, for new or established brands, marketplace selling is a fundamental part of modern business.

Happily, the on-demand, scalable nature of marketplace selling, combined with its relatively low cost of entry, makes it a low-risk proposition for most sellers. The key benefits are undoubtedly reach and scalability.

Reach

Probably the most compelling argument for brands to engage with marketplaces and platforms is access to their audiences. Larger platforms have millions of shoppers, and smaller ones often do an excellent job of appealing to valuable, niche audiences, producing engaged and loyal customers.

Scalability

For large brands with developed ecommerce operations, marketplaces offer an almost instant-on source of new customers, raising brand awareness, ensuring visibility alongside competitors, and selling stock through. For fledgling sellers, carefully throttling listings to match inventory, in order to prevent out-of-stock situations (often referred to as “overselling”), or to maintain scarcity, can be an excellent brand-building exercise. 

For those less concerned about product availability, but worried about their ability to fulfill due to logistics, warehousing, and/or last-mile delivery challenges - many marketplaces will pick up the slack, offering on-demand services as required. Availing yourself of such services comes at a cost, but can provide an elastic way to test new markets, and facilitate international trade.

Lastly, for growing brands, which must focus their limited resources on product development and marketing (rather than ecommerce ops), marketplaces can provide a quick route to sales growth, with limited overheads.

Where to Start

Marketplace selling should be a component of a well-rounded sales strategy. This would likely include your own direct-to-consumer ecommerce channels and any “normal” retailer relationships.

Often, commerce leaders will pick the biggest marketplace they can think of, and develop a strategy around it. Conversely, we recommend that you start with your own objectives, not with a marketplace. Are you focused on generating new domestic customers? Building brand awareness? Reaching international markets? Improving profitability?

Careful research to understand marketplaces’ audiences, pricing structures, and the idiosyncrasies of each Is critical.

Whilst marketplace selling can help with all of these, careful evaluation of the available channels, and piloting the right ones before building out your offering can help you avoid many of the common pitfalls. Careful research to understand marketplaces’ audiences, pricing structures, and the idiosyncrasies of each Is critical.

Key Platforms

Approaching marketplace selling as a multi-channel discipline is key - why feature your products on only one or two storefronts, when there are literally hundreds to choose from.

As you’ll learn during your research, marketplaces have differing audience profiles, and each have their own strengths, weaknesses, rules, and requirements. This can make some more profitable than others for certain brands, so it’s very important to think beyond Amazon and eBay.

Additionally, if you implement technology carefully, and design robust processes, the work of adding more platforms is greatly reduced.

Integration & Automation

To avoid an untenable administration situation, it’s important to consider how you’ll integrate your technology stack with the marketplaces and platforms that you choose, and how you’ll control your product listings and inventory. 

As you add more marketplace retailers, this challenge can increase exponentially, so we advocate working with specialist partners such as Tradebyte to facilitate your one-to-many integrations. As we’ve already touched upon, different marketplaces have different requirements, so an experienced partner can eliminate the need for specialist integrations, cut complexity and dramatically increase speed-to-market.

Product Content and Data

As with all ecommerce channels, high quality product content is vital. Without it, your listings are at a real disadvantage. Investment here can drastically improve marketplace performance, and should be considered one of the key requirements when embarking on a marketplace project. 

Pricing and Profitability

As you’ll discover during your research, the costs of marketplace and platform selling can vary, meaning retailers will need to balance volume and profitability, particularly where stock is limited. From a merchandising perspective, marketplaces usually offer a high level of control, so an agile approach to inventory deployment, and even pricing can help maximise returns. 

That’s Not All

All this was just the start! Many of the topics we’ve touched on here are worthy of their own articles, but we hope we’ve given you a Rapid Guide to Marketplace Selling as promised - To find out how you can take your eCommerce to the next level, get in touch with Tradebyte, we’d love to discuss your needs and share our expertise.