Online marketplaces allow you to sell goods without having to set up your own online shop. Selling in online marketplaces offers a flexible business opportunity with relatively low start-up costs. eBay and Amazon are examples of well-established marketplaces.
Advantages and disadvantages of Marketplaces vary between sectors and companies, and even between buyers and sellers.
1. High visibility.
Using the power of marketplace traffic to increase its visibility to a much wider audience. As they spend millions on brand awareness and marketing.
2. Diversify your income sources.
Add a sales channel to the distribution of your products. Then you generate additional sales.
3. Anticipate the necessary costs.
The main costs are commissions on sales and possibly a monthly subscription that will be charged to you by the marketplaces.
4. Reduce marketing and development costs.
The major interest of selling on a marketplace is the traffic it generates, so it is no longer necessary to spend huge budgets for acquisition on your website.
5. Test the potential of your business.
You can test your model for a few months on the marketplaces and see if it is viable.
6. Payment Guarantee.
Marketplaces generally guarantee payments to sellers, so you don’t have to worry about the risk of fraud and non-payment.
7. Selling on a more successful website than yours.
Marketplaces are continually improving their platforms to meet the highest e-commerce standards. Your products are therefore in an environment conducive to sales.
8. Getting to know a new audience.
The traffic that you can benefit from on the marketplaces is quite different from the traffic usually found on your website. They do not all speak to the same type of audience.
9. Having access to professional tools.
Some marketplaces make services available to their sellers to facilitate the management of their activity. These tools also allow you to improve your productivity. Such as the management of your account (stock, mass import, etc.) but also to animate your shop commercially.
10. Sell the stocks.
This is an opportunity not to be missed to sell old references that you no longer wish to offer to your traditional distribution network. Marketplaces are often interested in clearance sales, in which case you should contact the sales team.
11. Achieve economies of scale.
By going through this new distribution channel, you increase your value to your suppliers. And you can therefore expect better commercial conditions.
12. Outsource your logistics to the marketplace.
It is possible to send some or all of your products to the marketplace (mainly Amazon). Which then handles the packaging and shipping of the products at very competitive rates and timescales.
13. Sell internationally.
Selling abroad is never easy, especially when you do it with your own e-commerce website. By using marketplaces you can make it much simpler.
1. A world that is not very well suited to your products.
Marketplaces offer all types of products. Your products are therefore mixed with products that are completely different from yours. Even if they offer a great user experience, they will never be able to recreate a perfect/ideal environment for your products.
2. The mix of new and second-hand products.
Second-hand products, therefore, compete with yours. Your products with their professional photos are mixed with other products with amateur photos. Private individuals sell in mass as professionals. But without paying the costs of professional activity.
3. Competition with the marketplace itself.
The risk for you, as a marketplace seller, is that a new competitor will come along, namely the marketplace itself. Who will charge the lowest price and whose reputation will be more reassuring to the customer?
We will discuss this point in more detail in a forthcoming article. So keep up to date with what is published in this category.
4. You do not own the customers.
Customers buy your products via the marketplace. So you are not allowed to contact them at a later date. Nor can you encourage them to come and buy directly from your own website.
5. Out of stock.
This is the most common problem encountered in marketplaces. Out of stock will disadvantage the seller and reduce his visibility on the marketplace.
6. Lack of identity.
All sellers are treated equally. So the consumer no longer has your graphic charter, the name of your brand, your products, etc. in the head. Being on a marketplace means agreeing to give it its identity.
The most successful online workers do not focus exclusively on marketplaces. Rather, they work hard to build their brands, one project and one product at a time. This group attracts far greater rewards than most marketplace-only sellers. Moreover, they enjoy greater control, anonymity, freedom, and expression.
In the end, it need not be a decision for either of them to make. You can take advantage of marketplaces while developing your online platform for a comprehensive approach. Second, don’t let the marketplaces get the better of you, but rather the opposite so that you can achieve your revenue, profit, and financial goals. Making sales is a wonderful feeling, but you need to stand firm to generate sufficient income independently.
We are digital specialists and are familiar with the many advantages and disadvantages of marketplaces. We can help you. So don’t hesitate to contact us or leave us a comment.