Marketplaces play a central role in an e-commerce strategy. Why should you think about deploying your own marketplace?
Integrating an existing marketplace is the simplest solution, and certainly the most reassuring. But taking the next step and integrating your own marketplace into your e-commerce strategy is possible.
The marketplace is one of the levers of digital transformation. Integrating a marketplace is a good way to modernize the company and it requires adapting its offer to its customers:
– offer greater reactivity,
– diversify product ranges,
– free yourself from stock problems,
– offer product comparison
New business plan
A new business plan is emerging with new economic models. Deploying your own marketplace allows you to diversify your revenue streams.
There are different models:
- The performance model consists of commissions on each sale made, which are charged to either the buyer or the seller. Commissions can be charged at the time of the transaction or at the time of the introduction, regardless of whether or not the transaction is completed. The advantage of this model is that there is no cost to register, but the right commission rate is essential: usually between 5 and 15% depending on the product category.
- The fixed fee system via subscriptions offered to sellers but also to buyers. Either it is the seller who takes out a subscription to offer his products on the marketplace, or it is the buyer to benefit from services (personal services, dating sites). These are often tiered subscriptions that depend on business volumes or the number of references, which makes it possible to compare and certify sellers. This model is implemented by marketplaces that are already well known on the web.
Additional services are offered to provide even more services to consumers. For buyers, this can be delivery, storage, after-sales services, or advice that easily increase the average basket. For sellers, it is a question of highlighting products in e-mailings, banners, recommendations on the first page, etc.
A free listing attracts many sellers and increases awareness. Some marketplaces then offer a remuneration system based on the purchase of features. Vinted offers its sellers the paid and automated Boost feature which gives more visibility to items.
Advertising is also an important source of revenue on marketplaces. The greater the increase in traffic, the more advertisers are willing to pay, and the greater the advertising revenue.
Deploying your marketplace: an open door to the international market
Deploying a marketplace also means opening up to international markets quickly and easily. The advantages are numerous:
- Selling without the constraints of export regulations, VAT, means of payment or delivery
- Test your products and feel the appetite of customers abroad
- Increase your visibility on the net and benefit from a large traffic on the targeted country
- Be less dependent on Google and its referencing algorithms
- Benefit from services and assistance programs for local customers: translation of product descriptions and data sheets according to the country of purchase
In just a few years, marketplaces have become THE lever for boosting sales. Take the plunge and choose your marketplace model!
Opening a marketplace does have a few drawbacks.
The first is the commercial headache. When you are both a marketplace and have a physical distribution network, the question of commercial priority arises. Should you give priority to the e-retailer or the shop?
The second is the process. The business models of an e-commerce site and a marketplace are different. You need to have reliable sellers, qualify them, manage them, and motivate them while generating traffic at a low cost. This becomes essential for a marketplace.
Thirdly, you have to have the necessary resources and skills to create it.
All you have to do is think about the business model. Don’t assume that overnight you will become the new Amazon. It takes time, a lot of time, and the right people to get to the level that Amazon has reached today. But if you start humbly and offer a different type of marketplace, for example selling ethical products, you will be able to become the new Amazon. You can stand out from the competition and make a difference. We explain why we have given the example of ethical e-commerce in this article.