By 2024, e-commerce transactions will be worth more than $6,388 billion, compared to $4,280 billion in 2020, according to Statista. The main reason for this e-commerce explosion is marketplaces. So you don’t need to be an expert to know that selling on marketplaces will be essential in 2022.
From a distance, it almost looks simple. More visibility, more market share, being positioned at the same level as your competitors, multiplying your points of sale… In reality, it’s a bit more complicated.
We know that when we want to start up, we hope for a return on investment that matches the efforts made, yet we don’t always know where to start.
Is my business suitable for selling on marketplaces? How are my competitors positioned? What products should I put online? How do I manage the integration of my catalog? Do I have the necessary human and logistical resources?
To answer all these questions, we have compiled some practical advice to help you organize your strategy in a solid and profitable way.
Step 1: Define your online sales model
A crucial and structuring step, it is important to determine from the outset the model that defines your online sales activity:
- Am I a supplier, a retailer, a pure player, a brand, a click and mortar, DNVB*? You sell, ship your products and manage your stocks.
- Am I a drop shipper? You do dropshipping. You sell and your supplier takes care of delivery and stock management.
*Physical retailers who have implemented digital actions to be omnichannel and unify their channels
**Digital Native Vertical Brand
Step 2: Define your online sales strategy
It is also important to think about the type of marketplaces on which you want to sell your products:
- Specialized and/or generalist? Don’t put all your eggs in one basket! Where a generalist marketplace generates more sales volume, a specialized marketplace, for example in DIY, brings less traffic but is more qualified and can therefore generate more conversions.
- National or international? Start with marketplaces located in the country of your stocking location, in order to minimize delivery times, an indicator that is very closely monitored by marketplaces. Also, consider the exchange rate risk if you venture outside the eurozone and the customs and VAT issues for international sales.
Step 3: Choose your first marketplace(s)
There are several criteria to consider when choosing the marketplace(s) best suited to your business:
- Notoriety/size of the marketplace? Traffic? Targets? What is the target audience: Is it a large or small marketplace? It is important to study the traffic generated by the marketplaces. – The number of unique visitors per month can be a good indicator. Also, consider whether your target customers are present in this type of marketplace.
- Are my competitors present in the marketplace? Your success/visibility may be affected if your products are over-represented in the targeted marketplace. However, the presence of your competitors may also mean that this is the right marketplace for you. Be conservative with the must-haves and explore the lesser-known ones too!
- What commission for my product category? Some marketplaces can charge up to 20% commission. Keep your margins in mind or consider raising your prices for that marketplace.
- What is the fixed monthly fee? Often minimized, this can end up being a big part of your budget, especially if the marketplace is not performing well enough.
- Are my products accepted by the marketplace? Make sure you meet the criteria required by the marketplace. You can find this information on the marketplace’s institutional website or on their commercial brochure.
- How easy is it to integrate my catalog? From a technical point of view, you need to see how the integration of products and the retrieval of orders on the marketplace is done.
Step 4: Define your product strategy
This step consists of determining with what objectives you are going to the chosen marketplace(s).
Is it to :
- Destocking end-of-life products?
- Offer only my promotions?
- Only offer my top sales?
- Offer a range of products exclusively for marketplaces?
- Only offer products for which I have exclusive distribution?
Step 5: Define your pricing strategy
As you might expect, the selling price is a central component of e-commerce. The majority of consumers base their purchasing decision on the selling price and the number of shipping costs. It is therefore essential to think carefully about your pricing policy and to ask yourself the following questions:
- Should I charge a different price on the marketplace than on my physical store/website? This may be relevant to avoid cannibalizing sales from your website or retail activity if this is the case.
- Include in my selling price the commission charged by the marketplace? This can be useful to maintain your margin.
- Include delivery costs in my selling price? This strategy allows you to offer free shipping.
- What is the competitive landscape for my products? The more competition you have, the more you will face a certain price war. Price is the most important variable in winning the sale. The winner is the one who manages to offer the most attractive prices.
Don’t worry, once your products are online, you can always change your prices to study price elasticity.
Step 6: Define your branding strategy
With the exception of a few marketplaces such as eBay, Rakuten, or Amazon, which allow the creation of product sheets including HTML and/or dedicated shops, the vast majority of marketplaces limit your presence to a simple seller name.
The question then arises: do you want to be easily recognizable on the marketplaces? If so, choose the name of your brand/website/company as your seller name. If not, choose a fictitious name that will allow you to sell anonymously.
Step 7: Have a logistics service adapted to the requirements of e-commerce
Today, for 62% of customers, delivery is the most important criterion when buying on the Internet. You will therefore need to optimize your logistics. So you are wondering how to do this?
For optimal logistics, several aspects must be listed and their procedures clearly defined (order management, returns management, delivery management, etc.):
- What are my order preparation and delivery times? These times must be very short in e-commerce. It is advisable to prepare an order within 24 hours and deliver it within 72 hours.
- Is my current logistics partner suitable for e-commerce? Not all logistics partners are suitable for e-commerce. For all your marketplace orders, get in touch with a reliable delivery partner specializing in e-commerce.
If you do not have a suitable logistics department in-house, you can either outsource your logistics completely or use the fulfillment service** of the marketplaces. The latter will take care of dispatching your orders. You can also opt for the dropshipping solution (as seen in step 1).
- Is the packaging of my products suitable for delivery? The importance of your packaging should not be underestimated. It must be shock-resistant so that your products do not break and cause a dispute with your customer.
But even more…
- How are my customers delivered? It is strongly recommended to offer several delivery methods. Among the most popular delivery methods are home delivery and delivery to a relay point, but you should also consider express delivery within 24 hours.
- How are my stocks managed? Poor stock management can cause you to miss out on sales and be removed from the marketplace if you don’t honor your order dispatch commitments.
For example, if you work with a flow integrator, stock management will be automated. The latter will send your stocks to the marketplace several times a day and products that are out of stock will be automatically taken offline.
- How are possible returns managed? Your return policy will be highly regarded by consumers before they make a purchase. It is preferable to offer a flexible return policy (e.g. free returns). You will need to think about managing the validation of returns in stock.
Step 8: Have a well-functioning internal organization
Marketplaces require responsiveness, rigor, and organization. Are you well equipped for this?
- Do I have the necessary human resources? It is advisable to have at least one person in-house who is responsible for the day-to-day running of the e-commerce business: collecting orders, checking product sheets, product publication rates, order acceptance rates, and customer satisfaction. His metrics are very closely monitored by the marketplaces and must always be “GREEN” if you do not want your account to be suspended.
- Do I have an operational and efficient customer/after-sales service? This is essential to maintain good customer satisfaction and to make it easier for your customers to stay loyal. Its role will be to respond as quickly as possible to the requests of marketplace customers. Your retraction and complaint policy must be perfectly defined: manage and resolve all disputes quickly or risk being excluded from the platform.
- Have I trained the accounting department? Plan to train your accounting department, which will have to account for your new marketplace orders and prepare invoices.
Step 9: Establish a roadmap
You are almost there! Now that you are well prepared upstream, it is wise to establish a roadmap so as not to rush.
Indeed, caution is required when it comes to the rate at which new marketplaces are added, given their high standards.
As we mentioned above, the slightest mistake can lead to your account being closed.
- Integrate your first marketplace in 5-6 weeks: this takes into account the response time of the marketplaces, the creation of the products, and the time to get real feedback.
- Integrating your 2nd marketplace in 3-4 weeks.
- Integrate the following ones in 10 days.
Step 10: Registration in the marketplace
Register and set up your seller account on the marketplace back office.
- Registration: simply search for “become a seller on…” (the chosen marketplace) on a search engine. (the chosen marketplace), you will then be redirected to the registration form.
- Required documents: You will be asked to provide several documents: an updated Kbis of the company, the manager’s identity card, a bank account number, etc. Depending on the product category and the requirements of the marketplace, you may be asked for CEEE or Eco-Mobilier certifications or even if the company’s head office is in France or Europe.
Step 11: Create a product catalog adapted to the marketplace
A well-structured product catalog is a key to rapid integration and success in the marketplaces. If your catalog follows these tips, you will be equipped to visit a large number of marketplaces.
Please note that the catalog provided can be in CSV or XML format and must be translated into the language of the country where you sell.
For each product you must have at least :
- EAN: or barcode. This is the key to the acceptance of your products. It is via this 13-digit number that your products will be recognized by the marketplace and possibly linked to other similar products.
If you do not yet have an EAN for your products, you can contact companies that are authorized to sell them to you.
- SKU: or product number. Each product must have a unique reference.
- Product title: it should be well structured, and concise, with the keywords that your prospects will be looking for. Your product titles can be different from those on your website if you want to avoid duplicate content.
- Product description: ditto. Your product description should be well structured, and concise, with the keywords your prospects will be looking for. Your product descriptions can be different from those on your website if you want to avoid Duplicate Content.
- Product visuals: Needless to say, your images are essential to the sale. They must be in HD (generally the square format 1000x1000px fits all marketplaces): the 1st image on a white background, without text, without watermark, without brand logo.
- Condition of the product: specify if it is a new/used/conditioned product…
Product category: the product category must be filled in very precisely. If your categorization is not precise enough, this can lead to “errors” when you integrate or publish your products in the wrong categories.
But also the following information:
- Size / Colour: to be indicated for each product only if you sell products with variations.
- Quantity: your stocks must be up to date in order to avoid orders for products that are out of stock.
- Price: this is the price including VAT/unit
- Delivery methods: it is possible to add several delivery methods depending on the options offered by the marketplace (tracking, registered, express, relay point, etc.)
- Delivery costs: Depending on your pricing strategy defined in step 5, you can choose whether or not to offer delivery costs. You can also offer several prices depending on the delivery methods chosen.
- Delivery time: This is the preparation and dispatch time in working days for an order.
As seen in step 7, consumers attach great importance to delivery times. It is therefore advisable to be able to offer short delivery times.
Tips: This step will be simplified if you are already working or planning to work with a feed manager. The latter will retrieve the product catalog directly from your website or server and help you adapt it to the requirements of the marketplaces, if necessary.
Step 12: Integration of the product catalog
You’re there! Your product catalog is finally ready and you are going to publish your first offers.
There are several methods for integrating your catalog into a marketplace:
- Manual integration via file: using the matrices provided by the marketplace (most often in CSV format). This method is viable if your number of products is low and does not change much. You will have to manually add your future products and update your stocks daily.
- Integration via a feed integrator: the latter will transmit your product/offer feeds directly to the marketplace. Your stocks will be automatically updated several times a day. Unlike manual management, this time, new products added to your website or your source catalog will be transmitted directly to the marketplace.
- Integration via API: a specific development will then be necessary in order to connect directly to the marketplace via API. For more information, please contact the marketplace.
Tips: Depending on the turnover of your catalog, the number of products, the number of variants, and the number of marketplaces, it is relevant to integrate your products directly via a feed manager. You will save a lot of time in daily management.
What you should remember from this article
Before launching, think strategy!
- Define your objectives and your e-commerce strategy according to your business model
- Analyze your market: marketplaces with or without added value, the positioning of your competitors, your customer targets, etc.
- Define your product offers according to your commercial objectives and the positioning of marketplaces
- Develop an effective pricing strategy to face the competition
- Prepare internally: inform and train your logistics, administrative, and customer service teams to best meet the requirements of consumers and marketplaces
- Draw up a roadmap with the marketplaces you wish to join
After the strategy, the action!
- Build a “clean” catalog from the start to save time later on
- Make the crucial choice of the method of integrating your catalog: manual or automated via an e-commerce flow management software…
- Manage your e-commerce activity on a daily basis: offers, promotions, products, orders, messaging, customer service, prices, logistics…
Managing marketplaces is a long-term task. Don’t neglect the work of developing a strategy upstream. This is what will enable you to perform and move forward serenely in the middle of the marketplace’s jungle.
Don’t hesitate to apply a test and learn strategy: nothing is set in stone on the web and everything can and must be constantly adjusted to move up in the marketplace’s referencing, highlight your offers, win the buy box, generate customer reviews and boost your reputation…
Do not hesitate to contact us if you would like to know more about marketplaces. To continue on this subject, we suggest you read these articles: