An online marketplace is an e-commerce website where the products for sale are provided by multiple third parties and the transactions are facilitated by the marketplace operator. Popular online marketplaces include in Australia include eBay, Trading Post Online and Quick Sales. Online retailers can leverage online marketplaces to increase sales, increase brand awareness and acquire new customers.
Online marketplaces can be a cost effective avenue for doing business for both traditional and online retailers. For traditional retailers, marketplaces offer a low cost of entry into the online space, allowing them to test a market’s response to their offering with limited risk or capital investment. Marketplaces such as eBay also offer mass market exposure for a relatively low cost and measurable ROI, allowing smaller players to compete on the same playing field as larger more recognised brands.
Marketplaces allow for existing online retailers to expand their reach and enhance their brand’s online visibility. For some, marketplaces can also act as an additional sales channel for end of line goods or clearance lines. In many of these cases retailers may “spin up” a separate brand or identity to reduce the risk of their marketplace offer cannibalising their traditional sales channel.
Provided online retailers are already offering their products for sale on their own website, the use of marketplace connects such as those offered by Neto allows retailers to replicate and manage this content on marketplaces such as eBay quickly and easily with little upfront investment.
There is no doubt that an online offering should be part of every retailer’s strategic plan. However, gone are the days when someone can just create an online website and become successful. The online space is fast becoming very sophisticated, but there are still many operators not doing e-commerce well. The biggest thing to remember with e-commerce is that many of the fundamentals of traditional retailing still exist. Successful online retailers are offering ‘the full package’. They are providing systems along the way that make transacting online easy for the online user and that give the user confidence about every step of the transaction.
Well photographed products and accurate item descriptions are a must for marketplace sellers. Not only will this reduce the number of pre-sale enquiries you receive, but it will also increase customer satisfaction, as expectations at the point of order receipt will better met.
Use readily available market research tools such as Terapeak to gain real time insights into your marketplace competition. Tools such as these can help you understand gaps in the marketplace while also helping you to structure and price your listings accordingly.
Online consumers are becoming savvy internet shoppers, long gone are the days of 1c auctions with overpriced freight components. Retailers must now ensure they have the systems in place to allow them to offer the best possible freight rates to their customers, whilst not losing margin along the way.
This may involve implementing a multi-carrier freight system that allows for the automatic selection of freight carrier based on customer location and order content.
There are a number of listing management tools and order fulfilment solutions available that can help to automate the listing and after sales processes involved in selling through marketplaces.
Solutions such as those offered by Neto enable businesses to accurately manage large volumes of eBay listings, complete and ship eBay sales and raise unpaid item disputes from one centralised solution. This in turn leads to cost savings that can be passed on to the consumer.
Online marketplaces are more than just selling platforms, they are a forum for a community of buyers to discuss and review your products and your brand. Maintaining a high level of positive customer feedback is therefore an integral part of any successful marketplace business. According to Bazaarvoice, 94% of online product shoppers read reviews before making a purchase, highlighting the need to make feedback maintenance a key focus of your marketplace business.
Provided the right technology is put in place, the maintenance involved in a business’s online marketplace presence can be drastically reduced. Solutions such as Neto can automate the listing and after sales process involved in selling through marketplaces such as eBay, negating the need for duplicate data handling and manual listing or stock management.
Without automation though, managing a marketplace presence can be a large job in itself. It typically requires people with multiple skill sets from design to logistics and customer service.
Auction type environments, where listings have a limited life span, are typically more resource intensive, which is why it is important to research and determine which selling format is best for your business prior to any capital commitment.
There is no doubt that Facebook, Twitter, Google+, etc. are becoming major channels and traffic drivers for retailers. According to data from Compete, social media sites send more referral traffic to online retail sites than Google!
As a bare minimum, all retailers should be including socially driven site features such as Facebook “like”, Twitter and Google + buttons on their website pages, empowering enthusiasts to spread the word about the brands and the products they love. Recommendations from friends have enormous credibility and this is ultimately what sets Facebook apart from other e-commerce marketplaces.
Retailers should also explore setting up a “social shop” within their own Facebook fan page, enabling consumers to browse, buy and recommend their favourite products within the Facebook framework. Neto’s Facebook shop application is ideal for this purpose.