Use of Online Marketplaces Set To Grow in 2015

MarketAn interesting news release from the Royal Mail provides further evidence of the increasing dominance of online marketplaces such as Amazon, eBay, Tesco, Play.com, Esty, Notonthehighstreet etc. where it appears that 63% of online retailers are looking to increase their exposure to these marketing channels whilst a quarter of the respondents said they were planning to use them for the first time in 2015. For those companies who are planning to just dip their toe into the market we have some tips you might find useful.

Consider just adding the products you currently find it difficult to sell.
Many online retailers start by taking a full list of their products and adding them, in their entirety, into the new marketplace without assessing if that would actually be to their benefit. If the flow of sales of a particular product or line of products is more than satisfactory at the moment then perhaps you should keep them to yourselves.

There are risks off adding products to these services. Firstly there is the consideration of ‘duplicate content’ which is a feature of the Google quality algorithm. Essentially if there are too many instances of sections of product descriptions across multiple websites than some of them could suffer as a consequence. It may be better to selectively upload the products that you’re currently finding it difficult to sell with the hope that the sheer volume of users of those services can help you shift the problematic stock.

Be aware that sales volumes from these services aren’t consistent
Sites such as EBay rely to some degree on their search engine performance. At times it seems that whenever you search for a product there will be an EBay listing present in the top few places of Google. Whilst at other times EBay doesn’t appear so much. This may be due to the nature of their search engine optimisation strategies where it appears they have frequent reratings as this chart from Sistrix may show:

ebay performance

whilst some (play.com) are going the wrong way …

playcom

others (tesco.com) going the right way …

tesco

but it is mostly about scale:

Online Marketplace Visibility Comparison

the last chart is important. If you are keen to try out marketplaces then, if you look at search engine appeal alone then Amazon and eBay are by far the most important, but there is so much more to consider than scale and reach.

Think Niche
Don’t forget to try niche marketplaces too such as Not On The Highstreet (still very large), ASOS, Etsy, Folksy, Fruugo, MISI, Toymart.com, Notmassproduced.com and even Pixmania. This may give you a more targeted approach in an environment which may be less price-sensitive. Look for marketplace services that focus on your niche.

Consider Returns
If you are using Fulfilled by Amazon or our own Cloud Fulfilment service then customer returns can be handled for you – which has benefits when you consider centralising your stock.

Look At the Costs
It is essential that you look at different scenarios in terms of sales volumes you expect and the costs. Some marketing channels will charge 25% commission and if you’re only able to make 35% margin then, when you take into account your time managing the channel and the costs of potential returns then it may not be worth it.

Consider the Channel as Acquiring Long Term Customers
Each of the channels works in their own way and will have their individual restrictions. However, if you sell via EBay there is nothing stopping you placing marketing literature in with your product to offer people a discount for buying direct to lessen the impact of the sales fees. This may also be the case for Not On The Highsteet and others.

The dilema, of course, comes if you consider having one centralised stock system. Using Cloud Fulfilment you can control the stock levels reported within the marketplaces and sell via your own website and manage stock just as if the order came via a marketplace.

Have a think about Fraud Protection and Security
With many credit card processing services, such as Stripe, the fraud detection feature is helpful. Furthermore, shopping cart services such as Shopify also have built-in fraud detection features that will help. However, selling to historically active Amazon customers who would have built up their own profile in their system would be a strong draw to using them as a marketplace.

Other considerations would be your attitude to fraud on eBay and the use of PayPal. When you look at the marketplaces ensure you are fully aware of the processes and costs of handling fraudulent transactions.

Consider Optimising Product Titles When Using The Channels
If you are trialling a marketing channel it would be worth spending some time to try and see their potential. Due to the sheer volume of listings on EBay the key to success is having, what could be seen as, spammy product titles can help you get much greater exposure in their search results. Whilst with Amazon a major feature of getting top listings is the level of service you offer your customers.

In summary
Online marketplaces offer a near immediate solution to gaining massive consumer exposure. But if you are new to the channel then you should carefully select which products and marketplaces to trial. You should also look at the fine print of the contracts and pay special attention for the fees for placing, t]–>