Do you run a brick-and-mortar business without a website? Or are you a small to medium-sized business owner with an online presence but want to expand beyond your website? A good strategy to grow your sales is to cast a wider net in search of new customers and make a plan to start selling on both popular and niche eCommerce marketplaces visited by millions of shoppers every day. One thing is for certain —more and more people are shopping online every day, and thanks to the pandemic, the number of online shoppers is exponentially growing. Selling on one or more online marketplaces should be part of your business plan.
So what is an online marketplace?
An online marketplace is a platform that allows users to shop from a great variety of different sellers. The platform can help sellers expose their inventory to a larger audience.
We are all familiar with the biggest marketplaces, such as Amazon and eBay, but these are just two big players in a diverse and rapidly expanding ecosystem that is called eCommerce.
Online marketplaces have been a growing force in retail for over two decades, but there is no question that the pandemic has given a phenomenal boost to that growth.
Basically, an online marketplace is like a digital flea market. The person that hosts the flea market does not own any of the products but helps bring buyers and sellers together under one common digital roof. Let’s take eBay as an example. You can sell your products on eBay, but there is a cost to this service, such as fees for posting your product and for the successful sale of your product. This popular marketplace also offers great exposure to buyers looking for products, but you will also need to compete with others who are selling similar items. This competition will be influenced by your selling price, customer reviews, and other perks that you may want to offer, including free shipping.
In addition to eBay, other examples of online marketplaces include Amazon, Etsy, Walmart, and Newegg.
In 2020, $2.67 trillion was spent globally at the top 100 online marketplaces. The gross merchandise sales grew 29 percent at these online marketplaces from 2019 to 2020. With the worldwide pandemic, these numbers will likely go even higher, considering that online shopping has become the preferred way to purchase goods and products.
Now you might be curious, what are the best places to sell online?
Whether you already have an eCommerce website or not, expanding your reach into other marketplaces is a solid choice for growth. Here are some of the most popular online marketplaces and the key points to consider if you choose to sell there.
The platform was launched in 1995, and it was a favorite for those trying to sell used goods, but it has since evolved into a powerful market for businesses looking to expand their target audience. With over 183 million active buyers and revenue that amounts to $10.8 billion, eBay is one of the largest online marketplaces. The site is easy to navigate, accessible to mobile shoppers and also provides a pleasant experience ranking high in customer satisfaction with a 78 in the most recent American Customer Satisfaction Index (ACSI). Commission ranges from 7-11% and the monthly fee is $7.95. The company offers a wide range of tools and resources to help online retailers, including their fulfilment service eBay Global Shipping Programme (GSP). Sellers also have the option to open an eBay Shop to benefit from better branding opportunities and promotional tools.
Unlike eBay, Etsy caters to a more select market and promotes hand-crafted and vintage products. But although the focus is narrow, the market is still huge with 2.5 million sellers and over 50 million buyers. There is no monthly fee to sell on the marketplace, but there is a 5 percent charge on all transactions and a $0.20 product listing fee. There are also a number of rules when it comes to selling on Etsy, including what can be classified as vintage and what can’t be sold on the site.
This trusted and popular marketplace has grown into the biggest marketplace in the world, with over $386 billion in retail sales in 2020. Amazon also offers Amazon Prime, which is a membership service with 112 million subscribers paying an average of $1,400 a year. The strong number of close to 250 million worldwide browsers and buyers on Amazon has attracted close to 5 million sellers who are using this marketplace to improve their sales. It is important to keep in mind that the rules to sell are strict and that there are costs to selling through this marketplace, including listing, inventory, fulfillment, referral, and selling plans.
With well over 11,000 stores operating in 27 countries and serving more than 270 million customers each week, Walmart is also one of the largest players when it comes to online marketplaces. In 2009, Walmart marketplace launched, opening up the Walmart.com platform to sellers looking to expand their business. In 2020 alone, it saw a 78 percent increase in eCommerce growth, and much like the brick-and-mortar stores, this online platform provides an outlet for a wide range of products in various categories that range from toys to clothing to home and gardening goods. Selling fees also range depending on the types of products and what categories you sell them in.
Unlike Walmart, eBay and Amazon, but more in line with Etsy, Newegg can be considered a niche marketplace with a specialized category covering tech (computer parts, electronics and more). Founded in 2001, Newegg has reported revenue of $3 billion, and with 32 million buyers worldwide, sales are projected to grow significantly in the coming years. Like the other major online marketplaces, Newegg provides shipping and fulfillment services. Newegg also offers three levels of seller plans, including standard, professional and enterprise, each at different price points and commission fees that will vary according to the category of product sold. The platform first started in the US and now it is aggressively expanding in Europe and Asia.
Selling on multiple online marketplaces is the best path to follow, this allows you to present your products to a wider audience. You’ll need to go over your options and make sure that the fees are not prohibitive, the services will benefit your business and the online selling outlets are easy to use. To manage your inventory across all of these different online marketplace, you will need software that is powerful and responsive enough to make sure you don’t oversell your goods. Nventree is a software solution specially developed for multi-channel sales in mind, it helps you keep track of your inventory, orders and it allows you to manage your business from one easy-to-use interface.