For many e-commerce merchants the business of growth is associated with driving customers and converting them on their own e-commerce website. But it’s important to realize that the modern e-commerce business needs to capitalize on a multi-channel approach in order to achieve growth. Depending upon the type of business and the type of products that are being sold, marketplaces can provide a number of those channels, and potentially even a primary growth generator.
Marketplaces provide your business access to many more customers and the ability to sell products to people that are already searching for the products that you sell on the marketplace site. A decade ago there were a limited number of marketplaces to integrate with an e-commerce store and the two primary marketplaces were just Amazon and eBay. Today, thanks to the number of marketplace software vendors that exist, there are many specialty marketplaces in addition to the large consumer marketplaces that can help e-commerce merchants expand reach and revenue. But where should you start if your business or your company is just breaking out “beyond the catalog and cart?” Here are our thoughts on where to start – albeit a bit B2C centric.
Obviously Amazon provides monstrous opportunities for many e-commerce businesses while others that are completely unique with their product offering can afford to stay off of it. For most US-based, consumer-focused B2C e-commerce merchants, Amazon is almost always worth a try. Why? Amazon provides access to millions of customers saving you the cost of driving traffic to and converting customers on your website. But you need to balance using Amazon as a channel with the cost of selling there and the cost of not owning the customer. There is work to do setting up a product feed, integrating with your product catalog and managing an Amazon storefront if you choose to do that. You will have to work through Amazon to work with that customer because that customer belongs to them.
Read about getting started on Amazon here (it’s a good primer even if you know how to sell on Amazon and a good up-to-date resource because their rules change all the time).
So, Amazon – Yes or No?
It’s definitely worth a test – start with your biggest best sellers, promote them with a reasonable budget, and see how your margins work. The volume of orders may convince you that Amazon should be a primary part of your multichannel mix!
Google Merchant Center
Google merchant center is essentially a pay-to-play marketplace where your products will show in the product feed of search results pages on Google. Maybe. If you set up your feed right and if you bid enough. However, if you learn to do this correctly, it can have enormous benefits to your business. If you’ve managed Google Adwords before in any of its generations of availability, then essentially you will be working the same way with products in your feed that you set up to show in the “Merchant Center” feed.
Since Google users can easily sort their search results by News, Shopping, Images, Videos and Maps, your products may also show up when a user goes deeper into the “Shopping” tab which looks like this:
Google Merchant Center – Yes or No?
It may take some testing and it’s possible to get “free” listings without sponsoring them if your product is unique enough. But with Millions of users, the Google Merchant Center feed is worth it to see if you can get traction with millions of people searching for products like yours.
Walmart obviously sells just about every type of consumer good via their retail stores, so it makes sense that they’re using the massive customer base to compete with Amazon online in e-commerce as well. Rather than starting from scratch, they bought e-commerce disruptor, Jet.com in 2016 to jump start their e-commerce presence. With a 120mm+ visitors per month it’s potentially a very profitable place to sell. The process for Walmart is fairly similar to Amazon – right down to the name of their selling portal: Seller Center.
Walmart – Yes or No?
The commission / referral fee structure is generally between 8-15% which is (generally) more competitive than Amazon but Walmart’s marketplace has been around for years not decades (like Amazon), so many merchants express concern that performance isn’t quite there yet. Categories within Walmart that are performing well include home and garden and luggage and accessories. Learn more, here.
Newegg is one of the most popular marketplace-powered online retailers for electronics and related product categories, including a lot of home goods. Anything with a computer or a chip in it – there’s a chance you can find it on Newegg. Think of them as an Amazon for these categories of products. One big advantage of selling on Newegg is exposure to global markets.
Newegg – Yes or No?
Newegg certainly isn’t an option for every company, but if you have a product in this category that you are looking to sell in one or a few overseas markets, it’s a great marketplace for your testing global reach.
The Bottom Line
These are just a few ideas for expanding your e-commerce business into marketplaces. There are many, many specialty marketplaces to explore (like Newegg) and there are new and emerging marketplace opportunities within the world of B2B in distribution and manufacturing as well. In fact, now with the relatively easy availability of marketplace software you can start your own marketplace too!
Ultimately, if you’re in e-commerce, you really need to consider developing and testing a strategy for marketplaces, because for most e-commerce merchants it’s a big part of their success. Of course it’s critical to bring shoppers to your online store, but it’s often worth selling where they already are!