Marketplaces, an opportunity to boost sales

Selling on a marketplace can be an excellent opportunity to boost a business’s sales. For those without an online store, starting to sell on a marketplace can be appealing, since the barriers to entry are relatively low.

Initially, there’s no need to invest in developing an eCommerce site: you can reach a large number of users without investing in online marketing, and you don’t need a range of payment methods, delivery options or logistics providers.
It’s an easy way to go online with minimal investment and management.

On the other hand, bear in mind that, depending on the sector:

• there are usually a large number of competitors,
• you have to pay sales commissions (which reduces your profit margin),
• it is hard to stand out as a brand,
• you must comply with each marketplace’s rules,
• you need to review and monitor to try to rank well
• and finally, know that the customers belong to the marketplace, not the seller.

If you have an online store, using alternative sales channels such as marketplaces can be very important to increase sales volume and business overall.

Some of the main marketplaces to consider are: Amazon, Aliexpress, eBay, Privalia, ECI (El Corte Inglés), FNAC, Pixmanía, Zalando, Spartoo, Vente Privee, TMall and Rakuten, among others.

There are 2 types of marketplaces: horizontal and vertical.
Horizontal marketplaces are more general, offer a wider range of products and have a high overall traffic volume.
Vertical marketplaces specialize in one theme (for example, Runnics for running shoes), offer products from a specific sector and have a more relevant audience, which brings greater visibility and possibly more efficient sales.

There are several very important aspects to consider when assessing whether to start selling on a marketplace.

• • • Marketplace analysis and selection

      Depending on your goals, company profile and target audience, you might consider starting to sell on a horizontal or vertical marketplace. It’s important to have a sales forecast to avoid stockouts.

    • Catalog selection, pricing, product feed

      Another important aspect is choosing the product catalog you want to offer on the marketplace. You need to analyze what competitors are selling, market maturity and your ability to handle high sales volumes, as well as being able to offer distinctive, competitive products and prices.

      Once the catalog is defined, you need to create a product feed that meets each marketplace’s technical requirements. LogiCommerce lets you manage product feeds for the initial catalog upload. Since each marketplace has a different feed format that is updated quite often, our eCommerce platform is integrated with an external partner (QaShops) that, among other things, adapts the feed to each marketplace’s format.

      In addition to the product feed, another data feed is usually used to update prices and stock more frequently. This avoids stockouts and, consequently, marketplace penalties. This feed is also managed through QaShops to sync stock between LogiCommerce and the relevant marketplace(s).

      Finally, consider how the store’s ERP will be integrated (via XML files or API – Webservice) to fully coordinate update and sync times across all platforms.

    • Product details and ranking

      It’s key to craft product pages professionally in terms of features, general description and image quality.
      All this information, together with semantics, sales history and response times to questions and customer service, helps the ranking of products on the marketplace.

    • Logistics strategy

      You also need to decide whether you will ship products directly to the end customer or through the marketplace.
      For example, with Amazon you can choose FBA (Fulfillment by Amazon), where you hand your products to Amazon and they ship them to the end customer.
      There’s also FBM (Fulfillment by Merchant), where the seller ships the product to the end customer. In this case, meeting delivery times and service quality is important to avoid penalties.

    • Analysis and monitoring

      Once you’re selling on a marketplace, you need to analyze the sales data each one generates, broken down by product, price, associated costs and, finally, unit and overall margin. That way you’ll clearly see what it contributes to your business. This matters because margins differ greatly depending on whether you’re a manufacturer or a multi-brand retailer. In the latter case, though, higher sales volume gives you more leverage to negotiate better terms with brands and cut costs.

Marketplaces are also useful for testing and entering international markets and measuring the response to and effectiveness of your product offering before investing in opening an eCommerce store.

Once you’ve decided to sell on a marketplace, it’s important to build relationships with customers through social media so they get to know you directly. This will help brand recognition and, if you have an eCommerce store, increase the chance they’ll buy from it.

To manage the marketplaces you sell on optimally, we recommend implementing QaShops.
Benefits of integrating LogiCommerce with QaShops:

If you want to start selling on marketplaces, don’t hesitate to contact us. We’ll be happy to help you increase your online sales.