Choosing an E‑marketplace to sell your products on ‑ Online in 2024
E-marketplaces have become increasingly popular. Many shoppers prefer these platforms for the convenience they offer, and competition among sellers is intense. These marketplaces connect various sellers and buyers, enabling them to sign up, list product categories, and make transactions.
Since 2014, E-marketplaces have generated $3 trillion in revenue, with over 50% of global eCommerce sales coming from them in the past year. These platforms excel at connecting the right buyers with the right sellers, and they have established rules to protect both parties’ interests. Knowing which E-marketplace to sell products on can be overwhelming, which is why we’ve compiled a report to guide you on how to choose the best marketplace.
Opportunities for Selling Online
The world of retail presents a wealth of opportunities for both newcomers and seasoned sellers. Business Insider reports suggest that 2022 will see e-Commerce sales surpass the $150 billion mark, with a particular emphasis on Direct-to-Consumer (D2C) brands. This booming market, however, comes with increased competition, making it essential for sellers to strategize effectively. Whether you’re just starting your eCommerce platform journey or aiming to expand your existing retail business, online selling platforms offer a promising gateway to success.
The Benefits of Selling on Online Marketplaces
One of the quickest ways to jumpstart your online business is by joining established online marketplaces such as Amazon, Walmart, Etsy, AliExpress and eBay. These platforms have a strong track record of delivering remarkable results. Research indicates that online sellers can boost their retail sales by up to 1,250% simply by listing their products on these influential channels.
Top Online Marketplaces: B2B
When it comes to finding the right place to want to sell products, manufacturers have a plethora of options in the form of various online marketplaces. Each of these platforms offers something unique and caters to specific groups of buyers. It’s essential for manufacturers to figure out which marketplace aligns best with their business goals, ensuring they can reach both potential buyers and potential retail partners who want to buy and sell respectively.
Some manufacturers might discover that niche marketplaces are more suitable for their products than the broader, general ones. For example, Etsy serves as a prime platform for independent artists and craftsmen. It’s the go-to place for unique, handcrafted items, making it easier for sellers to find their niche audience. However, for most manufacturers, general marketplaces are the primary go-to options.
The most significant online marketplaces with global sales include
These platforms collectively serve over 1 billion consumers worldwide. Let’s briefly discuss each one.
Amazon is a household name in the online marketplace world. It boasts a customer base of over 300 million people and offers a vast array of products. Amazon provides useful programs like “Fulfillment By Amazon” for efficient product handling, but it comes with relatively high fees. The customer base varies widely, from teenagers to those over 60, all looking to either sell on amazon, or for a diverse range of reasonably priced products with quick delivery.
Etsy stands out as the largest online marketplace for handcrafted and vintage goods. With 54 million members and 35 million buyers, it has created a well-established community. Etsy specializes in one-of-a-kind products and appeals largely to female customers. It fosters a sense of belonging and enhances the customer experience with customized packaging. Selling on Etsy has become quite popular.
AliExpress, managed by Alibaba in China, focuses on international customers seeking budget-friendly products. With over 700 million online buyers, it ranks second only to Amazon for international sales. Shoppers on AliExpress are primarily looking for cost-effective items, and its success lies in its unmatched reach to the Chinese market.
Walmart, a giant in the US retail industry, has successfully ventured into the online marketplace arena, targeting millennials. They’ve added personalization to the online shopping experience and partnered with FedEx for discounted shipping, fostering trust among customers. Walmart caters to a wide range of people seeking everyday goods.
eBay is another notable online marketplace with lower seller fees compared to Amazon. It’s known for its strong search engine optimization, which means products listed on eBay are likely to be discovered through Google searches. It also offers substantial savings on shipping costs, which can be a significant selling point for sellers. eBay’s customer base consists of loyal, long-time users in search of specific products.
While these major marketplaces we’ve discussed have their merits, they’re not the only options for buyers and sellers. There are numerous niche marketplaces available, waiting to be explored to find the perfect fit for your business and your ideal customers.
Which Ecommerce Marketplace Business Model Is Right for You?
Once you’ve pinpointed the E-marketplace that aligns with your goals, the next step is determining how to conduct business on these platforms. There are various models to choose from, each with its own advantages and challenges. Selecting the right model is a critical factor in your success on these platforms. Manufacturers need to evaluate which models best match their supply chain, budget, time, and risk tolerance. The two most popular models are D2C and B2C.
D2C, or Direct-to-Consumer, involves businesses selling their products directly to end-consumers without involving third-party intermediaries. This approach allows a company to both produce and distribute its own goods through its own sales channels. While the concept is not new, D2C enables companies to maintain greater control over brand reputation and craft a dedicated shopping experience.
However, this approach can be cost-prohibitive for many medium and small businesses due to budget constraints. Setting up in-house sales and distribution networks can be expensive and labor-intensive. Online marketplaces offer a more accessible option, enabling businesses to establish a presence with minimal effort and cost, often getting started the very next day.
Many companies are now embracing D2C e-commerce and creating their branded online stores. Still, even in the digital realm, it’s challenging to be everywhere at all times because the online world is vast. While a D2C store enhances brand reputation, it’s important to acknowledge that it may limit exposure to a broader customer base.
Traditional Retail (B2C)
Traditional retail, or Business-To-Consumer (B2C), involves manufacturers collaborating with middlemen, known as retailers, to facilitate the sale of their products. Retailers earn a profit by selling the products at a price above what they paid the manufacturer. They handle marketing, distribution, and sales. Retailers, in larger numbers, can reach a more extensive audience through collective efforts. Examples include shopping malls, department stores, and restaurant chains. The term gained prominence during the dot-com era’s initial growth of online sales.
Retailers provide the resources, infrastructure, and space that manufacturers may not afford on their own. While a dedicated store on an E-marketplace may reach thousands of buyers, retailers can exponentially increase that number. On Amazon alone, there are approximately 3.64 million retailers, showcasing the extensive reach and product-moving potential they offer. However, one aspect where retail sales may fall short is in providing a personalized customer shopping experience.
Key Factors for Online Selling
Before diving into the world of online retail, several critical factors should be examined closely.
- Marketplace Traffic – The quantity and quality of visitors to a marketplace are essential considerations. While established marketplaces like Amazon tend to draw significant traffic, niche platforms might have different dynamics.
- Fee Structure – Understand the fee structures and hidden costs associated with each marketplace. These may include selling commissions, listing fees, inventory costs, and shipping fees.
- Support from the Marketplace – Investigate the support provided by the marketplace. Many platforms offer tools for marketing and sales, or even access to dedicated advertising services.
- Rules and Regulations – Realize that, as a third-party seller, you’ll have less control over your business compared to having your independent website. Each marketplace has its own set of rules and regulations.
- Geographic Popularity – Consider the marketplace’s popularity in your region. For instance, in the United States, Amazon is preferred by a vast majority of online shoppers.
Effective Strategies for Online Selling
Once you’ve chosen the right marketplace and conducted your research, it’s time to implement effective strategies to ensure long-term success.
- Optimize Product Content – The content of your product listings plays a pivotal role in motivating customers to make purchases. Effective product titles, descriptions, and categories can significantly impact your product’s visibility and sales.
- Prepare to Advertise – Invest in advertising to reach your target audience. Sponsored ads on platforms like Amazon are proven to drive conversions effectively.
- Calculate Profits – Analyze the overall costs and profitability of each marketplace by accounting for fees, traffic, niche relevance, and other expenses.
- Automate Your Pricing – Price your products competitively based on marketplace competition and customer preferences. Experiment with different price points to optimize your listings.
- Diversify Your Shipping Strategy – Ensure that you offer fast and preferably free shipping, as customers now expect this convenience. Some marketplaces, like Amazon, offer fulfillment programs that can add credibility to your products.
Order Fulfillment: The Options to Start Selling
Manufacturers need to consider order fulfillment when choosing a marketplace to sell on. This process can be tricky as it often hinges on your account ratings, and late or failed shipments can lead to fines or even store suspension. Even when working with retailers, the responsibility of order fulfillment may not be entirely off the manufacturer’s shoulders. With online retail sales, various fulfillment models are available, and the more involved the manufacturer is, the higher the potential profit margins.
This option involves store owners taking charge of order fulfillment themselves. While it offers the least risk for manufacturers, it’s also the riskiest and costliest choice for sellers. Sellers must maintain inventory, plan for sales in advance, and ensure safe and timely shipping. Manufacturers, in this case, have less control, and improper business practices by sellers can harm both reputations.
Third-party fulfillment means using another organization to store, package, and ship products to customers. In many cases, the third party is the online marketplace itself, such as Amazon, eBay, or AliExpress. For instance, Amazon’s FBA service allows sellers to stock products in Amazon’s warehouse and benefit from their efficient shipping network. This option minimizes risk for both sellers and manufacturers. Products fulfilled by Amazon or other such services are often labeled as “Prime,” which garners more trust from customers and leads to increased sales.
Dropshipping is one of the most popular fulfillment methods on online marketplaces. It involves sellers not holding inventory but listing products in their stores and ordering from manufacturers only when a customer places an order. The manufacturer then ships the order directly to the end consumer. This option carries the least risk for sellers, as they don’t need to purchase products in bulk, but it can create challenges in terms of timely shipping. Manufacturers can maintain higher profit margins and avoid bulk discounts but must ensure efficient shipping. Selecting the right shipping service is crucial. Below are some trustworthy options.
- UPS (United Parcel Service) – A globally recognized courier service with a broad range of courier solutions and a strong reputation for reliability and operational excellence in over 220 countries.
- DHL – Another global courier service provider known for fast international shipping, although it tends to have higher shipping charges compared to competitors.
- Federal Express (FedEx) – Operating in over 220 countries, FedEx is renowned for its overnight shipping and cost-effective services, with real-time updates for customers.
E‑Marketplace.com: Helping You Select the Best Online Marketplace
E-Marketplace.com is a company that provides valuable services and expertise for businesses and individuals navigating the complex world of e-marketplaces and multi-channel sales and marketing. They cater to retailers, wholesalers, brands, and e-marketplace operators, offering services that range from optimizing delivery systems to extending marketing strategies. They specialize in helping businesses adapt to the digital transformation era and offer a comprehensive skill set, including e-commerce, social media management, and data analytics. E-Marketplace.com initiates the process with a free consultation and detailed proposals to guide companies towards multi-channel success.
No single E-marketplace suits every business, but there’s one that fits yours. Whether you make things by hand, ship globally, or deal in tech, there’s a retailer looking to collaborate.
Whatever you choose, taking your products online can broaden your income sources. And in tough times, having options is invaluable. Open up new paths to success for your store with an online retail space that brings in fresh income and connections.