The Dangers of E-Commerce Brands Relying on Large Marketplaces

Leading marketplaces have long been the first choice for many businesses when stepping into the world of e-commerce. However, an over-reliance on a single marketplace puts companies in a risky position.

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Online marketplaces offer a fast, low-risk and low-cost way for businesses to test new markets, reach more customers and boost international sales. It is no wonder, then, that marketplace selling has become a key strategy for many e-commerce businesses.

Leading marketplaces have long been the first choice for many businesses when stepping into the world of e-commerce. However, an over-reliance on a single marketplace puts companies in a risky position. 

With competition fierce, the big marketplaces are demanding more from their sellers. This means many sellers spend more time managing their online marketplace account, rather than focusing on nurturing growth.

How looking beyond using one marketplace can improve business e-commerce

Many businesses are re-thinking their online marketplace strategy and looking toward a more diversified approach to marketplace selling. With the Top 100 marketplaces accounting for more than 95% of global marketplace sales, there is no denying that online marketplaces play a vital role in e-commerce business growth. As such, there are new alternative marketplaces popping up all the time.

Looking toward other online marketplaces means that retailers are now able to take a more considered approach, which gives sellers far more opportunity to reach international buyers. 

An online marketplace strategy -- identifying new opportunities

Widening your online marketplace-selling strategy can be a daunting prospect, but looking beyond mainstream selling platforms offers a more targeted approach to selling in global regions.

But, when considering your next move, there are some factors you might want to consider including the level of competition from other sellers, amount of consumer exposure and how easily you can integrate your existing technology. 

Another critical part of marketplace selling is the delivery and returns processes. It’s important to make sure to fulfill delivery promises, not only for customers, but to strengthen your relationship with the marketplace too. Keeping customers happy will lead to more positive online reviews, which will only help you stay in favor of the marketplace. This means they will offer proactive expertise and support to help achieve business goals. 

Don’t forget, many marketplaces impose very strict delivery requirements, though. Managing this can present quite a challenge for many businesses – it’s not unknown for some sellers to have their accounts suspended if their delivery doesn’t meet marketplace guidelines.

One way to combat this could be to enlist the services of a multi-carrier partner to take care of delivery and returns services on your behalf. Not only can you get expert advice on the best delivery services for products and customers, but they’re also fully monitored and tracked for you. This would allow the free time to be able to focus on your multi-channel growth strategy. 

How the customers’ experience can make you more competitive 

One of the biggest dangers of online marketplace selling is the level of competition. Not only are you up against other similar retailers and merchants, but increasingly, marketplaces are also competing with their line of products and own logistics network.

Of course, competing on price is one option, but this only creates a race to the bottom. Repeatedly cutting costs leads to tight margins, which is financially precarious. 

Continuously expanding product lines, using social media and offering strategic promotions are all good ways of attracting customers. Another option is to provide a key feature that will encourage buyers to choose you and your products over the other brands. 

One of the biggest challenges for many retailers is delivery and returns, and yet it is one of the key areas noted in customer satisfaction. Nearly 41% of customers abandon their shopping cart due to the lack of convenient shipping options, so this is potentially a key area to boost your online marketplace sales.

Using a mix of carriers and services will give customers more options and flexibility, something consumers have come to expect.  Communication is also key, as customers like reassurance that their parcel is on the way. This is another area where enlisting the services of a multi-carrier partner could be a real help. They will maintain constant contact with carriers on your behalf, giving you and your customers peace of mind. A smooth, stress-free delivery process will make it easy for customers to complete their purchase first time and again in future. 

Continuing to grow all aspects of an e-commerce business

Growing all aspects of an e-commerce business is achieved through nurturing your website and the online store and getting your marketplace strategy right. Make sure to look beyond just the big marketplaces to find the one that works for you, your products and your consumers. It's also important to make sure your operations are running smoothly, so that you can go up against the retailers you are competing with on marketplaces, especially when it comes to delivery and returns. Only through a proper marketplace strategy that is balanced with the other aspects of the business can retailers really thrive.