Online marketplace sales channels: Why a presence is worthwhile

The days when it was sufficient for most retailers to run their own online shop are long gone. As the number of providers grows, it becomes increasingly difficult to raise the necessary financial, human and technological resources to survive in predatory competition. Successful, therefore, are above all the large online marketplaces such as Amazon and eBay, or the shop networks like Otto and Zalando, which meet the requirements for modern eCommerce and are thus seen as the sales channels of the future. Similar to offline markets, their product diversity and number of providers attract significantly more visitors than smaller shops. There are also more and more specialised marketplaces appearing. In our article “Online marketplaces: Alternatives to Amazon and Co.“, we introduce you to some of these niche or special interest portals, which make a target group-specific distribution possible.

Online marketplaces thus represent an additional sales channel that can be deployed at little effort and offer advantages to the operator, as well as the retailer and customer.

The info portal has published a Guideline for selling on online marketplaces and, based on five important points, justifies why a presence at online marketplaces is worthwhile today.

#1 Marketing for online marketplaces: Reach customers with little effort

In times of SEO and SEA, social media marketing and content marketing, generating a profitable operating reach becomes a mammoth task that overwhelms many online retailers. Either time and money is invested in the development and implementation of a marketing concept, or you can sell right there where potential customers are to be found. In both cases, online marketplaces offer a distinct advantage. On the one hand, they have more resources, know-how and personnel, and accordingly ensure that the retailer’s products are first noticed at all by their target group. And secondly, they have many active buyers, from which all retailers benefit on these platforms. In addition, there is a trust that most marketplaces enjoy because of their high profile and which in part at least transfers to the affiliated retailers.

So if you sell your products at online marketplaces, you can reach a large number of potential customers without much marketing effort.

A survey by ECC Cologne and Hermes shows the awareness and use of online marketplaces in Germany in 2017. For example, 80.7 percent of respondents said they had already used eBay before (Source: Hermes, Statista Analyse).

 #2 Payment processing at online marketplaces: Support for the retailer

Payment processing in online retail is still a difficult topic. If you, the retailer, offer purchase on account, the uncertainty remains as to whether the customer will pay the outstanding balance. Buyers, in turn, must trust on the delivery of goods in advance or wait for refund of the purchase price for returned items. Here, too, online marketplaces offer a remedy: Some take over the entire payment process, whereas others provide more a form of communications platform. 

There are differences in payment processing depending on the online marketplace. Some take over the entire payment process, while others completely leave the retailers to communicate with their customers.

There are differences in payment processing depending on the online marketplace. Some take over the entire payment process, while others completely leave the retailers to communicate with their customers.

If the respective marketplace operator adopts the payment process completely, then the retailer must deliver as soon as the customer orders. However, if the customer chooses prepayment as the payment method, the operator first awaits payment and then forwards the order on to the retailer. From this point on, the purchase contract is considered closed. In this case, the online marketplace remains the claimholder and, in default of payment, also performs the legal dunning and collection procedures. Regardless of the customer’s payment behavior, the retailer will in any case receive their credit balance after about two weeks, minus the commission they have to pay to the marketplace.

Processing on eBay, however, is different. Here, the retailer decides which payment methods they offer and takes over the customer communication themselves, as well as any reminders arising. In addition, the retailer usually receives their money immediately after customer payment. The payment methods to choose from include PayPal, credit card, direct debit and purchase on account.

#3 Service at online marketplaces: More convenience for the customer

Customer inquiries regarding product details or delivery times are fundamentally a matter for the retailer. Nevertheless, small marketplaces in particular offer free hotlines for retailer support, which allow for clarification of simple questions, such as returns processing. Added to this are the infrastructures of the respective marketplace. Standardised order processes, as well as a consistent article presentation and navigation structure, make it easier for customers to find their way around.

Also in customer communications, retailers are supported by the marketplace operators. These take over the e-mail support for standard processes such as order or payment confirmations. As a rule, buyers also have access to a form of customer center through which they can view and manage orders.

#4 Technology at online marketplaces: High master data quality for rapid link up

As far as the technical connection to the online marketplaces is concerned, the master data with all the important information about the product is crucial, as well as the dynamic data which shows the availability of the product. It is important here that online retailers maintain their databases and upgrade them regularly. If, for example, item descriptions are not standardised, then this can lead to false listings – a reason that can prevent a successful sale at an online marketplace. How you can avoid faulty master data can be found in our article “Big Data Projects: Only valid master data leads to success“.

When uploading data, marketplace operators provide support to the retailers. There is the option of uploading or importing product data as a file and processing of the article data via a web interface. For many shops, there are also interfaces in the form of modules or plugins, by which product data maintenance can be controlled automatically from your own online shop or inventory management system.

#5 Cross border retail at online marketplaces: Expansion of your customer base

Overseas sales are particularly easy via online marketplaces. International operators especially, such as Amazon or eBay, usually offer retailers support and privileges. With an international seller account, 200 markets can quickly be reached. We show you in our article “How to successfully enter into international eCommerce“ how entry into cross border retail proves itself worthwhile.

To professionalise your overseas business, however, it is advisable to make some preparations. Offer the preferred payment methods for each country, calculate the shipping costs and check out the legal requirements. In face of high product availability, international customers can be convinced most of all by a tempting price. You can read in our article “Limitless profit: Success in international eCommerce” how to make the offering and processing as easy as possible.

Avoid risks with optimal pricing

Selling on online marketplaces brings additional profits, as well as new clientele, for online retailers. You don’t have to worry about additional marketing and are supported in both the payment processing and customer service.

Nevertheless, there is a risk of losing margins by selling on marketplaces. Retailers need to know exactly which items they can sell on which platforms at what price and also respond dynamically to the market. By analysing the market and your competitors, prices can be set optimally.
Automated tools, like the Business Intelligence software blackbee are indispensible in this area. Without these, online retailers are throwing away valuable advantages on the market.

Would you like to monitor your market environment in (international) eCommerce and receive important insights? blackbee allows a uniquely precise overview of your competitors and their assortments. With daily updated, highly valid data you can see how competitive your own prices are on the internet. Test it now!