What are marketplaces?
Marketplaces are powerful players in the e-commerce industry as they centralise all the products/services offered by a specific market or customer segment. Their influence has grown increasingly during the last few years.
These are the main players in Europe:
- Amazon is one of the most famous marketplaces for the consumer market. In Europe, they are active in Germany, France, UK, Italy, Spain, Sweden and the Netherlands.
- Zalando specialises in clothes and is present in every European market
- Bol.com in the Benelux
- Real and Otto in Germany
- CD Discount and Rueducommerce in France
- CDON in Sweden, Norway, Denmark and Finland
- Fyndiq in Sweden
- Allegro in Poland
Should I start selling on marketplaces such as Amazon?
- By selling on a marketplace platform, there are profit margin implications to be aware of and the risk that your product might be copied. On the upside, no significant investment is required in order to sell in the biggest European markets.
- Not selling on a marketplace platform, is a missed opportunity to sell your products to a large market. It will require significant investment to re-create the same reach and competitors, who are selling on marketplaces, will steal market share. On the upside, you will have more control over profit margins and can focus on building a high-quality webstore that offers a shopping experience more representative of your brand.
What are the different steps when selling on a marketplace?
- Negotiate with the marketplace on conditions such as commission, shipping, etc …
- Add products to the marketplace (this can be done with .csv file if you have many products to sell)
- Set-up your brand page (if you sell your own products)
- Start a marketing campaign on the marketplace
- Keep on building brand awareness from outside the platform
- Develop your own webstore
Some false assumptions about marketplaces
False, in order to sell and to be profitable on marketplaces like Amazon, you are better off being the manufacturer as there are profit margin implications to be aware of.
In order to be successful on a platform like Amazon, your products need to have a high brand awareness elsewhere. To achieve this, you will also need to:
- Run some above the line campaigns.
- Build a brand page on the marketplace itself and run some advertising campaigns using digital marketing tools like SEA and GDN.
- False. The quantity of products that Amazon orders from you is based on the number of people that visit your product page. A common problem with this is that many visitors go to the product page and just leave without ordering.
False. It is important to have your own e-commerce website. Potential customers will view your products on Amazon but might want to visit your webstore to get some more information about your product and how it is manufactured or to enquire about additional services like gift-wrapping for example. On the other hand, potential customers might visit your webstore first. If they do not wish to create an account for just one purchase, they will go to Amazon or another marketplace to make the purchase. If you have a webstore and you want to sell on Amazon or another marketplace, you can also choose to ship directly to the customer using your own logistics.