Advantages And Disadvantages Of Selling Through A Marketplace: Before launching to sell your products on any of these platforms, it is worth reflecting on whether they suit your business.
Advantages Of Selling On Marketplaces
- Visibility: the main one, of course, is the excellent visibility that being present on one of these multi vendor platforms brings to your business.
- Convenience: with a sales platform like a Marketplace, you don’t even need to have your online store. Many e-commerce sellers sell exclusively through marketplaces. Whether it is a managed Marketplace or not, other advantages, such as logistics or customer service, are added that make your life easier.
- Positioning: the big marketplaces invest a lot of money and resources in SEM and SEO positioning. If someone searches for a product you sell on the Marketplace, your product could appear at the top of Google’s results. Advantages And Disadvantages Of Selling Through A Marketplace
- Payments: some marketplaces such as Amazon or El Corte Ingles manage product payments through their website. After deducting their sales commission, they will deposit your money through escrow (after the customer has received their product). The big marketplaces are powerful platforms with many different payment options.
Disadvantages Of Selling On Marketplaces
- Competition: Within a multivendor platform, competition is fierce. Typically, the customer will find a list of stores that sell precisely the same product as you on a single page. And the safest thing is that a few sell it cheaper. This forces you to constantly adjust prices based on offers from other sellers.
- Branding: selling on a Marketplace means sacrificing your branding. Within a Marketplace, it is tough to promote your brand image. Customers search for products, compare them on the screen list, and opt for the one that offers the most advantages in terms of price, shipping costs, etc. They do not usually notice the store from which they come, much less remember it. Advantages And Disadvantages Of Selling Through A Marketplace
- Commissions: marketplaces are not little sisters of charity and take advantage of the transactions made by third parties on their platform; that is clear. But to what extent is it profitable to have to pay a commission on your sales? The Marketplace will deduct the commissions from your customers’ payments directly, so the returns that reach your hands will be lower than the price for which you have sold the product. This is important when pricing the product and calculating margins.
- Algorithm: Like search engines, each Marketplace has its algorithm system. This algorithm is what determines in which position of the list the customer sees your product appears when he performs a search. Advantages And Disadvantages Of Selling Through A Marketplace For example, Amazon is known to place great importance on customer reviews. You must also include the most relevant keywords when filling out your product sheets. Your products may appear on the final pages, especially when you are new to the Marketplace and depending on what you sell.
Also Read: What Is A Marketplace?