Disadvantages Of Selling On Marketplaces:
- Costs and commissions.
Selling On Marketplaces: Disadvantages. When starting to sell in a Marketplace, it is essential to sit down for a long time to analyze all the costs and commissions that creating to sell in it will imply. On many occasions, the commissions represent a significant percentage, leading us to be very aware of our prices. On the other hand, in addition to commissions in some marketplaces, there are also fixed monthly costs. Everything depends on its policies, so it is necessary to review the conditions well and make numbers to see if it pays or not to enter the Marketplace.
- A lot of competition within the Marketplace itself.
As we have mentioned, we are in the era of marketplaces, so everyone is selling on them, obviously your competitors. Suppose on the Internet, it is always said that the competition is just a click away in a Marketplace. In that case, it is much more evident since users can see your products with those of the competition directly on the platform itself, without having to click. In addition, getting visibility for your products within them can be complex and involve costs for investment in advertising.
- Customers are not yours; they are from the Marketplace.
When you make a sale on a Marketplace, the customer is not your company but the Marketplace itself. This implies that we will not have access to customer data (email, etc.), so we will not be able to impact customers who have bought from us within the platform. With this measure, the Marketplace intends that you do not “steal” customers, and they end up repeating their subsequent purchases in your online store instead of on its platform.
- The game’s rules are not set by you but by the Marketplace.
- Let’s say that when you sell in a Marketplace and continue with a soccer simile, you are “playing away from home,” so the Marketplace sets the conditions and can do nothing but accept them and adapt to them. Therefore, the Marketplace may modify these rules without prior notice (increases commissions, requires a fixed payment for sale in some category, blocks your account, penalties, etc.). Although there are mechanisms generally to be able to protest, etc., you are bound by its conditions.
- Treasury tensions.
It is something that marketplaces play with. When you make a sale within one of them, the customer’s payment is not received by you but by the Marketplace, which will, in turn, make a payment after a time that will depend on each platform but is usually quite long. In this way, the Marketplace manages the money from your sales during that time, and you do not have it available until the deadline has passed.
- Competition from the Marketplace itself.
Indeed it is something you have heard “Beware of Amazon that makes you complete with its brand.” Well, it’s true; Amazon, for example, has more than 80 own brands (although not all of them are sold in Spain) so that, if a product sells well and has a good margin, it markets it directly under its brand, something that for it implies that it is almost impossible to be above them, losing sales dramatically.
Also Read: Selling On Marketplaces: Advantages.