Marketplaces are gaining momentum–fast. We are all familiar with the saying “go where your customers are.” These days, consumers are flocking to marketplaces like Amazon, eBay, Alibaba, Walmart, and Rakuten to do their shopping. In 2019, sales on marketplaces accounted for 58% of online sales worldwide, with sales of around $2.03 trillion. A decade or two ago, there were a handful of online marketplaces. Today? There are more than 150 stretched across the globe, with a list that keeps on growing.
Selling on a marketplace can help you build your brand, and multiply your profits. The options are extensive, but it’s important to realize that expanding into marketplaces can come with complexities. So make sure to do your homework: each marketplace has its own differences, rules, and audience.
In this piece, we’ll look at:
Marketplaces are online shopping platforms, similar to a virtual shopping mall. An online marketplace is a central platform with multiple sellers and buyers, where everything is housed under one umbrella and buyers can purchase items without leaving the site. When people buy online, there’s a good chance they will go to a marketplace to make their purchase.
If an omnichannel brand wants to be truly everywhere its customers are, part of selling omnichannel includes expanding through marketplaces–often globally.
The global reach of marketplaces can give you an opportunity to test and penetrate new international markets quickly and easily.
For a further breakdown of global ecommerce marketplaces, check out this list, which is organized by region, sales numbers, and top platforms.
Consider some additional perks of marketplaces:
- Organizations that sell on websites, marketplaces, mobile, social, and/or physical locations generate 190% more revenue and increased brand awareness than merchants who only sell through a single channel.
- Globally, more than 58% of ecommerce sales were made through online marketplaces in 2019. That number is forecasted to grow by 66% within five years.
Some other benefits of selling on marketplaces:
Gain access to millions of customers: Where do customers often go to start their shopping? Marketplaces. Listing your items on eBay, for example, gives you access to 171 million shoppers. Walmart sees 120 million monthly visitors and Amazon is home to more than 310 million active accounts of its own.
Visibility and brand awareness: Marketplaces can also help you access new audiences. One concern of brands is that people will buy their products on marketplaces instead of their own site. The fact is, that without visibility on the marketplace, you may not have gotten that customer in the first place. The next move could be to build a strong relationship with new customers and help transition them from a marketplace to your own website.
Gain trust: When you sell on a marketplace you are also the beneficiary of its marketing and brand-building. Consumers tend to trust marketplaces, which automatically helps your business have a built-in established level of trust.
Testing ground: Do you want to know what people are willing to spend on a product? Do you have a product surplus, or want to introduce a new product? Use a marketplace instead of your own store to test out what works and what doesn’t.
Go global: Most marketplaces operate internationally. When selling your products on a country-specific marketplace, you can expand your reach to other countries with minimal effort.
If you’d like to learn more about how to grow beyond borders, download The Global Ecommerce Playbook.
As tempting as it might be to list your products on every single marketplace, you should consider focusing only on platforms that are a good fit for your products. Each marketplace has its own nuances, rules, and audience. Some will take a commission on every sale. Others might charge you a listing fee. Either way, you’ll need to weigh the costs and benefits of getting access to a certain marketplace’s customers.
The most well-known online marketplace is likely Amazon, thanks to its powerful shipping and fulfillment abilities and consistent shopping experience. Amazon is also the world’s largest search engine. Incredibly, 54% of product searches take place on Amazon, compared to 46% who went to Google first.
We’ve all been there: just before buying something on a retailer’s website, we’ll pull out our phones and check the reviews on Amazon. If your products aren’t on Amazon, you are missing out on an immense opportunity for product discovery. Even worse: If you don’t create a listing for your brand on Amazon, a third-party seller with no affiliation could be selling your own products with a sky-high list price, and little incentive to provide strong customer service.
Amazon is the most-visited ecommerce marketplace, averaging more than 200 million unique visits every month. For reference, that’s about the entire population of Brazil.
One of the main reasons to sell on Amazon is next-level brand visibility. Many successful brands have launched on Amazon and have expanded from there. Selling on Amazon can help build a sales funnel of potential customers that could eventually shop on your own site. If properly rolled out, selling on Amazon can be considered a complement—not a competition—to your direct-to-consumer website.
Some companies are reluctant to use Amazon, often due to its fees: on average, a 15% fee on every sale (but can be 8–20%). But Amazon can help companies rank higher in Google searches and businesses sometimes outsource the packing and mailing to Amazon.
If you install and connect your Amazon channel with your Shopify store, you can:
- Create new listings under-supported product categories
- Link existing Amazon listings with products in Shopify
- Sync inventory tracked by Shopify with Amazon.com listings
- Set unique price and reserve inventory just for Amazon.com listings
- Fulfill Amazon.com orders directly from Shopify
- Easily reconcile revenue from Amazon.com sales using Shopify reports
But in order to start selling with the Amazon sales channel, you’ll need to:
- Sell in USD or CAD in your Shopify store
- Sign up for an Amazon Seller Central account
- Generate UPCs for all of your products
- Not be using Fulfillment by Amazon
eBay isn’t merely an online auction house for used items. Eight out of 10 products listed on eBay are actually new.
Selling on eBay puts your merchandise in front of millions of active buyers all shopping in one place–from one catalog. It can help grow your brand footprint on eBay’s global marketplaces.
Selling on eBay has a number of benefits: it’s the third most popular marketplace in the US, and shoppers don’t need to find your unique store to buy your products—they just need to find your listings. eBay is also a favorite for sellers because it’s so easy to get started and has a number of different shipping methods, including the Global Shipping Program.
On eBay, it’s important to position yourself competitively on price. Because eBay’s marketplace is so large, many sellers offer the same product across a range of prices. Selection, shipping costs, and sale terms are also important but a competitive price is still the most important factor.
Find more information on how to use this channel in the guide to selling on eBay.
Walmart is the second-largest online retailer in the US, with around 110 million unique visitors each month.
Yearly online sales range from $13-$15 billion. It currently allows third-party sellers in 35+ product categories to sell their products on its marketplace. You don’t have to be based in the U.S. to sell on the Walmart marketplace with 5% of their current sellers based outside of the US.
Rakuten is often referred to as “the Amazon of Japan,” though it has a number of regional marketplaces including Japan, the U.S., the U.K., France, and Germany. Rakuten’s annual sales hit US$31.7 billion as of June 2019. Their customer base is made up of 1.3 billion members, and products range from electronics, and fashion to pet supplies.
In order to sell on Rakuten, merchants must apply and be approved before they can start selling on the platform. Brands can customize storefronts, which can help create your own brand identity on the platform and attract customers. And unlike Amazon, Rakuten will work with your brand to remove any counterfeits of your products with intellectual property rights, giving you more control of your brand perception overseas.
U.S.- and Japan-based brands can use Shopify’s Rakuten Ichiba app to start selling in Japan while easily translating and managing everything within Shopify.
Make sure to do your homework to see if creating an Amazon store lines up with your business goals. Consider the following:
- See if your competitors have Amazon stores and research other brands’ stores
- Meet with your team and determine how many resources you will need
- Estimate how much time is needed to set up and maintain the store
- Evaluate whether you have the expertise to optimize this content for user experience and discoverability in-house, or if you’ll need an agency partner
Before you can create Amazon Store content, you’ll need to register your brand using Amazon’s Brand Registry.
Once your brand is registered, you can set up your first Amazon Store. Select your theme and start to build out your pages much in the same way as you would your own website; making sure that the navigation is simple enough for customers to easily find what they’re looking for.
After that, it’s time to submit for Amazon’s review.
It’s also important to optimize your product listings. In fact, 70% of Amazon customers never click past the first page of search results. The six key parts to optimizing a product listing include the product title, description, image, rating, features, and reviews.
Don’t forget about shipping. There are 3 fulfillment options to choose from when working with Amazon: Fulfillment by Amazon (FBA), Seller Fulfilled Prime (SFP), and Merchant Fulfilled Network (MFN).
Having an eBay Store gets you access to useful tools to help distinguish your products from the competition. An eBay store also allows you to have:
- Lower selling fees
- Increased visibility in search results and improved search engine optimization (SEO)
- Discounts on eBay-branded shipping supplies
- Control over your own branded store pages
- Enhanced mobile web experience
When creating your eBay store, it’s important to have a look and feel that is consistent between your eBay store, your individual product listings, and your ecommerce website.
An eBay store has 10 elements to edit, which include: A billboard image, store logo, and description, featured items, categories, featured items, search box, newsletter sign-up, follow and sharing buttons as well as adding larger photos (good for mobile).
It’s also important to optimize your product listings and have this type of information on your first page, such as:
- Full and accurate descriptions of your product,
- Shipping and handling costs and timing,
- The return process and warranty information,
- Accurate information about the location you’re shipping from.
When it comes to shipping methods, eBay offers a Global Shipping Program (GSP). GSP handles close to everything: arranging international shipping, completing customs forms, and handling import fees, which are paid by buyers at the time of purchase.
Walmart is one of the fastest-growing marketplaces and continues to roll out features that make it easier for sellers and brands to reach Walmart’s enormous customer base. According to eMarketer, a whopping 26% of all U.S. shoppers planned to use Walmart for shopping during the 2019 holiday season.
- Selling on Walmart marketplace becomes all the more essential when you consider that 57% of Amazon shoppers shop on Walmart. Thus, a presence on both sites will give you a greater chance of capturing the same buyer.
- Walmart now has six ecommerce distribution centers that when combined with in-store pickup/ship from store services for online orders can meet 2-day delivery expectations
- Most downloaded app on Black Friday 2019
- Over 110 million shoppers per month use Walmart
Recently, it was announced that you can now connect your Shopify store with Walmart.com’s Marketplace website, if approved. The app will allow you to upload your product catalog and create listings, sync inventory as well as import order details for fulfillment with Shopify. This is only available for brands that are based in the U.S. at this time.
To start selling as an approved Walmart seller, you will need to go through a five-step approval process, which includes an application, contract, registration, onboarding, and a final review.
Rakuten is slightly different from the marketplaces we have already outlined. Rakuten doesn’t allow luxury fashion brands, animal products, or subscription products to be sold on the platform. Rakuten allows you to customize your own merchant storefront which helps create your own brand identity on the platform and attract customers.
Another way to find new sales channels and expand your market is the ability for merchants in the U.S. and Japan to connect your Shopify store with Rakuten Ichiba through the Shopify admin panel. The new Rakuten Ichiba app means you can register products, manage inventory and orders for stores on Rakuten Ichiba.
These days marketplaces are almost a must, not a miss. The list of online marketplaces across the globe continues to grow and their momentum continues.
A key factor will be making the decision on which marketplace is the right fit for your brand. We have outlined some of the many benefits (and complexities) to selling on a marketplace. Above all else, it’s crucial that you spend time and effort researching what option might be the right fit with your business model.
This article originally appeared in the Shopify Plus blog and has been published here with permission.