The answer to today’s question varies. Some people feel that marketplace commissions are prohibitively high. Others have seen their sales greatly increase through marketplaces and wouldn’t dream of going back. While some professionals and agencies take a stance for or against the use of marketplaces, online communities abstain from making general recommendations because each case differs—and with it the relative merit.
What about commissions?
Commissions are what oil the machine. Marketplace commissions can reach levels that may seem scandalously high, but let’s delve further into the question before making a judgement. Advertising campaigns and price comparison sites rely on the services of true professionals, whose job is to help you reach your targets and achieve a suitable return on your investment. Professional services come at a price. Sellers who do this work themselves often end up operating at a loss. So you start to ask yourself how you can sell your goods without advancing this kind of money. And that is when you understand that marketplaces are there to cover these costs—but will recover them through commissions.
Is it worth cutting into your profits?
Once the commission is taken, you sometimes—maybe often—find yourself making zero profit. You can’t have everything! Sure, you’re just breaking even, but you’re also not spending any money to get to the customer in the first place. By using a marketplace, you gradually build your portfolio of customers, at no cost. And that is the greatest, even the sole, advantage of using its services. A marketplace lets you sell your wares without shelling out to bring in customers, and this increases your volumes. That means business growth.
Are customer evaluations a pro or a con?
Marketplaces assess the overall performance of their sellers and rate them accordingly, relying partly on customer evaluations to do so. When your ratings soar, your sales follow. So you have to see evaluations as motivators that will help accelerate the growth of your business.
What other benefits can you expect to reap?
Once you’ve taken the plunge, made your first sales, mastered the routine, and had your first positive feedback, you can move beyond the hypothetical and actually grow your business. Use the marketplace’s indicators. They are marketing tools to further accelerate your sales. It is in your interest to let customers know that you are an eBay Power Seller or that your average seller rating on Amazon is 4.3/5. Furthermore, the fact that you are a professional vendor reassures potential customers. They will also understand that they can save money by buying directly from you, on your site.
How do you build customer loyalty?
Marketplace customers are fickle. Your job is to make sure they remember their purchase. Parcel preparation is one way to do this: add a “gift voucher” (essentially a discount code) and a branded gift, like a sticker, mouse pad, lighter, or pen). Your choices can reflect the items purchased. You should not provide the URL of your online store if this would violate the terms of the marketplace. Take full advantage of the parcel as a marketing medium: add your shop logo to the delivery label and paper invoice, and insert a flyer. The customer loyalty you build on marketplaces will boost your sales on your own site.
The big picture
By expanding your presence on marketplaces, your sales increase. And you can sell online to customers abroad without the need to invest there. This brings us to the earlier point that growth brings you more customers and builds loyalty, which you may then capitalize on. To sum up, marketplace sales accelerate your business without risky investments on your part.
In 2010, I drew on what I had learned as an online merchant between 2005 and 2008 to create Common-Services, which aims to develop simple tools for online sellers. I understood their needs from personal experience, and this helped us develop the right solutions for the most frequent problems. Our product ranges include logistics tools as well as modules for management of marketplace flows, including Amazon Marketplace for PrestaShop.