Marketplace Presence: A Necessary Evil For Online Sales

Everything changed when life – and business – went online. The online marketplace trend has grown beyond our wildest expectations.

Statista reported that 47 percent of digital purchases worldwide were made through online marketplace platforms.

So, for your growing business to thrive and stand out, you will need a marketplace presence in your eCommerce digital marketing plan.

What is an online marketplace?

In contrast to the conventional website, an online marketplace is a digital platform with a website and mobile app versions where several sellers and vendors offer product listings in exchange for marketplace fees. Marketplace owners usually do not have a warehouse to store inventory, but they charge commission fees for listing and selling on their platform.

Online marketplaces continue to provide buyers with a single, incredibly simple platform through which they can evaluate a wide range of products from a diverse array of verified sellers.

Few successful marketplaces in India

1. Amazon– It is India’s largest online marketplace, with over 78 percent of online shoppers trusting it. You can sell your products with unrivaled reach and it retails in a diverse range of products.
2. Flipkart-Flipkart was India’s first and, undoubtedly, most successful e-commerce platform. Flipkart started as a multi-vendor bookstore but now sells more or less anything.
3. Myntra– Myntra is yet another indigenous eCommerce marketplace that specializes in fashion, leisure, and home products and entails the widest range of brands and products on its portal.
4. Indiamart– Indiamart is the country’s largest business-to-business online marketplace, offering a platform for the distribution of goods and services. The founders’ goal was to simplify business. Indiamart gradually evolved into a community.
5. Bookmyshow– BookMyShow is the largest online ticket retailer in India. It is a one-stop-shop for booking entertainment and fan merchandise in India. Includes movies, events, plays, sports, activities, and tickets to landmarks.

Marketplaces benefit the new startups in a variety of ways. It is a way for the sellers to cut the costs of acquiring new customers, finding new customers, and making their management easier. Buyers see marketplaces as a reliable, neutral platform where they can find everything they need. They offer transparent reviews and good deals that entice them to make a purchase. Benefits for the customer are ultimately beneficial to the seller. After all, the more satisfied a customer is with their purchasing experience, the more likely they are to make another purchase. 

Let us take a closer look at the reasons why you should list your business on marketplaces to build your brand.

1. Provides excellent reach and visibility

Many shoppers use marketplaces as their primary search engine, and by doing so, you can expand your visibility globally. It’s a great opportunity for small business owners to make a lot of money without making any big investments.

Most online marketplaces are already well-known brands with a steady flow of quality traffic, so you won’t have to worry about bringing in new customers. Selling on these platforms can help you by bringing in your first customers.

2. Establishes a brand’s authenticity

Customers find it difficult to choose the best brand when new brands come to the fore on a regular basis. eCommerce monoliths such as Amazon, Flipkart, and eBay are big stars. People will rely on your products/services if you sell them under the umbrella of these brand names if you are just getting started. This gives your growing business instant authenticity and credibility in the eyes of buyers.

3. Marketplaces are Cost-effective

Because Marketplace has everything set up in one location, the retailer just has to make a few investments. Selling on a Marketplace is more cost-effective than selling on your eCommerce website for those who have just started.

Marketplaces such as Amazon, Flipkart, and others, charge a monthly subscription fee or a standard listing commission for each product listed in their Marketplace’s catalog.

4. Easy Management 

Marketplaces already have a team in place to control both front-end and back-end services. As a startup, you will not have to worry about customer service management or the layout of your product listing.

Many platforms also offer a provision that allows sellers to add their shipping methods or the sellers can use the marketplace’s shipping services. You just have to enter the data in accordance with the marketplace’s guidelines and begin selling without hesitation.

The digital marketplace can be a boon for those who have only recently planted the seed of their business, but it can also be a bane over time. We can’t deny that they can help you build your brand, but marketplace presence can also have an impact on your online sales for the reasons listed below.

1. Brings down your profit margins

Operational expenses such as listing fees, commissions on sales, account fees, and other expenses can chip off a significant portion of your profit.

Having your website, on the other hand, means you won’t have to pay any commissions or listing fees. The profit you make is completely yours.

2. Limited control

You do not have any control over how your products or services are marketed. You are only given a limited amount of space to upload your product catalog, and you must abide by their rules and terms. This may have ramifications on your digital marketing strategy.

3. Challenging to build own customer base

Suppose you started selling on marketplaces and have received a positive response. You’ve decided to open an e-commerce store. But, surprise!! Your website isn’t performing as well as it used to for your marketplace portal. This is because your customers are familiar with the marketplace, not your brand. It becomes an additional challenge to imprint your brand name in the minds of your customers with limited personalization.

4. Fierce price war

There are thousands of your niche businesses on these platforms, and you must carefully calculate the price while keeping your competitors and profit margins in mind.

When you have your own website, you have complete control over your products, branding strategies, promotions, pricing, and every other aspect of your firm. However, if you are new to the e-commerce world and have a limited budget, you should consider using marketplaces for the moment. Following that, it is strongly advised that you develop your e-commerce site.