Imagine this. You need something, but you aren’t necessarily sure what brand of the product to choose, or whether it is any good or not before you part with your hard-earned cash. You may not even be sure where you could buy this product in real life. What do you do? Well, a growing percentage of us will have a look online to try and track the product down. Whether it is a small purchase worth just a few dollars, or something much more expensive, many of us carry out research into the products that we buy before we commit to the purchase. Is the coat that we are looking at online warm enough? Are there any pockets? Is it true to size? What about the acne cream that we want to buy? Which brand has the best reviews? There is no getting away from the fact that online information enables us to learn everything we need to about a potential purchase without even leaving the comfort of our chair.
When we aren’t sure exactly which brand to choose, or we want to compare different products, many of us turn to online marketplaces. Online marketplaces have been referred to as web-based department stores, offering a huge range of different products by an assortment of third parties, and where all transactions are processed by the marketplace operator. And since they offer such convenience to customers, the number of online marketplaces has increased dramatically with online marketplaces are becoming increasingly more important, particularly since studies show that more shoppers than ever are now beginning their online research with their favorite marketplace.
Types of online marketplace
There are actually several different types of online marketplace. These are vertical, horizontal and global. Here’s what you need to know about what each type means.
Vertical marketplaces sell products from a variety of third parties, but they are all of one type. For example, TrueFacet.com only sells jewelry and related products.
Horizontal marketplaces sell products of many different types, but they all share a characteristic. For example, Dote.com enables women to shop at multiple retailers simultaneously by viewing all products from all retailers at the same time.
Global marketplaces sell absolutely everything you can imagine. The most obvious examples of global marketplaces are Amazon and eBay. These are two of the most popular marketplaces and at any time can have over 1 billion items for sale.
Why retailers should be selling using online marketplaces
In addition to offering consumers a mountain of valuable information about the products that they are considering purchasing, there are a variety of reasons why retailers should be taking their ecommerce onto online marketplaces, as well as selling via their own websites.
Marketplaces have unrivalled reach
Selling on your own personal webstore is obvious, but unless you are a very well-established business, actually getting plenty of customers to your online shop can be difficult. All of the pressure is on you to market your webstore, attract customers and retain them. Having a great POS can help you target your marketing efforts in the right direction. However, you are still unlikely to achieve the massive reach that marketplaces have.
Research shows that sales on marketplace sites such as those operated by Amazon, eBay and others accounted for more than 50% of global web sales in 2018. In fact, $1.66 trillion was spent globally on the top 100 online marketplaces in 2018, and that number is predicted to continue to rise over the coming decade as shoppers increasingly move towards internet shopping.
Marketplaces are established virtual shopping outlets with primarily positive reputations and that consumers are used to visiting, trusting and purchasing through. This makes them ideal to use to sell your products, since you are guaranteed to get a far greater reach and reach shoppers who may not otherwise come across your webstore.
Customer loyalty is something that every retailer aspires to achieve. One of the great things about marketplaces is that they tend to draw the same customers back over and over, particularly when they offer a subscription service as is the case with Amazon marketplace and their Prime subscription. Many shoppers will return to Amazon for as many of their online purchases as they can since many Prime products come with free and/or expedited delivery. Whilst there aren’t any opportunities for you to foster loyalty directly from your customers, if shoppers are happy with what they have purchased, they are likely to return to buy it in the same way again.
Ease of use also plays a big part of customer loyalty through marketplaces. Rather than having to sign up to multiple sites with their personal information such as their name and address information, the marketplace enables them to shop with a wide variety of different third-party sellers without all of them having access to these details. This offers a great deal of benefits including:
- Customers won’t get emails from dozens of different retailers
- All of their information can be stored on the account that they create, meaning that they can often purchase at the touch of a button without having to re-enter things like their address and contact number. Example: Amazon’s one-click ordering.
- The ability to track all of your orders on one platform, making re-ordering very simple.
Although there isn’t really the option for individual retailers to foster any direct customer loyalty, all of these benefits mean that provided their initial purchase was satisfactory, customers are likely to return to the marketplace to order through you again in the future.
International trade opportunities
How would you feel about expanding to trade overseas? One of the easiest ways to do this is by using a marketplace that has a global reach, meaning that your products are viewed and purchased by consumers around the world. With Amazon, you can access 12 global marketplaces, including the USA, UK, Germany, France, Canada, Japan, India, Italy, Spain, Mexico, Brazil and China. Amazon Australia and Singapore are also in the pipeline. One of the great things about using a marketplace for international trade is that the platform will largely do all of the legwork for you. This includes figuring out shipping rates and, if you choose for your platform to handle your shipping for you, then they will also take care of this aspect of the transaction. Before you know it, you could see your products in use around the globe.
Not all marketplaces do this, but Amazon offer a ‘Fulfilment by Amazon’ (FBA) service. Yes, this costs most than the standard fees you would incur for using the marketplace, but essentially you can allocate many of the responsibilities associated with running your retail business to Amazon to take care of on your behalf. Sellers that use Fulfilment by Amazon not only have Amazon hold their stock for them, but also handle their shipping, customer service and returns. In doing so, the products they are selling become Prime eligible which makes them even more attractive to customers. This is also great news in terms of sales since research shows that Prime subscribers spend twice as much as regular customers do each year.
Let your POS do the work for you
The great news is that some POS systems, such as Hike actually integrate with some marketplaces, making it easier than ever to get your products out there and stay in full control of your business.
Hike offers built-in seamless integration with Amazon that will give you complete management control of your product. Some of the key benefits of choosing Amazon Marketplace to integrate with your Hike POS include:
- Seamless control of which products you list on Amazon Marketplace
- Simple and fast registration of your products, requiring just a few clicks
- You can set your own rules for region, pricing and inventory, keeping you in full control of what and how much of each product is sold
- Your Amazon seller account will synchronize with Hike so that your marketplace inventory is always up to date
- Excellent data collection, helping you to understand all of your customers and their purchasing preferences, whether they buy direct or via Amazon Marketplace
- Complete visibility of your listings, customer profiles and inventory on your Hike dashboard
- Enjoy the opportunity to reach customers worldwide through this incredibly popular global marketplace
In addition to Amazon Marketplace, Hike also integrates with other ecommerce platforms including Shopify and BigCommerce.
If you would like more information about how Hike integrates with Amazon Marketplace, or you would like to start your free 14-day trial of Hike, please get in touch!