Online Marketplaces are some of the best marketing and sales channels any business owner must use as they are relatively easy and inexpensive to implement, they offer a great way to get better visibility for your products and brand and, they also provide extra revenue streams.
What is an eCommerce Marketplace?
Marketplaces are eCommerce websites where multiple vendors sell the same products. Vendors pay the marketplace a commission from the sales revenue and the marketplace offers the platform to sell the products on, handles the checkout and the fraud screening process.
The Importance of Being Active on Marketplaces
Over and over again we speak to businesses that think selling on marketplaces is just a lot of work for some extra sales. It’s important to have a correct understanding of what selling on marketplaces implies.
Ease of implementation
Marketplaces make the listing process as simple as possible for non-tech-savvy sellers to be able to get started right away. You usually have setup wizards and clear instructions of what you need to set up your account and list products. You do not require additional cost or the need to involve developers, the only cost will be your time spent, reading and following the instructions.
Increasing awareness and growing traffic on your website
Listing products on marketplaces will push traffic to your website as customers often look into the seller they’re buying from for various reasons (finding a better price, buying complementary products in one big order, etc).
Getting more sales
Marketplaces sell. There is no question about that. Having multiple revenue streams is important. Any business should always find and test new sales channels, revisit older tests and continuously improve sales across the board.
Common Misconceptions About Selling on Marketplaces
There are a lot of misconceptions that are stopping businesses from selling on marketplaces that need to be cleared up.
Pricing and profitability
“If I’m gonna pay the marketplace fee I’m eating into my profit margin”
Paying marketplaces their commission is part of the agreement and it’s usually a hefty percentage of the sale (the average is around 15%), but it’s not like on your site you get 100% of the sale. You need to take into account the website management and maintenance costs, digital advertising costs (Email Marketing, CPC, influencer fees), payment processing fees, etc.
It’s difficult to get started
“I need to have experience with that marketplace to be able to sell on it.”
No, you need to have experience with any marketplace if you want to grow and get more and more sales on any sales channel. Marketplaces make it as easy as possible for sellers to get started with step-by-step guides from account creation, to listing products, and finally to processing orders.
It’s cumbersome to maintain the account
“I’ll have to make backend changes to our current structure in order to sync inventory and orders”
You don’t need to do that from the very beginning. Setting up an account, listing a few products that you have plenty in stock, and just getting started, won’t require any of the above. Furthermore, most eCommerce Marketplaces and CMSes (Magento, Shopify, BigCommerce, WooCommerce, etc) have built-in integrations or 3rd party providers that will allow you to seamlessly sync your catalog streamline marketplace order processing.
Marketplace customers are demanding and difficult to work with
“I’m going to get a lot of returns and problem customers because marketplaces side with them instead of the sellers”
It is true! Marketplaces will always side with their customers and force the business to please them and resolve any issues. This is a GREAT opportunity, not a problem. Your end goal is to grow your business. The best way to do that is by having more happy customers. Pleasing marketplace customers will be a fantastic learning experience for your customer support team and they will use that to provide even better support to the website customers.
Not enough inventory to sell on other channels
“I sell through my inventory in-store and/or on my website. I don’t have enough inventory to expand to marketplaces too.”
In this case, you need to congratulate your purchasing manager for buying the right stuff, but you also need to talk to your Sales manager for not pushing for more inventory and sales. There’s no such thing as, not enough inventory! Buy more inventory, and get more sales! It’s a numbers game.
Too much work that I cannot take on.
“It’s hard enough to run my business as is. I don’t have the bandwidth to expand”
Businesses always have bottlenecks. It’s up to the management team to constantly search for them and clear them up. Free up some of your time and/or staff and invest in expanding your business. This should be among your top priorities for each month. If you don’t expand and innovate, your business will stop growing. When a business stops growing it is losing market share and without any doubt, sales will start to go down.
Top Marketplaces You Need To Try Out
There are literally thousands of marketplaces in the world and selling on all of them is just not going to be manageable or a good investment of your time. The right approach is to always look for the main players in your market and to test them out. I’ve compiled a list below that should serve as a guide in helping you to prioritize your efforts.
|Etsy||Arts, Crafts & Gifts||391.8M|
|Walmart||General||410.3 Million||USA, Canada|
|Wayfair||Housewares||179.1M||USA, Canada, Europe|
|Barnes & Noble||Books||22.5M||USA|
|Wayfair||Housewares||179.1M||USA, Canada, Europe|
|Trade Me||General||18.2M||New Zealand|
Estimated monthly visits for April 2021, from SimilarWeb. Traffic to different domains for the same marketplace (e.g. amazon.com, amazon.co.uk, amazon.de etc.) has been combined.
The Right Approach to Marketplace Expansion
Step 1. Create an account and start testing the marketplace
This will often require a series of documents about your business and it will require some time for approval. Once you have your account set up list your best-selling products. The more products you list, the better but be sure you understand how to keep inventory in check (bulk exports, bulk imports often work best and are readily available on most marketplaces).
What to take into account while testing
- Marketplace sales. Are you getting any sales for your products? Is there fierce competition for them? Do you need to adjust prices or list new products? Take your time and work with different products.
- Website traffic. As long as there is a way for a marketplace customer to identify your website (seller name, seller description, product description), some are going to go to your site. Analyze your Google Analytics traffic reports and look for changes in Direct Traffic and Organic Traffic (from relevant keywords that are present in that marketplace, i.e. seller name)
- Step 2. Inventory and orders sync
If you are seeing some results you will need to list more products. Keeping inventory updated and processing orders from multiple platforms will soon be unmanageable and you should link all your sales channels together. This can be done in one of two ways.
- Multichannel Retail Software Solutions (3rd Party SaaS): ChannelAdvisor, SellerCloud, SellerActive, etc. These services typically act as your Master of Inventory, Price, and Order Fulfilment. Take ChannelAdvisor for example. You can connect it to your Shopify or Magento website, to numerous marketplaces, and even to bookkeeping and shipping software. All your products and orders live in ChannelAdvisor.
- Stand-alone integrations, apps, and extensions. Most e-commerce website platforms come with a large ecosystem of apps and extensions that allow you to connect your website to marketplaces. In this case, your e-commerce store becomes the Master of Inventory, Price, and Order Fulfilment.
Marketplace integration solutions for the most popular eCommerce platforms:
- Magento: M2EPro (Amazon, Walmart, eBay), CedCommerce (Etsy, Fruugo, Cdiscount, Rakuten, Overstock, Sears, etc), other extensions
- Shopify and BigCommerce: Built-in (Amazon, Walmart, eBay), apps for other marketplaces.
- WooCommerce – plugins for direct integration with marketplaces or SaaS solutions
Expanding Your Business to Walmart.com Today
For us, selling on Walmart is absolutely mandatory for every eCommerce business out there, especially if it’s already present on Amazon, and/or eBay. For a lot of our clients, Walmart is generating more sales and traffic than Amazon even. Why?
- Sales: Competition on Amazon is fierce, however, Walmart has far fewer sellers and restrictions and a loyal base that looks for the right products and the right price
- Website traffic: Walmart customers tend to be more budget wary and they will try to find the seller’s website in order to get the best price. This means more traffic going back to your store.
How to Start Selling on Walmart
Setting up your Walmart Seller Account should take under an hour in total. The below guide structure applies to most marketplaces you would like to sell on.
The first step is for you to go to https://marketplace-apply.walmart.com/apply and start the application process which normally takes 10-15 minutes.
You need to have the following handy for a seamless process:
- US Business Tax ID
- W9 or W8, and the EIN Verification Letter from the Department of Treasury
- US Business Address
Once your application is approved (up to 10 business days) you will need to register as a seller, and complete your profile (verify the bank account, set up shipping, customer support policies), upload products, and launch your account.
Uploading products to Walmart
You can add new products to Walmart in several ways:
- Single Item Setup – Create an item directly from the Walmart admin
- Bulk Import – using the Walmart Full Item Spec spreadsheet
- API – Using 3rd party service providers that integrate with Walmart and your Inventory Management System
Even if you do have someone on your team with experience in bulk importing products to marketplaces you should create a few items directly from the Walmart admin manually. This will help you to get accustomed to the terminology, the product requirements, the importance of various product attributes, and the overall process.
Once you are familiar with the single item setup process you can go ahead and bulk list more products to learn this process as well.
Make sure to add an Annotation to your Google Analytics dashboard when your account is live so you can easily analyze traffic changes to your website.
Get the most out of your Walmart Seller Account
Once you are ready to grow sales using this new sales Channel you need to find ways to leverage every advantage you have.
- Secure your account health – sooner or later you will need to automate inventory and order updates with your master system. This will limit the number of orders you need to cancel due to products being out of stock and it will simplify listing new products, keeping inventory updated, and processing orders.
- List more products – with marketplaces it is ALWAYS a numbers game. More products listed = more sales.
- Build your strategy – whether you want to list all your products, clearance items, or that old batch of products you still have from years ago, use the Walmart account as a way to get more sales, profits, and overall growth. Some sellers won’t want to list some of their best-selling items as the website is usually selling out without any help, to them, we normally say buy more and sell more!