As e-commerce continues to grow by the billions each and every year, a growing number of businesses are beginning to consider selling in an online marketplace. After all, e-commerce websites are mutually beneficial: the online store owner is able to increase the exposure of their product, and the online marketplace is able to expand its product range without taking on a load of inventory. But is this format right for your business? Below are the pros and cons of this style of selling to help you make the best choice for your company.
The Benefits of Selling on an Online Marketplace
With more people on Sites like Groupon shopping online each and every year, featuring your product on such a website can drastically increase your exposure to unique visitors. This means that not only is your product being seen by more people, but you will also enjoy higher sales volumes. Many sellers are shocked to find that they need to restock their inventory within a matter of days due to their sudden upswing in sales.
Increased Lead and Customer Acquisition
Several marketing gurus will tell you that lead and customer acquisition is far more difficult than making a sale. Having products within an online marketplace means that more people will be able to organically discover your product – no email marketing campaigns, landing pages, or online advertising required!
Borrowing a Brand’s Reputation
When you sign up with a well-known marketplace, you are piggybacking on their reputation and their brand recognition. Customers come to these shopping sites because they trust the particular online marketplace. You get to benefit from that positive reputation and are immediately associated with a trustworthy company that delivers top-quality goods.
Why an Online Marketplace May Not Be for You?
Listing your items with an online marketplace will undoubtedly result in the seller being charged fees. It is up to the seller to do his or her research and balance the pros and cons of paying these fees if they are affordable and if another site may be a better choice.
- Weigh the cost of online marketing versus marketplace fees
- Consider the fee amount versus how well the online marketplace is known (paying a higher fee to an established and well-known marketplace may be more worth your while than choosing a lower fee with a less known website)
- Understand your budget and how much you have to allocate to the marketplace
Inventory Management Issues
Marketplaces tend to be used as a secondary point of sale. Because of this, it can be difficult for sellers to keep their inventory in check at all times. This challenge can be overcome by investing in business inventory software that will aggregate all orders from numerous sources. Some of these programs will even keep your manufacturer or product provider in the loop so they can always be sure that the product is always available.