Secrets of Marketplaces.

4 questions and answers

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1. Who needs marketplaces and why?

Any market place is, first of all, a universal and effective display that promotes and sells your goods online!

Who needs them, well, except for their owners?

Marketplaces are the fastest, easiest and cheapest entry to the market for a supplier today! Well, and quite an easy way out, if needed…

If you have a niche product with a relatively small volume and/or short life cycle, then the market place is 100% your tool!

If you are just starting something big and ambitious and want to try the market, then the market place is what you need.

In all other cases, marketplaces can be one of the tools of market presence, but you definitely shouldn’t dwell on them! This is an expensive tool and not as easy to use as it seems at first glance!

2. Is the right choice of marketplace a guarantee of sales?  

Of course not! Choosing the right marketplace is a prerequisite for sales, but, unfortunately, not enough at all!

For sales on the marketplace, two more things are needed besides the choice. The first is an efficient order fulfillment mechanism when you receive it: a call center that will call to confirm your order; a warehouse that will pack it quickly and correctly, a courier who will deliver it. All this must be ensured efficiently and efficiently. The second is the right content, properly structured for this market place; this delicate and professional work and customization, it requires knowledge and skills to work not in principle, but with this specific marketplace.

3. What are the actual costs of working with the marketplace?

Market place is expensive!

When working with marketplaces, there is a very large block of costs that are simply there, and they do not depend on your turnover! Therefore, in the end, the relative costs very much depend on your actual sales on the market place! If you go there yourself, remember this and do not be intimidated by this! Especially in the beginning!

The main costs, of course, are the market place commission, which can be different for different product groups and ranges from 10 to 25% of the sale.

Logistics, according to our experience, will cost you up to 5% of sales.

Warehouse, content and customer interaction costs – these costs are not very dependent on sales – so to speak, a block of fixed costs!

According to our experience, the costs of working with the marketplace, taking into account the commission of the marketplace, are at least 30%, and on average 35% of sales, at the beginning they can reach 50-70% of sales!

It is profitable to join your efforts with the same as you – it will definitely be cheaper and calmer!

4. I want my own market place! Is it worth doing this?

This is a very good question! As we can see, many are haunted by the successes of Amazon and some other companies!

According to many analysts, the marketplace model in its pure form is a kind of model of a certain transition period, and it is not very viable in the long and medium term! In fact, for many reasons. Monopolization is one of them! Online sales technologies are still too new and in development – it is difficult for everyone with them, and therefore we all try to push on one trading platform, which is called the marketplace. But sooner or later we will sort it out with you and it will simply become cramped for all of us there.

It is on the basis of these estimates that Amazon, yes, and not only, is actively developing other areas.

Nobody knows what will happen, but we usually do not recommend our partners to invest in a simple new marketplace!

 Good luck and success to everyone in the new reality!

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