The online marketplace is not a new phenomenon; eBay and Amazon both made the business model famous in North America in 1994-1995, enabling thousands of micro-entrepreneurs to get online and sell to other customers over the internet. Since then, Asian marketplace websites such as Taobao (Mainland China), Rakuten (Japan), Lazada (South-East Asia) and many others have grown quickly, bringing buyers and sellers together in a simple to use Customer to Customer (C2C) marketplace format. Today we talk how to get started selling with online marketplaces.
Four Benefits of Selling with Online Marketplaces:
1. Fast Set Up
Want to get started selling your product this afternoon? Open a seller account on one of the above marketplaces and you could be shipping out your first orders within the day.
2. Cheap to Start
Don’t want lots of upfront overheads? Running a ‘shop-in-shop’ within a marketplace means all of the infrastructure is already in place; no need to spend thousands building your own site.
3. Sell to Their Traffic
Let them take care of the marketing; it’s the marketplace’s job to attract large volumes of quality traffic that will buy your products. It’s your job to source interesting, competitively priced items and take care of the logistics. By removing the marketing time and costs, you can focus on crafting the best offers, resulting in happy customers and a simplified business model.
4. Diversify your points of sale
Already selling on your own site, but want to expand? Why not try listing your product on a few marketplace sites and developing those sales channels? You’ll reach new, different customers, and can encourage them to visit your main site in future for broader offerings, loyalty discounts, and to keep in touch with your site’s online community.
Which Marketplace to Choose?
You may be overwhelmed with the number of options out there, and be wondering which marketplace you should get started on. Assuming you have your product already sourced, it’s time to do your research; start by searching each of the platforms for your product and see what the competition is like. Are there many similar products to yours listed? Can you beat the prices already offered by your competition? Is there a way to differentiate yourself versus the other sellers, say for example; super-fast shipping, or a unique offering? If you can’t compete, keep searching; perhaps you need to try a different platform, or find new products that you can win with.
Once you get familiar and setup on one marketplace, you’ll probably want to diversify your sales channels by listing your products on other C2C platforms. This will help you to reach different audiences in multiple countries, and maximise your chances of selling large volumes of product. Over time, you’ll begin to learn what works on each platform (promotions/free shipping/incentives etc), and your business will be more diversified across multiple channels.
Finally, be wary of competing purely on price as this can be a losing proposition in the long run. If your item is a commodity and freely available, there will generally always be someone willing to cut prices lower than you, resulting in nobody making money in the long term. Try to find a unique selling proposition that allows you to defend your margins and keep your business strong.