How to Use an Online Marketplace

By October 12, 2020Blog
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Whether you already have an established brick-and-mortar shop or want to expand on the potential for eCommerce sales, online marketplace businesses offer additional revenue streams. Using online marketplaces lets you reach a larger customer base and find buyers throughout the world. The key is finding out which options work for your items and business model. While it may seem prudent to post your items in as many places as possible, doing so may not increase your bottom line and could cost your more in the long term. Online selling platforms offer varying benefits and appeal to different consumers. Making sure you understand your options and how they relate to your products helps increase your chances of success in the eCommerce industry.

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Creating Your Online Marketplace Business

Newegg site

The first step in creating your online marketplace business is understanding the options available to you. The sheer number of online platforms may seem daunting, but in reality that makes your decisions easier. Major marketplaces like Amazon give you an opportunity to find customers where they shop. Amazon sees over hundreds of million shoppers each month. The platform offers everything from food and clothing to electronics and niche items, which makes it a good choice for most sellers. The sheer size of the company helps buyers find competitive prices on millions of items, and this gives you a unique opportunity if you sell popular or niche products. Just make sure that you can provide your products at competitive prices that still help you increase revenue.

For those who sell new and used items, eBay is another online marketplace business that helps brands expand. Their auction sales method helps you find out just how much consumers are willing to spend on a particular item, and those numbers can increase quickly when selling unique products. The platform also offers Buy It Now services, which let consumers choose their products and pay preset amounts. Sellers have access to the Seller Hub, which lets you create your own online shop without creating a website. This hub lets you quickly see which of your products are selling, your overall performance and how long you take for shipping after sales. There are different seller plans available, including standard options that only charge a fee when you sell. This lets you gauge your selling practices and the potential for a larger online marketplace business in the future.

For businesses specializing in vintage or handmade items, Etsy offers a platform designed for smaller sellers. Consumers shopping on Etsy look for unique items that may not be available elsewhere, and this works well for niche items. Etsy lists products by seller names, which gives your business and brand more exposure. The site also lets you create a custom storefront for those using an online marketplace rather than their own website. These online stores help you gain recognition and develop a customer base as you grow.

For tech enthusiasts, the Newegg online marketplace provides a significant customer base looking for technology-based items. The company offers a variety of options for sellers, including commission-based costs so you only pay based on the items you sell. Like Amazon and other major marketplaces, Newegg also offers in-house fulfillment that reduces the amount of items you have to store and ship on your own. Smaller businesses without access to large storage spaces benefit from these types of online ordering systems since they do not have to hire shipping and receiving personnel, or take the time to ship products.

There are numerous other online marketplace platforms that help you build your business. Some pair with social media sites for an expanded customer reach. Consider global options for selling products in China and other areas outside of the United States. There are also platforms like Jet that provide a space for online marketplace businesses specializing in bulk sales and that want to keep costs low. Consider the options available and how they relate to your products and business model for an optimal fit that helps generate sales without high overhead.

Determine How You Want to Sell

Using an online marketplace consists of much more than simply selling an item. One of the main aspects of creating your online business is determining whether you want to act as a first or third-party seller. First-party sellers fill purchase orders from retailers, supplying them with your products to sell. In this business model, you allow the retailer to set your prices on their sites. First-party selling works well for larger companies, but can make it difficult for small businesses to build their brand and a solid customer base. With this option, you send invoices to the retailers for items purchased and receive payment before the products sell. The retailer also handles all listings and shipments, making your store simpler to run.

Another option for an online marketplace business is third-party selling, which requires you to be the retailer. You set your product pricing and handle all aspects of shipping and customer support. You have full control over your products, including what you offer and their presentation to buyers. However, third-party selling also requires you to pay fees for listings and sales. Most small businesses and those that create their own products find that third-party sales works well when first starting out in eCommerce. This option helps you build your brand, which also helps with customer loyalty and recognition.

Utilizing Online Ordering Systems

If you specialize in foods, baked goods or even want to start a restaurant, online ordering systems help you reach a varied customer base. These specialized platforms let you prepare foods for delivery through third-parties or your own staff. Food delivery reduces the need for customers to visit an establishment, which helps you cut the costs associated with running a restaurant business. Offering takeout and delivery-only options lets you operate out of a smaller space and reduce the need for wait staff. There platforms that offer options for selling fresh goods through an online marketplace business, helping you create your own brand and customer base.

Choosing an eCommerce Marketplace

Understanding your options for eCommerce helps you build a business using an online marketplace. With the variety of options available, there are different platforms that cater to specific types of items. Doing your research and comparing marketplaces lets you choose the platforms that work well for your products, brand and store. Considering your niche and customer base helps you find the proper channels for business growth and increased revenue.