Five Reasons Why Brands Should Sell on Online Marketplaces

Over the last few years marketplaces have exploded; not just as a convenient way to shop, but also as channel on which brands can list their products and gain a wealth of new customers.

Marketplace Growth

With the marketplace economy set to double from US$19 billion to US$40 billion in the next four years (Arcadier) and nearly 50% of all product searches beginning on Amazon, the future of ecommerce is looking towards marketplaces as an omnichannel shopping experience. Brands choosing not to list their products on them could be at risk of falling behind.

Consumers are more impatient than ever and as a result, they like to see all relevant options in one place. Multiple tabs drive us mad and too many open apps make our devices sluggish.

Now, searching “red dress” on Amazon, brings up results from numerous brands and retailers, meaning consumers can efficiently find the dress they like best without fuss or clutter.

This could explain the movement to marketplaces such as Amazon, Alibaba and eBay (Having recently rolled out their own Amazon-esque ‘Product Page’ offering) and why sales across them reached $1 trillion in 2016 (digitalcommerce360).


Making the Most of Your Listings

Another way retailers and brands can take further advantage of marketplaces is through product ads. Because they appear directly in front of consumers and can essentially override product listing algorithms, product visibility and sales can be increased if your bids are successful.

eBay’s Promoted Listings puts ads at the top of search results and is available to active eBay Stores subscribers on eBay US, UK, Germany and Australia. Advertisers can list up to 30% of their inventory, within the specified categories. Amazon has three different types of ads:

  • Amazon Sponsored Product Ads

    • Keyword targeted: choose from exact, broad match or phrase types. Set a daily budget and campaign duration.
  • Headline Search Ads

    • Keyword targeted and cost-per-click. These appear as headline banners and advertisers can promote three or more items together.
  • Amazon Product Display Ads

    • Interest or product targeted ads and are cost-per-click. Each campaign is limited to one target type. Appear to the right or bottom of search results as well as in Amazon Marketing emails.

The success and expansion of marketplaces is huge news for big and small retailers all over the world, but there remains discussion as to whether marketplaces are the best option for them.

A few of the anxieties being costs, competition and minimal fulfilment capacities, there are reasons to fully evaluate whether your business is ready. 


What does this mean for you?

For those who have the funds and the technical capability, marketplaces such as eBay and Amazon are now critical if you want to reach a huge database of consumers, boost product visibility and increase revenue.

By doing so, you could:

1. Increase the reach of your products

With the sheer number of consumers using marketplaces and the rate at which new ones are joining, your products are likely to reach a huge audience. Amazon Prime customers convert at 74%, which increases the likelihood of product discovery and purchase


2. Test entry into new markets before investing in full localised sites and services

eBay, for example, operates 23 international sites and has a presence in over 100 countries. Amazon operates 11 international sites and has a presence in over 180 countries. If you know what the most popular marketplaces are in the country you’d like to sell into, list into those!


3. Get ahead of the competition
It’s been shown that consumers, now more demanding and with shorter attention spans, are preferring of an omnichannel shopping experience. Your competitors have likely cottoned on to this already and by avoiding marketplaces, you're falling behind.


4. Gain new customers

Because of the reach marketplaces provide, new customers will see your products every day and return. In addition, some marketplaces offer features that are attractive to consumers such as Amazon Prime and eBay's new Guaranteed Delivery


5. Make life easier

Amazon’s FBA system removes the hassle of shipping and does it for you. Marketplaces usually handle currency conversion which takes the pressure off when you want to list into a new market.


With eBay alone having an audience of 170 million consumers (Raymond James Research) and Amazon attracting 85 million monthly visitors (bigcommerce), it is clear that marketplaces are a burgeoning channel and there's a lot to be gained for retailers listing into them.