Gone are the days when the default mode for shopping involved driving to a store, walking down the aisle, dropping your products in a cart, and taking it to the checkout.
Today, you can do this from the comfort of your home while clicking on your computer or tapping away on your smartphone. The ease of this is no doubt one of the reasons why 79% of Americans make their purchases online1.
Most of this online shopping is done via online marketplaces like Alibaba.com. In this article, we’ll discuss all you need to know about online marketplaces, including strategies for ensuring that you’re successful while selling via them.
Table of Contents
An online marketplace is a website that allows buyers and third-party sellers to carry out transactions on the platform. This is a bit different from an online store which usually sells products owned by just one business.
There are different types of online marketplaces. They include:
Vertical Marketplaces: This is a marketplace that brings together buyers and sellers of one kind/niche of goods. This focus on one specific product type makes it possible for the marketplace to offer features unique to that type of product. For instance, a jewelry marketplace connecting buyers and sellers can be a verifier of authentic jewelry.
Horizontal Marketplaces: These online marketplaces bring buyers and sellers of multiple goods. However, all these goods have a similar theme. An example of this could be a marketplace that sells handcrafted goods.
Global Marketplaces: A global marketplace sells all kinds of goods in as many niches as possible. An excellent example of a global marketplace is Alibaba.com, which makes it possible for B2B buyers and sellers to exchange goods worldwide.
B2B Marketplaces: These marketplaces have businesses on both ends of the sales process. Businesses sell products to other businesses. It is usually for bulk orders and allows buyers to get more customizations when making their purchases.
B2C Marketplaces: This marketplace has businesses as sellers on the platform and ordinary individuals as buyers. The company running the online marketplace could also directly sell products to buyers. Compared to B2B marketplaces, orders on B2C marketplaces are usually in smaller units.
While you don’t need to be on an online marketplace to participate in eCommerce, you should consider setting yourself up on one. The following are reasons why you should:
If you’re new to eCommerce, you should start with an online marketplace. It is easier to set up compared to setting up your online store. You don’t have to worry about designing your website, tools to integrate, and getting traffic to your store. In an online marketplace, you just have to sign up, get approved, set up your page, and start selling. This is ideal if you want to sell your products as soon as possible.
Even if you already have your online store, a marketplace makes it easier to put new items for sale quickly. Doing this can get customer attention to your products before getting traffic to your store.
Ignoring an online marketplace is akin to trying to reinvent the wheel. You’ll have to find ways to attract traffic to your store if you have one. Instead of putting up with that, you can use a marketplace like Alibaba.com, which has about 925 million monthly active users as of Q1 20212.
Major online marketplaces have built up a stellar reputation over time. Most shoppers already know and trust them. You can piggyback off this trust by selling your goods through the marketplace. Users who aren’t familiar with your brand would be more likely to buy your product from a marketplace than from your website because they don’t know about your reputation.
As they make their first purchase through the marketplace, you can introduce them to your brand, thereby converting them to loyal customers.
Most online marketplaces have support programs and tools to make the sale of your products seamless. For instance, Alibaba.com has advertising, analytics, and customization tools that you can utilize to boost sales. You can even discuss one-on-one with an Alibaba consultant if you need more guidance on making the best of the platform.
An online marketplace can significantly help if you’re trying to expand internationally. Big marketplaces already have buyers from all over the world. So, by selling on these platforms, you can get access to these markets.
Using a marketplace can also help with things like the time difference between you and your international buyer. The marketplace has tools and personnel in place round the clock. So, you can always serve your buyer even if you’re from different time zones.
While using a marketplace has made the customer acquisition process easier, there are still some things you must do to ensure you get the best out of an online marketplace.
Here are seven things you should do to ensure success in an online marketplace:
You might be tempted to think there isn’t much room for branding since you’re on another platform. Nothing could be further from the truth. You have a lot of opportunities to make your brand stand out.
When writing the copy for your product, you should let your brand voice shine through. You can also instill your brand’s presence in the product pictures you take. Personalization also helps in differentiating your brand. For example, you can include your business card, a promo code, or even a note addressed to the customer in the package.
You should pay attention to the copy on the product page for your goods on the online marketplace. Good copy is usually the difference between a buyer viewing your product and making a purchase. You should also pay attention to things like SEO when writing your copy. This way, your products would be visible on search engines.
A marketplace is an aggregation of different third-party sellers. This means that buyers have many options to choose from when buying a product. To utilize this in your favor, you should be flexible in your pricing on the marketplace. A difference of a few cents in the pricing of your products could determine whether you make a sale or not.
If you’re just joining a marketplace, trying to get sales in a crowded market segment might be an uphill task. This is especially if you haven’t garnered many reviews from past buyers. To counteract this, you should start from a small niche where there isn’t a lot of competition.
Your success in this small niche can help garner reviews and buyer activity. You can then utilize this to break into more crowded market segments.
Similar to the previous step, you should initially target your sales to a local customer base. After this, you can advance to different regions one step at a time. Finally, when expanding to a different location, pay attention to localization. This involves tailoring your products and copy to local circumstances in your target market.
About 96% of shoppers say they expect free shipping when they purchase goods online3. In addition, about 26% of buyers say they would abandon their shopping cart if the shipping time is too slow4.
Order fulfillment and shipping are very important aspects of the online shopping experience. This is the final lap where the products get into the hands of the buyer. You should ensure that this stage of the sale funnel is seamless because your buyers wouldn’t expect less.
Finally, you should let your existing customers know they can now get your products on their favorite marketplace. You can do this through an email broadcast, a social media post, or even put a banner on your website.
Online marketplaces are here to stay and are the future of eCommerce. In 2020, consumers spent about $2.6 trillion on marketplaces5. This is projected to be $3.4 trillion by 20246. So essentially, activity on online marketplaces is expected to increase over time.
The following are some trends to note in the future development of online marketplaces.
Voice search allows buyers to interact with their devices without touching them. By speaking to their device, users can interact with the internet while doing other things. The world of online marketplaces will not be left out of this new trend. Currently, about 72% of shoppers say they use voice search7. With recent advances in voice recognition tools, the use of voice search in eCommerce will only increase.
The Augmented Reality (AR) industry has seen tremendous growth in recent years. It is predicted to be worth $198 billion by 2025, up from the $3.5 billion it was worth in 20178. With AR, shoppers can directly interact with online marketplaces.
For instance, with AR, shoppers can have an avatar of themselves test out a cloth to see if it fits them. This solves one of the main issues holding back eCommerce in the clothing industry.
Over time, we can expect more exciting ways to utilize this technology in online marketplaces.
The resale of used products will be a significant part of the future of online marketplaces. Recommerce is predicted to be 14% of the clothing, footwear, and apparel markets by 2024. In 2020, it was just 7% of this market segment — a 100% increase9.
New entrants into the world of online marketplaces would have a hard time upturning the incumbents, especially global online marketplaces. One strategy for gaining ground is to go vertical. This means that new entrants into the space are focusing on a specific niche to attract those users. As a result, we should expect to see more niched marketplaces in the future.
Creating a personal experience for users is a proven method for retaining their attention and engagement. It is no wonder that the dominant social media networks use algorithmic home feeds. With the advances in AI, Data, and Analytics, we can expect this customization to be more accurate.
With these technologies, shoppers would be shown goods they’re more likely to appreciate and purchase. These tools also make it possible to predict products users will like, even before they know it. These technologies already power platforms like Tiktok. There’s no reason why we shouldn’t expect the same to apply in online marketplaces.
If you’re interested in selling your products in an online marketplace, you should open a seller account on Alibaba.com. Alibaba.com is a global marketplace allowing B2B sellers to access buyers from around the globe.
In addition to having access to buyers worldwide, Alibaba.com has tools that make it easy for your business to thrive on its platform. For example, some tools make it possible for you to customize your storefront to reflect the uniqueness of your brand.
You get access to data and analytics that make monitoring how users interact with your products on the website easier. You also have access to advertising tools to make user outreach a seamless process for your business.
To top it all off, there’s a dedicated support team that would walk you through the entire process of setting up your store and getting access to potential buyers.
Reference:
1. https://www.pewresearch.org/internet/2016/12/19/online-shopping-and-purchasing-preferences/
2. https://capitalcounselor.com/alibaba-statistics/
3. https://www.emarketer.com/content/shoppers-increasingly-impatient-with-delivery
4. https://www.chainstoreage.com/operations/study-consumers-shipping-expectations-higher-ever/
5. https://www.webfx.com/marketplaces/glossary/what-is-an-online-marketplace/
6. https://www.forbes.com/sites/forbesbusinesscouncil/2021/02/22/the-prevalence-of-the-online-marketplace-model-and-its-impact-on-e-commerce/?sh=1820c51978fa
7. https://bloggingwizard.com/voice-search-statistics/
8. https://3dlook.me/content-hub/virtual-clothing-try-on/
9. https://www.forbes.com/sites/niallmurphy/2021/02/17/theres-a-quiet-revolution-underway-with-recommerce/?sh=7f8a8feb5bfc
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