Online Marketplace Myth Busters: Making Sense of Four Common Misconceptions

Table of Contents eBay or bust: There’s no in-betweenYou need to build a new siteOut…

Online marketplace technology is still relatively new and understanding how it works can help you determine whether it’s right for your business, writes Marketplacer’s Vice President of Sales, Richard Hankin.



Ask an Australian retailer if they’re pursuing an online marketplace strategy and very often they’ll assume you want to know whether their wares are available on eBay or Amazon.

However, in today’s e-commerce trading world, a marketplace strategy is when your business itself acts as a virtual storefront for dozens, hundreds or even thousands of third-party sellers. 

Online marketplace platforms are what make this operating model possible. Since 2019, they’ve accounted for the largest share of online purchases worldwide. The e-commerce boom sparked by the Covid pandemic has only enhanced their popularity, as locked down consumers have spent more time letting their fingers do the walking. 

Here in Australia, they’re helping dozens of early mover retailers like SurfStitch and Woolworths leverage the inventories and logistics capabilities of scores of trusted partners.

But confusion about what becoming an online marketplace proprietor entails makes some business leaders reluctant to explore the model. That’s a shame, given its potential to turbo-charge online sales – by as much as 50 percent in some cases – and boost bottom lines. 

Here are some misconceptions that commonly crop up when we talk about online marketplace strategy.

eBay or bust: There’s no in-between

Yes, eBay and Amazon are the world’s biggest and best known online marketplaces. No, adopting marketplace technology doesn’t mean you need to try to transform your business into a Bigger than Ben-Hur behemoth capable of taking them on. Your foray into the space may consist of a modest extension of your existing range, via complementary items or product categories, or an ambitious expansion strategy that ends with you owning your category. Your marketplace, your choice.

You need to build a new site

You’re already selling online and you don’t want to invest time and money to create a whole new marketplace website. Good news: you don’t have to. Marketplace platforms like Marketplacer are connected solutions, which allow you to plug third party products and SKUs into your existing e-commerce platform. It’s seamless and subtle: so much so that your customers may well not clock the fact they’re now buying from a marketplace, unless you choose to publicise the fact.

Out of control: It’s a free-for-all for sellers

Marketplace giants like eBay and Amazon may choose to allow (almost) all comers onto their platforms but you don’t have to. Your marketplace, your rules. As the owner of the site and the merchant of record – you own the customer, manage the order and take the payment – it’s entirely your choice which suppliers come on board and the products they can bring with them. In our experience, the most successful operators are those who curate their ranges carefully, and invest time and money on seller acquisition and success programs that ensure the partners they work with are committed to providing a customer experience the equal to their own.

They’re capital intensive to establish and operate

An online marketplace isn’t toe-in-the-water stuff. If you’re aiming for a 30 to 50 percent sales boost – not an unrealistic goal for enterprise retail customers – it’s optimistic to imagine that could be achieved without expending resources. Having said that, it’s unlikely you’ll need a dedicated team of dozens to make it work. For most retailers, it’s an initiative that should fit squarely into their existing e-commerce division. Extra hands will be required to manage seller acquisition and integration but you won’t need to beef up the body count significantly until business starts booming.

Positioning for prosperity post-Covid

Post-Covid, Australian consumers are more enamoured than ever with online shopping. Exploring the benefits of digital marketplace technology will help you decide whether incorporating it into your e-commerce strategy will serve your retail business well in 2022 and beyond.

The e-commerce landscape is changing. With a Power Retail Switched On membership, you get access to current e-commerce revenue and forecasting, traffic levels, average conversion rate, payment preferences and more!

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