There’s a saying about products and brands on the internet and it goes something like this…if your brand or product isn’t online then it doesn’t exist. This has become even more true as the years have progressed, as the buying age of shoppers has widened, and as a new generation of wealth is up-and-coming. But where are these buyers shopping? More importantly, are your products displayed where they’re looking?
The history of online shopping is rich with change from how websites were built, who hosted them, search engine wars (I think we know who won that), to marketplaces allowing anyone to sell just about anything on a website they don’t even own. These marketplaces aren’t new and examples include Ebay, Amazon, Wayfair, Walmart, etc. They’ve made many millionaires over the years and have become a vital part of most brands and products’ online strategy in terms of marketing, brand awareness, and sales. So let’s talk about strategy and which marketplaces you should be on.
The question we get the most on this marketplace topic is, “Which one should we be on”? It’s an interesting question because it asks which “one” should you be on. The answer is not just one. The answer is, you should be where your customers are searching for your products. Seems obvious, but you don’t see any used cars on Amazon so why try and sell them on there. If you want a marketplace you likely can’t afford to not be on, it’s Amazon. There’s a reason nearly 66% of all product searches start on Amazon according to Emarketer. Amazon has become THE place to find products, read reviews, and compare pricing. Further, according to Episerver, nearly 68% of shoppers use Amazon as a source to compare products found on other websites and/or in retail stores. So, if you had to choose just one marketplace to be on, our answer almost every time is Amazon.
So what does that mean for these other marketplaces, is there even a market for them? The resounding answer is, yes. A recent statistic came out about consumer behavior and where they are shopping. According to consumer research from Tinuiti, 57% of those who buy on Amazon, also shop on Walmart.com. The reverse is a much more staggering statistic…91% of Walmart buyers also shop on Amazon. While Amazon is certainly the 800 pound gorilla, the recent COVID-19 pandemic has showcased other marketplaces and set them up for extreme growth. Now that we know there is a market outside of Amazon, let’s take a look at some of the advantages of being on multiple ecommerce marketplaces.
Spread Sales Risk Between Multiple Marketplaces
You’ve heard the phrase, don’t put all your eggs in one basket. A marketplace strategy shouldn’t be any different for your company’s strategy. Picture this, your only selling channel outside of your website is a nationwide retailer that just filed for bankruptcy. Doesn’t sound unlikely, does it. But, thanks to COVID-19, Hertz, JCPenny, Neiman Marcus, Chuck E.Cheese’s, and Pier 1 all filed for chapter 11 bankruptcy. These are just a few of major companies in the US that have filed. Now imagine your only other channel is Amazon and you’ve just been deemed nonessential. This likely means your sales just plummeted because Amazon has deprioritized your products. Unfortunately, this was the reality for a lot of sellers out there. How can one combat this potential risk? Diversification.
Advantages of a multi-marketplace strategy:
- Spread the sales dip risk across multiple marketplaces. If one takes a hit, it’s likely the other(s) won’t. This goes back to not putting all your eggs in one basket. COVID-19 forced Amazon to re-prioritize products and devalue non-essential goods. Those that were on two or more marketplaces didn’t see the massive sales loss that those did who were only on Amazon. In fact, many saw an increase in the other marketplaces because they weren’t deprioritized.
- The ability to reach buyers loyal to that “other” marketplace potentially leading to increased sales and brand and product awareness. Understanding and being visible on these other marketplaces will open your products and brand to new customers and markets. Taking it a step further and advertising on multiple platforms will further increase your exposure.
Being on multiple marketplaces allows you to leverage advertising knowledge from one marketplace to another. While the advertising platforms aren’t identical, nor are the search terms and phrases customers are using, you’ll be able to glean new insights as to how consumers are searching for your products.
Now that we’ve had a chance to review a few of the advantages, let’s take a look at some of the hurdles you may encounter.
Things to keep in mind for a multi-marketplace strategy:
- The additional cost is the obvious one. Remember it’s not just the cost of selling the item or monthly marketplace fee, but also the time involved for your internal staff to manage each. From account setup, to taxes, to order and product management, it all takes time. If done right though, it can net you some serious sales gains.
- Multiple places to manage product data. If your internal resources are limited this may stretch them even further. To help with this strain, consider investing in a multi-channel listing software like Sellbrite or Channeladvisor. If you’re using the Shopify platform, they have integrations with most of the major marketplaces like Amazon and Walmart making listing, managing products and orders quite simple.
- Inventory management could become an issue. If you choose to use Amazon’s FBA (Fulfillment by Amazon) program and Walmart’s WFS (Walmart Fulfillment Services) then you’ll have inventory in not two but three places – your warehouse, Amazon’s warehouses and Walmart’s warehouses. Rest assured, brands and companies are doing this now it just takes a bit of planning and practice to make it efficient.
If I told you, according to Sellbrite, brands that sell on their own website and at least two other marketplaces sell 156% more than those brands who just sell on their website, would you consider a multi-marketplace strategy? So the question now is, can you afford NOT to be on multiple marketplaces? If you’re going at it alone, our suggestion is start with one, the one you know where your customers are looking for your products or products like yours. Get really good at it, then branch go after another. If you want to tackle more than one because you’re the ambitious type, then go for it! Don’t be afraid to ask for help though. There’s a lot of support systems out there in terms of software, forums, and agencies that can help you navigate these marketplaces.
If you’d like to learn more about which marketplaces you should be on or just have questions about the ones you’re currently on, please let us know by emailing firstname.lastname@example.org. We’d be happy to chat and see how we can help.