Selling via an online marketplace can be a great way to monetise your product or provide consumers with a valuable service. There are many different ways to make a success out of marketplaces, and the best approach depends on the type of products or services you want to offer. This blog post will discuss seven tips for making your online marketplace successful.
Before we dive into the tips, let’s first take a step back and define what an online marketplace is. An online marketplace is an ecommerce platform that allows buyers and sellers to transact with each other. These marketplaces can be used to sell physical goods, digital products, or services.
What are the benefits of selling on a marketplace?
There are many benefits of selling on a marketplace.
- Provides a built-in audience of potential buyers.
- Saves you the time and effort of marketing your products or services to individuals.
- Typically have lower fees than other ecommerce platforms, such as Shopify or Magento.
- Choosing to sell on a marketplace can help you save money on transaction costs and increase profits.
- The rules and conditions are already outlined in the marketplace, so there is less paperwork and hassle to get your business up and running.
Consider what marketplace is right for you
When you consider joining an online marketplace as a seller, it is vital to think about what type of marketplace aligns with your brand and who your target audience might be.
Popular and highly rated platforms to sell in New Zealand like Trade Me and Facebook Marketplace are good options to consider. After you’ve decided where to sell your items, there are a few more things to think about to make your store a marketplace success!
1. Optimise product content
One way to make your marketplace store stand out is to have high-quality product content. Each listing should include clear, well-written descriptions and quality photos. If you are selling physical products, it is also important to provide accurate information about shipping timeframes and costs. Good product content that takes into account keywords will help you attract buyers and encourage them to return to your site in the future.
2. Prepare to spend money on advertising
Spending some money on advertising can help you attract buyers and sellers to your site and encourage them to return in the future. There are many ways you can advertise your store, as marketplaces often have options for you to upgrade your listings by featuring them on user search results.
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Some marketplaces will also offer promotional tools, such as coupons and discount codes, that you can easily add on and use to attract buyers. If you are selling a unique product or service on a marketplace and want to proliferate, you may also consider hiring an influencer to promote your marketplace on social media. An influencer can help you reach a larger audience and generate more interest in your site. Just be sure to do your research and choose an influencer who is a good fit for your brand.
3. Keep track of fee structures
Ensure that you pick the right marketplace for your needs, as different platforms charge different fees. For example, some marketplaces charge a listing fee, while others take a percentage of each sale.
Here are several different types of fee structures marketplaces may use:
- Subscription fee model: When some or all consumers must pay a fee to access the marketplace (a form of revenue-sharing for both the marketplace and the seller).
- Transaction fee model: When a small fraction of each transaction goes to the marketplace.
- The listing fee: When a payment is made for listing each item posted on the site.
- Advertising model: Third-party advertisers may promote and profit on the platform through the advertising model.
Whatever model you choose, ensure that it aligns with your business goals and that you can generate enough revenue to cover your costs. Be sure to factor all of these costs into your pricing to still make a profit.
4. Automate or regularly update pricing
Consider automating your pricing or regularly updating it according to the changing market. Doing this can help you stay competitive and attract buyers.
According to a study, price matching ranked as the second most effective promotional strategy for retailers in the US. You can always research your direct competitors and manually update the pricing of your products yourself. Still, automated prices are available on some marketplaces and can save you time in the long run. Amazon’s Repricer is one example of a marketplace with automated pricing, which automatically adjusts your price to improve sales.
5. Think about your shipping strategy
Be sure to have a shipping strategy before you launch on a marketplace. This includes figuring out how you will ship products, which carriers you will use, and how much you will charge for shipping. Take into account shipping economics when making these decisions. For example, it may be more cost-effective to ship a more significant number of items in one shipment than it is to send them individually as this can also boost stock-up behaviour from customers.
It’s also important to consider the customer experience when shipping products. Ensure that your shipping process is as efficient as possible and that customers can track their shipments. Consider offering free shipping as an incentive to encourage customers to shop on your store.
In addition, some marketplaces typically have their own shipping requirements that you will need to comply with. For example, Amazon has strict packaging requirements that you must follow to sell on their platform. On the other hand, TradeMe works with local couriers and has API integration so that all you need to do is define the dimensions of your package and book a time for a courier collection.
6. Be ready for expansion
Be prepared for your store to grow. This includes having the necessary infrastructure to support an increase in traffic and transactions. Ensure that you have enough staff to help with a more significant number of customer inquiries. Inform yourself on how you would go about creating your own website or registering important intellectual property. Intellectual property such as your business name, logo, and website domain should be registered before you decide to expand your business, whether it is your own ecommerce website, retail expansion or global expansion.
Think about potential buyers or vendors who may want to buy or sell your product in a retail store or take your product overseas. Retailers in New Zealand such as Shutthefrontdoor, Superette, Smith & Caughey’s build their inventory on curated items from different businesses. Online versions following this model are TheMarket and Mightyape. All these brands have a type of target market customer so it’s important that you find the right buyer for your product or service.
The most crucial aspect of being ready for development is adapting your product. If you have a one-of-a-kind item now, you must anticipate that it will not fulfil 100% of demand in the future. You may need to modify your goods to match the demand.
7. Utilise notifications
One way to keep your marketplace running smoothly is to utilise notifications and automatic emails. Notifications can be used to remind buyers and sellers of important deadlines, such as when a listing is about to expire. A common feature of a marketplace is automatic emails, which are generally provided as part of a service. The ability to transform and adapt your message depends on the marketplace. Customise your message where possible so that you can showcase your own brand and tone of business, while also developing trust and engagement with your customers. These automated messages can be set up in advance and can be a valuable way to stay in touch with your customers.
Keep customers returning with notifications
Your customers will receive a text or email notification each step of the parcel journey. They’ll love you for it!
By following these tips, you will be positioned to set your store up for success on any reputable marketplace. By planning ahead and thinking about the various aspects of selling on a marketplace, you can ensure that your business is ready for growth. Remember to always keep the customer experience in mind, monitor market trends, and utilise notifications and automatic emails to stay in touch with your customers.