Retail sales through online marketplaces: What to consider

Industry News

Retail online marketplaces have become increasingly common, with big-names such as eBay and Amazon being joined by smaller, niche marketplaces to offer sellers a number of different avenues to engage customers. Now, the only question merchants must ask themselves is whether they should capitalize on the availability of these online marketplaces to improve retail sales.

To sell or not to sell, that is the question

Deciding on whether or not to pursue retail sales on marketplaces is no easy choice to make. There are pros and cons associated with both options. Fortune3 noted some of the drawbacks associated with listing products on Amazon and eBay.

“You can [list products on retail marketplaces like eBay and Amazon], but their fees eat up your profits.”

“You can [list products on retail marketplaces like eBay and Amazon], but their fees eat up your profits. It’s very hard to make a living only selling products on these websites. And, if you’re trying to sell these products, they’re very rarely high-margin,” the news source explained. One of the cons of selling through online marketplaces is that retail sales profits can take a hit as these fees rack up. Fortune3 also noted that “competition is intense” between sellers.

There are other cons for retailers as well, such as losing the ability to retarget or upsell customers. Many online marketplaces view customers as being theirs and they are simply lending them to the merchant listing their products. Once the retail sales process on the marketplace is completed, merchants are quite often forbidden from contacting the customer. Trying to re-engage these individuals may be against the terms of service of these marketplaces and may result in a merchant getting barred from these sites.

It can also be a time-consuming prospect to list products across a multitude of marketplaces and simultaneously manage them along side a merchant’s own online and offline retail sales. Some merchants may spend hours trying to reconcile inventory and ensure all orders are processed.

Technology may be the marketplace solution retailers need

Now, just because there are cons to selling products through online marketplaces, that doesn’t mean merchants should forget about it. Marketplaces provide a platform for additional retail sales and enable them to reach new audiences, which is pivotal, particularly for newer retailers.

What that does mean, however, is that merchants need to be smarter in the way they approach online marketplaces, particularly in regard to how they manage and list products. Some eCommerce solutions allow retailers to quickly list products on multiple marketplaces, even if they have highly specific requirements that may otherwise hinder listing.

Retail online marketplaces can be a significant boon for many merchants, however, they do add an extra level of complexity to eCommerce operations. The right solutions can make management significantly easier in the mean time.

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