Why Brands Should Consider Online Marketplaces - Key Elements That Lead to Succes
Much of the world has turned to eCommerce in the past few years. With over 85% of people globally choosing to shop online in 2020 alone, a spotlight has fallen onto digital marketplaces in particular.
Many businesses are scrambling to get online, and marketplaces offer an accessible and inexpensive alternative to setting up an independent online store—or perhaps even a new channel to be used alongside your main eCommerce storefront. Online marketplaces like Amazon, eBay, and Wayfair offer access to massive existing, loyal customer bases. They can help your business compete with well-known brands, enable you to easily collect reviews that support your products, and even provide fulfillment support.
Let’s take a closer look at this scalable opportunity to grow as a business, reaching a wider audience with a smaller investment.
What is an Online Marketplace?
In simple terms, an online marketplace connects sellers and shoppers by allowing multiple third-party vendors to list their products on a single eCommerce website. From there, there’s quite a bit of diversity.
You’ve certainly heard of the top marketplaces; Amazon, eBay, Walmart Marketplace, and Etsy, but there are over 100 online marketplaces covering absolutely every niche you can imagine.
Some will accept absolutely any sort of product, such as Amazon. Some host only a specific type of product, like Etsy’s focus on vintage and hand-made items. Some like Walmart Marketplace curate products and vendors, while others like eBay are essentially one big free-for-all. All that matters is that a marketplace offers access to multiple third-party sellers, be it operating on a B2C, C2C, or B2B model.
Digital marketplaces by definition control the transactions. Most also receive a fee for each item sold on their platform. But other benefits like customer support, shipping, and returns depends on the platform. That’s why it’s crucial for brands to find the right marketplaces to sell their products to the right audience, and get the support they need.
How Online Marketplaces are Evolving
Online marketplaces have been around for several decades, but they’ve been quickly evolving with the pandemic in particular pushing drastic change.
In 2020, 92% of consumers shopped with online marketplaces, with 74% of those using Amazon and 48% eBay. Many consumers bought online to protect themselves during the pandemic. Even groceries and other essentials could be delivered to the doorstep with no reason to step outside.
Though the business world is slowly moving to a post-pandemic normal, there’s no sign of this trend decreasing. Many people still prefer to do their shopping from home. Customers actually spent 14.2% more time online in 2021 due to the pandemic, so this is one that’s likely to stick.
Amazon in particular grew, with a profit surge of 200% since the start of the pandemic. Many customers choose to use marketplaces like Amazon because they’re familiar, and they may receive rewards or discounts for shopping there that make them hesitant to branch out into unknown services—such as your personal eCommerce website. It’s no wonder that over 200,000 new sellers joined Amazon in 2020 alone.
B2B eCommerce is yet another high-potential market that still has plenty of room for investment in B2B online marketplaces. The industry is already worth 7.72 trillion and is projected to grow to 25.65 trillion by 2028. Wholesale marketplaces are popping up more and more frequently, selling stock in bulk or sometimes even competing services from several vendors.
Whether you own a B2B or B2C business, the expansion options offered by marketplaces make them a valuable channel to consider.