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Marketplace such as Amazon, Walmart, Mercado Libre, Liverpool, and others, have become important representatives of online sales in Latin America and the world, surely you have heard of them, they are a reference in electronic commerce.
What is a Marketplace and how does it work? What should you consider to sell your products on these platforms? What are its advantages and disadvantages? We'll address that in this article.
What is a Marketplace and how does it work?
El Marketplace It's a online store which acts as an intermediary between the customer and the seller; generally, they are highly recognized brands that charge a commission per sale to the supplier, in return for allowing them to appear on their platform or virtual showcase.
If we compare it to the physical world, the Marketplace are the equivalent of a shopping mall, where different brands that are in the same place, offer, in many cases, the same products; here, the customer's decision will be determined by the differentials they find.
In terms of sales, over the past few years Han achieved high growth rates, registering significant advances by region during 2020, especially in Latin America, where the highest evolution of Marketplace (36.7%):
Los Marketplace They have taken over the market of online sales, have an annual turnover of millions of dollars and have become an ally and a necessity for those businesses that do not yet have their online store or they need to publicize their brand.
Also read: Marketplace in Latin America, the kings of online sales
Advantages of selling on Marketplace
* They are an interesting alternative for brands that seek to benefit from the recognition and large number of customers that these platforms enjoy, without investing in their own infrastructure.
* They are a good option for entrepreneurs and SMEs that do not yet have the recognition to generate high sales volumes, which allows them to publicize their products without making large investments. Sell your products on Marketplace It is usually cheaper than building and positioning your own store.
* As highly recognized brands, Marketplace they transmit greater trust and security to the customer, which affects their choice, since they know that they will have support in the face of any eventuality in their purchase.
* They have the experience, processes, human resources and infrastructure for online sales, which provides greater guarantees for both the seller and the end customer.
Disadvantages of selling on Marketplace
* Competition on these platforms is increasing day by day, requiring sellers to develop strategies to stand out, such as lower prices, greater promotions and benefits for the buyer, among other recruitment strategies, which can be exhausting for the brand, reducing its profit margins or causing sales results to occur in the long term.
* If you have recurring customers in the Marketplace, you also have to pay a commission for each of your purchases. Contrary to what happens in the DTC, where if you have repeat customers who buy from you again, your profit margin increases after the first purchase, since you don't have to keep investing in their acquisition.
5 Tips for Selling Successfully on Marketplace
1. Choose the right Marketplace
As in life, not all the products or services we find apply to everyone; in the electronic commerce, not all Marketplace are efficient for all brands. Just as there are giants like Amazon where you can find all kinds of products and categories, there are also Marketplace more specialized.
What product are you going to sell? Who buys it? Do you have the Marketplace qualified traffic? When looking for where to sell, choose the most popular platform appropriate, according to your type of product and audience, selecting which one you are going to be in depends on your niche market.
In addition, consider aspects such as operating costs, the ease of the sales process, the required stock, the trading conditions, the charges for inventory and storage, the Fulfillment, among others; based on this, determine how convenient and profitable one or the other option is for your business.
As a tip, you can start selling in several Marketplace and analyze where you get the best results, or also, you can start with your DTC and Marketplace simultaneously; the customer will know you on this platform and will be able to continue shopping on your own ecommerce.
2. Organize your internal resources to sell online
Although, selling in Marketplace It involves less staff and infrastructure, you must have an internal sales team, which is responsible for issues such as inventory management, order tracking, control over the payment of commissions, the income of money from sales, customer service that now wants to buy directly from you, among others.
Sell in Marketplace it's a collaboration and shared work between the platform and your brand, where both parties play important roles to make the operation work.
3. Evaluate your competition in the Marketplace
Both in the physical and online fields, carrying out an analysis of our competence is an important aspect to determine how we are and what strategies we can implement to stand out in front of others.
Analyze who your competition is in the Marketplace, what benefits it offers to the customer, how it presents the product, what prices it manages, what comments it has from its buyers, its score as a seller, etc. Use this information for your sales strategy, learn from good practices and take advantage of its flaws to be better than the competition.
Stand out from your online competitors
How are you going to showcase your products? Faced with competition as strong as the one you find in Marketplace, you must be able to capture the customer's attention right from the start. For this purpose...
* Your images must be eye-catching, in excellent resolution and show the product from different angles. This is the first “hook” to attract the customer.
* The descriptions must be attractive and clear, making known the characteristics and scope of the product, if you can include tutorials for use, it will be an additional winning point.
* The in Marketplace SEO is also important, consider the keywords you'll include in the title and product description. There are different SEO tools that allow you to know how people are searching and what words they are using, which will be very useful for composing texts.
Also take into account voice searches, which are becoming more relevant every day. Ask yourself: if you were the buyer, how would you search for the product?
* Consider investing in advertising, did you know what in Marketplace Like eBay, more than 50% of the results on a search page are sponsored products. Promoting your products will help give them greater visibility within the store, show them to more customers and increase your chances of selling.
Also read: Ecommerce Trends: What can we expect in 2022?
That price does not become your only differential, stands out for your quality, for your way of selling the product, for the good comments about it, for the consistency of the description with what you are selling. Your quality is your calling card and should be the best from start to finish, only then will you “stand out from the crowd”. Los Marketplace give greater relevance to their best sellers.
4. Calculate the operating costs of selling on Marketplace
When making a decision for your business, the economic issue will always be an important aspect; if your goal is to boost your online sales through Marketplace, consider the following costs:
* Fixed: The Marketplace It has fixed costs, on Amazon for example, a fixed amount is charged per month for the use of the platform, which is around $600 pesos.
* Sales commission: when you make a sale for Marketplace, you must pay a commission, this is usually between 15 and 20% of the value of the product.
* COCK: the Customer Acquisition Cost is one of the most important amounts to consider; in Marketplace you can invest in guidelines to promote your products, usually it will be between 5 and 10% of the cost of the product, in some cases, up to 50% when you want to announce a launch.
* Storage: How much does it cost you to store your products? In the case of a Fulfillment Center, the value of a cubic meter is close to $500 pesos or more. If the product does not rotate, the Marketplace they will “penalize” you and “push” the inventory out of the warehouse, increasing the cost of storage up to 10 times.
* Operational: refers to the cost of management and enlistment tasks (receiving, filling, packing, etc.) that are carried out before shipping; the Marketplace With Fulfillment It includes it in the price of the shipment.
* Shipping: Usually the Marketplace they are quite economical in shipping nationwide. When it is a unit piece, shipping can cost approximately $70 pesos. If the shipments are made on your own, that is, from your ecommerce, can be around $75 pesos, however, by being able to include more pieces for the weight covered by the guide, you can reduce costs per piece.
Also read: From 0 to Ecommerce, everything you need to know to create your online store
5. Measure, evaluate and make decisions about your online sales
You won't be able to know how positive your participation is in a Marketplace if you don't measure your results. Evaluate month by month your sales level and product turnover, your profit percentages, the fulfillment of your sales goals, your products with the highest and lowest output, your operating costs, customer feedback, and more. Based on this information, determine whether or not it's a profitable channel for your brand and make decisions.
Remember that you must be constant and patient, you will hardly start selling from day one, the important thing is that your results improve month by month, strengthen your sales strategies and exchange and return processes, always seeking to improve the shopping experience of your customers.
Without a doubt, the Marketplace will continue to be outstanding players in the electronic commerce worldwide. If you have your own ecommerce If you are looking to increase your sales or publicize your brand, they can be a good option. Consider all the aspects that we have talked about in this article, put into practice the 5 tips and never forget to monitor your results
If you are looking for an ally to help you improve your delivery process, enhance your compliance and the satisfaction of your customers, do not hesitate to contact us, we are the best fulfillment center for ecommerce in Mexico and Colombia, you just have to click Here.
A key aspect of competing within these platforms is having fast and reliable deliveries. Partner with a service of fulfillment in Querétaro can help you reduce operating costs and ensure positive buying experiences, increasing the chances of a repurchase.
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