Marketplace, partners to boost your ecommerce

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In 2020 alone, Marketplace sales in Latin America grew by 36.7%, registering the highest growth compared to regions such as North America (31.8%) and Europe C. (29.1%), while in 2021, the main Marketplaces in the world reported sales of 2.67 trillion dollars, 62% of total global e-commerce.

This shows great potential for this sector, which continues to grow year after year, representing an opportunity for ecommerce to increase their sales channels, especially in Mexico and Latin America, where Marketplaces are not yet reaching their full potential.

These large online stores have become a gateway to the world of ecommerce, both for those who sell their products and for those who buy them. Marketplaces or small virtual marketplaces unite sellers with buyers and are an open space, both for large companies and entrepreneurs, who, in both cases, must comply with certain rules to offer their products on the platform.

In this article, we will discuss aspects such as how Marketplaces work and how they can help you boost your ecommerce, key points to evaluate and outstanding players, don't miss it.

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Marketplace Good option for ecommerce?

Amazon, Walmart, Mercado Libre, eBay, Linio, Costco, Coppel Have you accessed these and other Marketplaces? You are part of the 90% of Internet users who have consulted or purchased a product in this commercial window. A pretty good figure for e-commerce.

Why do buyers choose these platforms? Your decision is largely conditioned by guarantees in terms of security and shipping conditions, together with better benefits and promotions, all related to the main motivators of online shopping. Let's see a little more about the topic.

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Also read: Upcoming seasons, Mexicans' intention to buy

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‍Logistics as a generator of satisfied customers

As we have said, logistics is a key point in the operation of online stores, and the level of customer satisfaction and their shopping experience depend to a large extent on it.

Generally, Marketplaces offer their buyers different logistics solutions, such as better delivery times, cheaper or free shipping rates and tracking of the order status, thanks to their alliance with suppliers of Fulfillment who provide this service, which at the logistical level, becomes a differential and a hook to attract the customer.

In addition to the above, there is the issue of exchanges and returns, this differential increases the purchase rate, since one of the main fears of the online buyer is not to have this benefit in case of dissatisfaction with the product.

Who doesn't want to receive their order in the shortest possible time, paying little or nothing for shipping? These are attributes that Marketplaces offer to their customers, which not all ecommerce can match, especially when they are starting out.

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Security and Trust

According to figures from the AMVO, among users who have not yet purchased on the internet, 80% do not do so out of fear of being a victim of fraud, this being a barrier to online purchases, where Marketplaces, thanks to their great name and recognition, are synonymous with trust for the buyer.

Buying a product in a new online store, for which there are no major references, is not the same as buying a product from a marketplace giant that is not only widely recognized, but also offers all the guarantees against the purchase.

By selling your products on the Marketplace, you directly benefit from the security and trust that your name inspires in the buyer, which turns into a gain to boost your sales, especially if your brand doesn't enjoy much recognition.

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Large-scale advertising

It's no secret to anyone, Marketplaces invest millions of dollars in advertising campaigns that promote their brand, which gives them great recognition worldwide, and it's a huge advantage for ecommerce businesses that use them as a sales platform, because without making direct advertising investment, they can benefit from these actions and make themselves known to thousands of users, increasing their likelihood of selling.

For sellers, in this case, e-commerce stores, it is also possible to pay for advertising within the Marketplace to give greater relevance to their product within the buyer's searches, however, the difference in investment value is abysmal compared to what the Marketplace invests to attract a greater number of users to its platform.

The above are 3 important features that have led many ecommerce businesses to choose Marketplaces as one of their sales channels, due to the differentials and benefits they can generate. So far, we have addressed 3 key points for online sales, however, when choosing to sell your products on these platforms, you should evaluate other aspects that we will see below.

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Additional Considerations for Selling on Marketplace

Deciding whether or not a Marketplace is a good sales channel for your ecommerce depends on several factors that are worth sitting down and analyzing. Get pen and paper ready! Let's talk about them:

Marketplaces are especially a good option for small businesses that don't enjoy greater recognition or ample capital for advertising campaigns. Appearing on these platforms allows them to make their products and names known to potential buyers, all, of course, under the conditions that the Marketplace requires to provide these spaces, which we will talk about in the following points.

All Marketplaces charge a commission per sale, generally between 15 and 20% of the sale value. Something you should take into account in the price you charge for your product, trying not to affect your profit levels.

In this case, you should also consider that the price of your product must be at or better than the competition to be attractive to the buyer.

In addition to the commission per sale, Marketplaces such as Amazon and Mercado Libre charge a fixed amount per month for the use of the platform. Cost similar to that paid by ecommerce to the platforms on which their online store is supported.

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Also read: Your ecommerce doesn't sell, 3 possible causes

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In terms of product inventory, some Marketplaces buy inventory, others receive it on delivery and when they sell it, they pay the ecommerce. In this case, it's important to know that if the product doesn't rotate, you may receive penalties from the Marketplace that can increase your storage costs.

Before making a decision, learn more about the trading conditions with the Marketplace and evaluate if they are aligned with your business strategies.

When you sell directly on your e-commerce, you get first-hand the buyer's data, which allows you to include it in your marketing strategies. In addition, you have a customer for whom you had to invest in attracting them, but for whom, you won't have to do it again, because if the customer was satisfied with your service, they will have high chances of buying back.

This does not happen in the Marketplace, customer data goes directly to the base of the platform and for every sale you make, you must pay a commission, regardless of whether or not it is the same buyer who had already purchased your products.

Based on the above points, you can make a more informed decision and decide if participating in these sales channels is what you are looking for for your ecommerce. As an interesting point, many ecommerce brands are starting out in the world of Marketplaces by testing on different platforms to publicize their brand, while positioning their own.com. After all, the customer who already knows your brand through the Marketplace can also search directly for your store, which will be beneficial for your recruitment process.

The key is to test, evaluate and make the best decisions for your business.

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Great players in the Marketplace

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In Mexico, there are really important Marketplace players such as Mercado Libre and Amazon, followed by Walmart, which has been growing strongly in recent years. Far from these three giants are others such as Liverpool, Claroshop, Coppel and Electra.

For this year, players like Shopee promise to make a lot of noise, which started operations in Mexico in 2021 and offers benefits such as zero commission for sellers and free shipping on small products, making it a big challenge for its competitors, its name will not go unnoticed in 2022.

Without a doubt, the growth trend brought by Marketplaces will continue to evolve exponentially, taking advantage of this explosion will depend on each ecommerce, just remember that the more you diversify your sales channels, the more opportunities you have to make yourself known and reach those potential customers who increase your level of sales.

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