Retailers and brands must determine whether marketplaces are a friend or foe. The emergence of global marketplaces like Amazon, eBay, Jet and others, presents both an opportunity and a threat. Informed decision-making based on data and analytics is key, as well as considering some specific questions before embracing marketplaces as a sales channel.
What is the business case for embracing this channel?
Are you going after cross-border trade and the lure of larger markets? Or are you trying to address newer customers who are not being reached via current channels? Or could it be to complement your current touchpoints by leveraging cutting-edge online website interfaces, analytics tools, and distribution capabilities offered by these marketplaces? The more specific you can get about what you’re trying to accomplish, the more successful your efforts will be.
Have I identified the right products to sell on the marketplace?
A marketplace can be leveraged as an advertising platform for new product launches or as a clearance platform. Brands may even consider selling limited-collection items, while retailers could sell just their private labels.
Do I have a strategy in place for offering competitive prices?
Developing an effective pricing strategy is crucial for success. Customers’ ability to compare prices of similar products forces brands and retailers to chalk out attractive prices while maintaining margins.
Am I prepared to streamline the SKU onboarding process?
For those who decide to sell on marketplaces, creating a plan that facilitates smooth onboarding of products is essential. Common concerns revolve around varied price combos across marketplaces, product listing irregularities and poor content.
Am I ready to closely monitor performance to spot problems?
Monitoring performance across online marketplaces is critical. This will reduce problems of fake and used products, uncover product content gaps and support price compliance decisions. It will also help counter instances of brand dilution, loss of control and limited access to customer data.
Global marketplaces can offer extensive customer reach and superior shopping experiences. But brands and retailers must make sure they are not being taken advantage of, and construct a mutually beneficial partnership. One way to do this is to provide feedback to your marketplace partners to add features that could increase sales.
As with many endeavors, results are not guaranteed. But answering these questions and taking small, calculated steps that are supported by data and analytics has helped brands and retailers leverage marketplaces to stay relevant.
Ugam provides data and analytics for retailers, brands, B2B manufacturers and market research firms.