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What’s driving marketplace and drop-shipping platforms’ transactions

What’s driving marketplace and drop-shipping transactions. Expanding brand awareness and reaching new customers are critical strategies behind the rapid growth in marketplace and drop-ship platforms.

Marketplace and drop-ship businesses grew 38% year over year in 2022. That’s six times the growth rate of overall ecommerce, marketplace technology provider Mirakl says in a new report.

A platform strategy isn’t as simple as listing items on marketplace and drop-ship platforms — sellers can take different approaches to build momentum.
Fareeha Ali, director of strategy and market intelligence
Mirakl

“Behind the growth of these businesses are millions of businesses selling through marketplace and drop-shipping platforms,” Mirakl says. “Brands and retailers have embraced these platforms as new sales channels, using them as a cost-effective strategy to reach a wider audience and maintain customer loyalty.”

Marketplace and drop-shipping platforms

Mirakl provides ecommerce technology that enables companies to host marketplace platforms that include the option for merchants to drop-ship orders from their supplies directly to their customers. It also provides technology and services for onboarding marketplace sellers with their product catalogs.

Mirakl analyzed the performance of 65,000 sellers and suppliers on Mirakl-powered marketplace and drop-shipping platforms for the 24-month period between the second quarter of 2021 and Q2 of 2023, accounting for 125 million SKUs and nearly $5 billion in the value of annual gross merchandise volume. Mirakl says that brands account for 53% of businesses in its global network of over 65,000 sellers and suppliers. Retailers account for 15%, and marketplace native sellers account for 32%.

In addition, Mirakl surveyed 1,500 marketplace sellers of various sizes in the U.S., the United Kingdom, Germany, France and Spain in last year’s fourth quarter to learn about their ecommerce priorities and challenges.

Focusing on customers, brand awareness and profits

Mirakl found that the number of businesses that began selling on marketplaces in 2022 increased by 31% over the previous year. It says 53% of marketplace sellers surveyed are selling on more marketplaces than a year ago. Also, 62% plan to expand their presence across additional marketplaces in the next 12 months.

Mirakl identified the top 3 reasons businesses choose to sell on marketplace and drop-shipping platforms:

Mirakl also found:

Brands gain marketplace confidence

Mirakl also notes that, on average, companies take 23 days to onboard marketplace sellers and generate their first sale on a Mirakl-powered marketplace or drop-shipping platform. For the fastest 25% of sellers, the time from initial onboarding to the first sale was four days.

Mirakl says the average 2022 sales volume for suppliers was $146,016.

To help companies sell through multiple marketplace and drop-ship platforms, Mirakl’s Connect platform provides application programming interfaces, or APIs, and pre-built technology connectors designed to assist sellers in listing and managing products.

Helping to drive up marketplace activity is a new level of confidence among brands in selling through marketplaces managed by other companies and featuring large numbers of sellers, the report says.

“In the past, brands were hesitant to sell on marketplaces, fearing brand dilution or loss of brand control,” Mirakl says.

But as marketplaces mature, they’re offering sellers greater control over wholesale activity, from pricing to product positioning, the report says.

“A platform strategy isn’t as simple as listing items on marketplace and drop-ship platforms. Sellers can take different approaches to build momentum,” Fareeha Ali, Mirakl’s director of strategy and market intelligence, says in a Mirakl blog. “According to the report, roughly half of companies market their entire product assortment on marketplaces. A quarter of sellers limit their platform offering to a small subset of their full product catalog, while 8% of sellers have no overlap between marketplace and owned channels — developing an exclusive offering for their marketplace partnerships.”

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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