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How To Assess Which Online Marketplace Is The Right Fit For Your Business

Regardless of whether you are already selling on a marketplace and are wanting to expand your reach, or are simply looking to sell on an online marketplace for the first time, it is extremely important that you’re thoroughly researching your options.

The fact is, deciding on a new online marketplace isn’t always an easy feat, and we would therefore recommend that you consider the following tips as part of your research process.

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Monitor how much traffic each marketplace gets per month

One of the key advantages of selling on a marketplace over your own website, is that you have instant access to an active customer base, who are looking for products that you sell. For this reason, it’s worth getting an idea of just how much website traffic each marketplace gets, and which countries this traffic comes from.

This is particularly important if you are looking to sell internationally, as there are a number of considerations you should be making including whether they sell into the one market, or multiple. Alternatively, if you aren’t currently selling overseas and would like to test out new international markets, it might be worth looking into domestic marketplaces with an international reach, for instance eBay or Amazon.  

SEE ALSO: Cross-Border Trade Opportunities With eBay

Consider their fee structure

Perhaps the biggest downfall to selling on an online marketplace is that it comes at a cost. Making sure that you’re aware of these fees in advance is one of the best ways to assess just how good of a fit the marketplace is for your business.

The reality is, certain marketplaces will be better for certain types of businesses, and you will need to consider your profit margins and average volume of sales, in order to judge which type of pricing model is better suited to your needs.

As an example, you will need to look into whether or not they have a commission structure, and if so how competitive it is, as well as whether they charge listing fees and/or a monthly fee. If you sell low volume/high value goods, then a monthly fee may not be ideal as you will likely be charged regardless of whether you make a sale that month or not. The bottom line is, you should get an idea of how profitable each marketplace will be for your individual business.

SEE ALSO: How To Make The Most Out Of Your Online Marketplace

Do also keep in mind that there may be other additional charges, such as for fulfilment options, marketing and promotional fees, as well as any other costs that could be incurred through marketplace support. While these will typically be optional costs, they are all worth considering.

Understand their rules and regulations

As a marketplace seller, you will understandably have less freedom and control over your branding and listings, than you would selling on your own eCommerce site. While this won’t necessarily be a problem, it is worth learning just how much flexibility you will have over design and pricing, as well as their rules regarding feedback, returns and shipping. You will need to assess just how able you are to meet their expectations and their customer’s expectations.

SEE ALSO: A Complete List Of Online Marketplaces Across The Globe

Ask yourself if you’re prepared for managing multiple channels

If you’re taking your business from selling on a single channel (i.e. your website or perhaps a different marketplace) to multiple channels, you will need to ensure that you’re able to support this multi-channel approach. The best, and most effective way to achieve this is by investing in an order and inventory management system, which can integrate your selling channels, ensure your stock levels are correct and that you’re not overselling items, and also manage and process your orders all from a single dashboard.

Ultimately, there are huge benefits to selling on a marketplace, but it is crucial that you dedicate the time to researching each option and assessing just how well they will fit with your business model. Our latest eBook has been designed to help you not only get started with marketplace selling, but also to provide you with tips and considerations for growing your business across multiple selling channels.

SEE ALSO: How Inventory Management Software Will Save Your Online Business

For more information on which marketplaces Linnworks integrates with, take a look at our integrations page

Complete list of online marketplaces

Topics: ecommerce best practices, eCommerce, online marketplace

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