Online marketplaces like eBay and Amazon were once seen as the sole preserve of small traders selling cut-price, end-of-line and distressed inventory. They created an opportunity for entrepreneurs, unburdened by the demands of maintaining a brand, to stack goods high and sell them cheap.
Low costs combined with the sheer volume of available items, unlimited product ranges and the opportunity to purchase products simply unavailable elsewhere made these virtual marketplaces highly trafficked and therefore extremely lucrative. With eBay and Amazon continually topping the Hitwise Top Retail Sites Index (eBay.co.uk currently has a 19.2% share of all retail site visits in the UK compared to just 1% and under at a number of high profile sites including Tesco, Next and John Lewis), it is little wonder that many large retail names have started to take notice.
Early big name adopters to online marketplaces, like Argos, Littlewoods and Schuh, followed the small traders’ lead and used online marketplaces to maximise returns from end-of-line stocks and returns. It wasn’t uncommon for big name retailers to trade under a different name, fearing their image and high street margins could be damaged by their association to what many people, at the time, believed to be extremely low cost, low value sales venues.
But then two things happened.
- The marketplaces started aggressively targeting big brand sellers, opening up more categories and developing new platforms for them to sell across, keenly setting their pricing to make it as easy as possible for large scale sellers to list their entire product catalogues.
- The global economy fell apart (you might have read about this in the newspapers).
For retailers struggling in an almost perfect economic storm (high unemployment, falling house prices, limited lines of credit, etc. etc.) a sale is a sale. It doesn’t matter if that sale takes place on the high street, via their website or on a third party marketplace. In a time when cash is king, eBay and Amazon have become extremely legitimate routes to market.
Big name retailers, selling fixed priced goods, are now as synonymous on eBay and Amazon as online auctions and book sales. Take a look on eBay’s fashion pages and you may be surprised to see prominently listed sellers including French Connection, House of Fraser, Karen Millen and Superdry. Similarly, Amazon is now littered with large scale retailers and brands selling via its virtual shelves.
There are a number of reasons why trading on third party marketplaces makes so much sense. These are equally as valid for big name retailers as they are for smaller independents.
Nine Reasons Why Selling on eBay and Amazon Makes Sense
- Go where the people go: According to Hitwise, in the UK eBay and Amazon have a larger share of traffic than all of the other online stores combined in their top 20 Retail Index.
- Fixed costs: The costs of selling on eBay and Amazon are largely fixed. This means you will have a clearer understanding of your cost of sale prior to listing and ultimately selling an item. Compare this to the volatile world of paid search where the cost of advertising, if left unchecked, can quickly destroy any margin.
- Good practice reaps rewards: Maintaining a good reputation is rewarded by online marketplaces with the very best sellers given greater prominence in search results on eBay and a better chance of winning the blue buy box on Amazon.
- One basket, multiple retailers: Both eBay and Amazon now allow customers to add items from multiple retailers into a single basket and make only one payment making shopping via online marketplaces more convenient than ever. This could mean an individual hand crafted item sold by a sole trader could be purchased alongside goods from a major retailer in a single transaction.
- Alternative payment methods: PayPal as the primary method of payment on eBay offers a multi-million pound opportunity to retailers that is not readily available to the high street and still not widely adopted on many own brand websites. Many online shoppers view see their PayPal account balance as spare cash and will use to make impulse purchases on eBay.
- Easy Fulfillment: Services like Fulfillment by Amazon takes the pressure of retailers to pick, pack and ship items, can help ease the burden of returns and open up opportunities for free delivery. Amazon can also help you ship products sold via eBay or on your own site.
- Instant opportunity: You can be up and running in minutes. This gives retailers of any size the opportunity to test the waters before committing significant funds and resource to developing a more bespoke online solution. It also offers the means to turn stock into cash quickly with very limited upfront investment.
- A level playing field: The inclusion of premium brands attracts a higher number of shoppers to the online marketplaces and therefore has the potential to drive traffic through to smaller retailers’ listings. Small retailers will nearly always be priced out of competing on major high street locations such as Oxford Street in London – but they can compete head to head with the big guys on the busiest online shopping sites.
- Automation makes it easy: Software products like SellerExpress can simplify the process of listing and selling via multiple online marketplaces by automating many of the time-consuming and labourous tasks normally associated with these platforms – such as inventory management, auto price checking, order fulfillment, customer emails, shipping, currency conversion and much more….
Brendan Doherty is the CEO at SellerExpress.com – an online solution (SaaS) for managing every step of the online marketplace sales cycle including inventory management, auto price checking, order fulfillment, customer emails, shipping, currency conversion and much more. For more information visit or to start your 30 day free trial visit: http://www.sellerexpress.com