In 2020, marketplaces will represent 57% of global e-commerce. According to Forrester, global sales on a marketplace should even approach 70% by 2022.
So you don’t need to be an expert to know that selling on marketplaces has become essential in 2021.
From a distance, it almost looks simple. More visibility, more market share, being positioned at the same level as your competitors, multiplying your points of sale… In reality, it’s a bit more complicated.
When you launch a business, you hope for a return on investment worthy of the effort you’ve put in, but you don’t always know where to start. 🤯
Is my business suitable for selling on marketplaces? How are my competitors positioned? What products should I put online? How do I manage the integration of my catalog? Do I have the necessary human and logistical resources?
To answer all these questions, we have compiled practical advice and feedback in a comprehensive article to help you organize your strategy in a solid and profitable way.
- Before I launch:Am I ready to sell on marketplaces?
- Step 1: Define your online sales model
- Step 2: Define your online sales strategy
- Step 3: Choose your first marketplace(s)
- Step 4: Define your product strategy
- Step 5: Define your pricing strategy
- Step 6: Define your branding strategy
- Step 7: Have a logistics service adapted to the requirements of e-commerce
- Step 8: Have a well-honed internal organization
- Step 9: Set out a roadmap
- Let’s go!
- What you should remember from this article
“The costs of launching on marketplaces are not huge, especially seeing as it can turn out to be an unsuspected growth area”
Florent Ducauroix, co-founder and head of development at LesPoulettes.fr
A crucial and structuring step, is to determine the model that defines your online sales activity from the start:
- Am I a supplier, a retailer, a pure player, a brand, a click and mortar*, DNVB**?: You sell, ship your products and manage your stocks.
- Am I a dropshipper?: You do dropshipping. You sell and your supplier takes care of delivery and stock management.
It is also important to think about the type of marketplaces on which you want to sell your products:
- Specialist and/or generalist? Don’t put all your eggs in one basket! Where a generalist marketplace generates more sales volume, a marketplace that is specialised, for example, in DIY, brings less but more qualified traffic and can therefore generate more conversions.
- National or international? Start with marketplaces located in the country of your stocking location, in order to minimise delivery times, an indicator that is very closely monitored by marketplaces. Also consider the exchange rate risk if you venture outside the euro zone and the customs and VAT issues for international sales.
💬 Let’s take an example…
You are in the DIY market.
You sell both drills and lawnmowers. ManoMano, which specialises in the sale of DIY products, is a marketplace that is perfectly suited to your product catalog. This doesn’t prevent you from integrating some of your products on generalist marketplaces such as Amazon, Cdiscount and Fnac-Darty. You can do it all. You simply have to take into account the more or less qualified audience of each platform and build your product segmentations accordingly.
There are several criteria to be considered when choosing the marketplace(s) best suited to your business:
- Notoriety/size of the marketplace? Traffic? Targets?: Should it be a large or small marketplace? It is important to study the traffic generated by the marketplaces. The number of unique visitors per month can be a good indicator. Also consider whether your target customers are present on this type of marketplace.
- Are my competitors present on the marketplace? Your success/visibility may be affected if your products are over-represented on the targeted marketplace. However, the presence of your competitors may also mean that this is the right marketplace for you. Be conservative with the big ones and explore the lesser-known ones too!
- How much commission for my product category? Some marketplaces can charge up to 20% commission. Keep your margins in mind or consider raising your prices for that marketplace.
- What is the fixed monthly subscription?: Often minimised, this can end up weighing on your budget especially if the marketplace is not performing well enough.
- Are my products accepted by the marketplace? Make sure you meet the criteria required by the marketplace. You can find this information on the marketplace’s institutional website or on their sales brochure.
- How easy is it to integrate my catalog? From a technical point of view, you need to look at how the product integration and order recovery is done on the marketplace.
Before launching headlong into your “marketplaces project“, it is a good idea to ask yourself how your products will be integrated into them. Is manual integration manageable and easy on the chosen marketplace?
💬 Let’s put ourselves in the situation of a tool seller…
You are aware that not all marketplaces have the same way of working and that they each require you to fill in endless matrices. Nevertheless, you want to integrate several hundred, or even thousands of products on several marketplaces.
What’s more, your collections of spanners and sanders are constantly evolving and changing. This means that you have to update your matrices (catalog) daily with new products, new prices, promotions and manually deduct your stocks according to the orders, and you have to do it for each marketplace…
Ouch! This is bound to take you a long time and will necessarily lead to errors.
Perhaps it’s time to consider working with a feed manager to automate your marketplace integration…
Whatever your decision is, remember to check that the targeted marketplaces are compatible with the chosen feed integrator.
This step consists of determining what your objectives are when you go to the chosen marketplace(s).
Is it to:
- Remove end-of-life products from stock?
- And offer only my promotions?
- And offer only my top sellers?
- And offer a range of products exclusively for marketplaces?
- And offer only products for which I have exclusive distribution?
💬 Let’s stay with the example of the DIY e-store.
Your brand of tools is already on sale in physical stores such as Leroy Merlin or Bricorama.
However, you want to diversify your sales channels and give your brand more visibility and therefore sell on marketplaces.
In this case, it is very important to define your e-commerce strategy in advance. It would be a shame to put yourself at odds with your retail partners by selling the same products on the net and thus creating unhealthy competition.
Generally speaking, it is advisable to be prudent with your pricing strategy (we’ll talk about this later 👇), so as not to cannibalise your offers and your sales channels. Also, be aware of the objectives you wish to achieve on marketplaces.
Indeed, this can be a very good way of removing from stock or liquidating the end of your collections when stocks are insufficient for physical retail.
As you might expect, the sale price is a central component in e-commerce. The majority of consumers base their purchasing decision on the sale price and the amount of shipping costs. It is therefore essential to think carefully about your pricing policy and to ask yourself the following questions:
- Should I charge a different price on the marketplace than on my physical shop/website? This may be relevant to avoid cannibalising sales from your website or your retail activity if this is the case.
- Should I include in my sale price the commission charged by the marketplace? This can be useful to maintain your margin.
- Should I include delivery costs in my sale price? This strategy allows you to offer free delivery.
Indeed, the notion of “free delivery” is an important variable in your customers’ purchase decision. This is also where your competitive benchmark will bear fruit. For the same price, you may be able to offer a brushcutter at the same price as your competitors, but with free delivery. This is where your offer will stand out. 🎯
- What is the competitive landscape for my products? The more competition you have, the more price wars you will face. Price is then the most important variable in winning the sale. The winner is the one who manages to offer the most attractive prices.
Don’t worry, once your products are online, you can always modify your prices to study the price elasticity. 😉
With the exception of a few marketplaces such as eBay, Rakuten or Amazon, which allow you to create product sheets including HTML and/or dedicated shops, the vast majority of marketplaces limit your presence to just a seller name.
The question then arises, do you want to be easily recognisable on marketplaces?
- if yes, choose the name of your brand/website/company as your seller name.
- if not, choose a fictitious name that will allow you to sell anonymously.
This is an important point to consider in your e-commerce strategy!
💬 Do you want to promote your brand of gardening tools or do you want to sell your stock anonymously? It all depends on your business and marketing objectives.
To put ourselves in the shoes of a DIY & Garden merchant, you want to multiply your sales channels and give visibility to your brand without cannibalising your retail sales.
In this case, it is important for your brand to be your seller name on the marketplaces. Your consumers will be reassured to see that you sell your products directly without going through an unknown retailer.
This decision obviously depends on the answers to the previous questions. 😉
Today, for 62% of customers*, delivery is the most important factor when buying on the Internet. You will therefore need to streamline your logistics. So how do you do this?
Streamlining your logistics requires listing a number of items and clearly defining their procedures (order management, returns management, delivery management, etc.):
- What are my order preparation and delivery times? These times must be very short in e-commerce. It is advisable to prepare an order within 24 hours and deliver it within 72 hours.
- Is my current logistics provider suited to e-commerce? Not all logistics providers are necessarily suited to e-commerce. For all your marketplaces orders, get in touch with a reliable delivery company specialised in e-commerce.
Other options: if you don’t have an in-house logistics department, you can either fully outsource your logistics or use marketplaces’ fulfilment service**. The latter will take care of dispatching your orders. You can also opt for the dropshipping solution (as seen in step 1).
- Is my products’ packaging suitable for delivery? Your packaging’s importance should not be underestimated. It must be shock-resistant so that your products don’t break and lead to a dispute with your customer.
- How are my customers delivered to? We strongly recommend offering several delivery methods. Among the most popular delivery methods are of course home delivery and delivery to a pick-up point, but you should also consider express delivery within 24 hours.
- How are my stocks managed? Poor stock management can cause you to miss out on sales and get yourself removed from the marketplace if you don’t honour your order dispatch commitments.
For example, if you work with a feed integrator, your stock management will be automated. It will send your stocks to the marketplace several times a day and products that are out of stock will be automatically taken offline.
- How are returns managed? Your returns policy will be highly scrutinised by consumers before they make a purchase. It is preferable to offer a flexible return policy (e.g. free returns). You should think about managing the validation of returns in stock.
Logistics is key to success in e-commerce. Don’t make the leap without thinking.
💬 Return to our DIY & Garden seller…
You have a warehouse and staff who manage retail logistics. So far, the logistics have been quite “simple”: You send several pallets of sanders and screwdrivers, according to your retail partner’s orders, to one single address. The single-order sale will take place in the warehouse.
Your infrastructure allows you to manage the logistics for e-commerce. You must then inform and train your employees for this new activity.
Why do you need to do this? Because e-commerce involves preparing products for single orders. Here, the logistics model is very different and requires more time and attention to be devoted to the packaging of the products to adapt them to this mode of shipment. Indeed, when your products are sent on pallets to shops, they are protected from shocks.
In the case of e-commerce delivery, the products are often badly handled by deliverers and must therefore have secure and reinforced packaging to avoid complaints and product returns.
Marketplaces require reactivity, rigour and organisation. Are you properly equipped for this?
- Do I have the necessary human resources? It is advisable to have at least 1 person in-house who is responsible for the day-to-day running of the e-commerce business: order recovery, verification of product sheets, product publication rates, order acceptance rates, customer satisfaction rates. Its metrics are very closely monitored by the marketplaces and must always be “GREEN” if you don’t want your account to be suspended.
- Do I have an operational and efficient customer/after-sales service? This is essential to maintain customer satisfaction and to make it easier for you to loyalize your customers. Its role will be to respond as quickly as possible to the requests of marketplace customers. Your cancellation and complaint policy must be clearly set out: manage and resolve all disputes quickly or risk being excluded from the marketplace
- Have I trained the accounting department? Arrange to train your accounting department, which will have to book your new marketplace orders and prepare invoices.
“Having a good team around you is key to the success of your business, these are the people who will take you to new heights!”
Sylvain LIN, CEO of Best Interior
You’re almost there! Now that you are well prepared upstream, it is wise to set out a roadmap so as not to rush in.
Indeed, caution is needed when it comes to the rate you add new marketplaces as you know just how demanding they are. As we mentioned above, the slightest mistake can lead to your account being closed.
- Integrate your first marketplace in 5-6 weeks: this takes into account the response time of the marketplaces, the creation of the products and the time to get real feedback.
- Integrate your 2nd marketplace in 3-4 weeks
- Integrate the following ones 10 days apart
Register and set up your seller account on the marketplace’s backoffice.
- Registration: just search for “become a seller on…” (the chosen marketplace) in a search engine, you will then be redirected to the registration form.
- Required documents: You will be asked for several documents: an updated Kbis of the company, the boss’s identity card, a bank account number…etc. Depending on the product category and the requirements of the marketplace, you may be asked for CEEE or Eco mobilier certifications or even whether the company’s head office is in France or Europe.
A well-structured product catalog is the key to quick integration and success on marketplaces.
If your catalog follows these tips, you will be ready to visit a large number of marketplaces.
Note that the catalog provided may be in CSV or XML format and must be translated into the language of the country where you are selling.
For each product you must have at least:
- EAN: or barcode. This is the key to getting your products accepted. It is with this 13-digit number that your products will be recognised by the marketplace and possibly linked to other similar products.
If you do not yet have an EAN for your products, you can contact companies that are authorised to sell them to you.
- SKU: or product reference. Each product must have a unique reference.
- Product title: it should be well structured, concise, and include the keywords that your prospects will be looking for. Your product titles can be different from those on your website if you want to avoid Duplicate Content.
- Product description: ditto. Your product description should be well structured, concise, and include the keywords your prospects will be looking for. Your product descriptions can be different from those on your website if you want to avoid Duplicate Content.
- Product visuals: Needless to say, your images are vital for the sale. They must be in HD (generally the square format 1000x1000px fits all marketplaces): the 1st image on a white background, without text, without watermark, without brand logo.
- Condition of the product: specify whether it is a new/used/repackaged product…
- Product category: the product category must be filled in very precisely. If your categorisation is not precise enough, this can lead to “errors” when you integrate or publish your products in the wrong categories.
- Size/Colour: this should only be indicated for each product if you sell products with variations.
- Quantity: your stocks must be up to date in order to avoid orders for products that are out of stock.
- Price: this is the price including VAT/unit
- Delivery methods: it is possible to add several delivery methods depending on the options offered by the marketplace (tracking, registered, express, relay point, etc.)
- Delivery costs: Depending on your pricing strategy defined in step 5, you can choose whether or not to offer shipping costs. You can also offer several prices depending on the delivery methods chosen.
- Delivery time: This is the preparation and dispatch time in working days for an order. As we saw in step 7, consumers attach great importance to delivery times. It is therefore advisable to be able to offer short delivery times.
📢 Tips: This step will be simplified if you already work or plan to work with a flow manager. The latter will retrieve the product catalog directly from your website or server and help you adapt it to marketplace requirements, if necessary.
“Our business is like a house of cards, the bulk of the work is in setting the parameters. Once you’ve got the mapping right, you’re away! This is as easy as pie with BeezUP. It’s a tool that’s easy to understand for almost anyone. That’s why I use the BeezUP feed whenever possible.”
François Vieillard-Baron CEO of MyCrazyStuff
You’re there! Your product catalog is finally ready and you are going to publish your first offers.
There are several methods for integrating your catalog on a marketplace:
- Manual integration via file: using the matrices provided by the marketplace (most frequently in CSV format). This method is viable if you have a small number of products that doesn’t change much. You will have to manually add your future products and update your stocks daily.
- Integration via a feed integrator: this will send your product/offer feeds directly to the marketplace. Your stocks will be automatically updated several times a day. Unlike manual management, this time, new products added to your website or your source catalog will be sent directly to the marketplace.
- Integration via API: a specific development will then be necessary in order to connect directly to the marketplace via API. For more information, please contact the marketplace.
📢 Tips: This step will be simplified if you already work or plan to work with a https://www.beezup.com/feed manager. This will retrieve the product catalog directly from your website or server and help you adapt it to the requirements of the marketplace, if necessary.
“We were well aware that managing marketplaces was a full-time job. They’re gasworks. No two work the same way. Whether it was matrix formats, shipping costs, delivery, etc. We didn’t see ourselves sending matrices several times a month to all the marketplaces. Especially since at peak business times, we have over 100 orders per hour!”
François Vieillard Baron CEO of MyCrazyStuff
BEFORE LAUNCHING, THINK STRATEGY
- Define your objectives and your e-commerce strategy according to your business model
- Analyse your market: marketplaces with or without added value, the positioning of your competitors, your customer targets, etc.
- Define your product offers according to your sales objectives and the positioning of the marketplaces
- Develop an effective pricing strategy to face the competition
- Prepare internally: inform and train your logistics, administrative and customer service teams to best meet the requirements of consumers and marketplaces
- Draw up a roadmap with the marketplaces you wish to join
AFTER THE STRATEGY, COMES THE ACTION!
- Build a “clean” catalog from the start to save time later on
- Make the crucial choice of the method of integrating your catalog: manual or automated via an e-commerce feed management software…
- Manage your e-commerce business on a daily basis: offers, promotions, products, orders, messaging, customer service, prices, logistics…
Managing marketplaces is a long-distance task. Don’t overlook the job of developing a strategy upstream. This is what will enable you to perform and move forward calmly through the marketplace jungle.
Remember to apply a test and learn strategy: nothing is set in stone on the web and everything can and must be constantly adjusted to move up in the marketplace’s referencing, highlight your offers, win the buy box, generate customer reviews and boost your notoriety…
Alix OUDIN, Head of Marketing & Communication at BeezUP
Elise BONNO, Customer Success Manager at BeezUP