Marketplaces. Pros and cons

Marketplaces. Pros and cons

If you are an online retailer, the question then arises – what marketplace to choose to boost your sales and blow your competitors out of the water. Nowadays there are plenty of different marketplaces, and in this article, I would like to discuss all advantages and disadvantages for you to decide whether join their community of merchants or no.

What is a marketplace?

The marketplace acts as a digital middleman that connects both buyers and sellers. Examples include platforms such as Airbnb, Uber and eBay. All of them have major variety of goods for sell and customers sometimes prefer it to a small shop as they have bigger choice.

My personal recommendations

Before going deep, I would like to note it really matters what kind products do you sell when choosing the right marketplace (as there are marketplaces specialized in different fields, there niche marketplaces and so on). I also strongly advise you to start step by step, not do start to work with several ones, as you have to know how to manage your products and stock correctly, and then in future, only if you master your sales, join other marketplaces.

Why to start to work with other marketplaces

1. It brings new exposure to your brand

This works well if you are new player in the market and your online store is not popular yet.

2. Large traffic

Nowadays all marketplaces have huge volume of traffic of consumers, they are usually big companies, or even conglomerates, so they have powerful marketing campaign to keep boosting its traffic.

3. More sales, hence profit

Marketplaces usually have big traffic, and if you configurated your pages correctly, set right price category for your goods, put winning description, then you have all chances to start to sell immensely, what automatically means more profit for your business.

4. Trust

People usually trust companies with transparent reputation and name, usually all existing marketplaces are stable players in a market. People usually trust them more than new shops. Moreover, there is a high probability that they have already purchased something before and had easy experience. So, if you are a new online shop, then a marketplace with good reputation can be a good idea for your business.

However, together with advantages, there is other side of a coin. Basically, main disadvantages of selling in marketplaces are:

1. High fees

To start to sell in marketplaces is not for free, every platform has different conditions, some take percentages, other charge fees for listing. So, if you are not sure about the product, better to prepare more before start joining its community.

2. Stock control

Stock control and its synchronization is a major problem in my point of view. Apparently, you have to update the Excel stock manually every day and check if there were any sales in different point of sales which is a massive work to do unless you have great developer team who can synchronize it through API.

So, these were pros and cons of marketplaces in general, I hope this article will be useful for you and having all this information in mind you can make the right decision! Good luck in your sales! Share in the comments below your thoughts about marketplaces! If you have your question, I would be glad to answer it or to introduce your project to my team at Astorts Group to be evaluated