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How to know if your business needs to sell in an e-marketplace?

The e-marketplace is a powerful and massive sales channel.

Amazon, Ebay, AliExpress or Privalia are already large platforms that group numerous online stores to connect buyers and sellers and also have a great impact on the purchasing decisions of customers.  For many organizations, especially those that do not have online stores, it is advantageous to sell in these “online shopping malls”.  But, is the decision really valid for all e-commerce?

 Both for SMEs and for large companies and multinationals, e-marketplaces offer great advantages for selling online.  Let us think, for example, of the possibility of:

  • Having a massive sales channel: It is attractive for companies that have their own e-commerce because their sales channels are expanded. It is even an excellent option for those products that, for some reason, have not had the expected output in your online store.
  • Internationalizing your products: Since it is a channel with so much sales volume, e-marketplaces can help thousands of people around the world become interested in your offers. Selling from an e-marketplace greatly facilitates export procedures because most of these online shopping malls have agreements with parcel agencies, which allows them to lower the cost of deliveries.
  • Studying the impact of your offers: Do not lose the possibility of collecting all the information on the quality and prices of your products in the e-marketplaces, through the comments that reach these platforms where millions of people buy.
  • Generating earnings due to association with other brands: This happens, for example, when a user who is looking for shoes finds your socks offers through other related products. 

But, be careful… keep in mind that selling from these platforms can bring about some disadvantages such as: 

  • Complexities to do branding: Consolidating a brand and differentiating yourself from other brands in this type of platform is usually complicated because competition is practically next to you. Even in many of these e-marketplaces, brands are ordered by the number of purchases their products have. All of this practically forces you to constantly adjust and cheapen the prices of your offers to make them more competitive.
  • Reduced profit margins: To be on their platforms, e-marketplaces require the payment of monthly fees and sales commissions. It can also become even more expensive if e-commerce involves stocking and delivering goods.
  • Zero freedom to advertise your products: Most of the e-marketplaces have their own rules on how the images, descriptions and the content that you put there should go. So, in general, it leaves you very little margin to freely present your offers.

That said, how do you know if your business should be there?

 It is probably advantageous for a company that starts with few sales levels to be on this type of platform in order to gain confidence and visibility among customers.  But before deciding to take the step, think first if you have the budget to sell in an e-marketplace.  If you can do it, there’s no problem.  You will have all the advantages mentioned above.  However, you should always try to assess what type of products you are going to offer taking into account the net margin of profitability you have with each of them. 

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