Marketplaces are constantly gaining ground in France and worldwide thanks to the digital explosion experienced in recent years, particularly following the COVID19 pandemic. According to the study " 2021 Enterprise Marketplace Index " by Mirakl, "they had grown 81% year-over-year by the fourth quarter , twice as much as the online retail sector." A meteoric growth that is sustained for two consecutive years according to the 2022 edition of this report.
In practice, the rise of this e-commerce sales model is resulting in numerous opportunities for merchants who can take advantage of the traction of marketplaces to increase their sales volume and gain notoriety. However, selling on marketplaces is a real challenge. It is therefore essential to understand the market in order to prioritize the relevant actions for each field of activity.
In this first article, our experts present the best practices to help you choose the best options to launch your brand on any marketplace.
Key points to know how to sell on a marketplace
In order to optimize your business and multiply online sales, it is necessary to ask yourself some questions to target your needs.
Calculate your profit margin
Among the objectives you must set for yourself, the first is undoubtedly to remain a winner, regardless of the marketplace model chosen. Before any launch, it is therefore essential to know your profit margin. How to know if your business is profitable? Calculate the gross margin of your e-commerce site and estimate the expenses related to the commissions taken by the marketplace as well as the marketing levers you wish to activate. You will have to find the balance between volume and margin, then define the objectives to be reached.
Define a balance between your site and the marketplace
Selling on a marketplace will have an impact on the activity related to your e-commerce site. Do you want to prioritize sales and rely on the marketplace to gain notoriety? Do you want to prioritize marketplaces in order to achieve more sales volume? Or on the contrary, do you want to find a balance between your site and the marketplace? It's up to you to define your strategy to achieve the desired result.
Choose the best marketplace for your brand
With more than 1000 marketplaces in Francea wide range of possibilities is available to you to deploy your activity, but the choice of the ideal platform is not made without prior reflection. Which of them best suits your brand and your product typology? A generalist marketplace, i.e. one that is widely available, or a niche marketplace, i.e. one that is specialized such as Zalando, ManoMano or even Fnac? The analysis of the competition and the market statistics of the marketplaces will help you to find the most adapted to your activity.
Think about the use of the platform
Do you want to activate marketing levers and deploy paid advertising campaigns or, on the contrary, do you want to take advantage of SEO and thus benefit from organic visibility? Estimating the business potential and the competition already present on the target marketplaces will allow you to prioritize the actions to be taken and to define the marketing strategy to be implemented.
Choose your business model
When a seller decides to launch on a marketplace, it is up to him to choose the business model he is interested in: 1P seller or 3P seller. Depending on the selected sales model, the relationship with the platform differs.
In the case of Amazon, for example, the leading marketplace in France, 1P merchants use Vendor Central and sell their goods to the marketplace. They thus become its suppliers. The latter manages the prices applied as well as the shipping of the products, which display the badge "Shipped and sold by Amazon". The merchant, on the other hand, keeps the hand on the creation and modification of the product sheets.
The 3P sales model offers two modes of operation for merchants working, this time, in Seller Central:
- Fulfillment by Merchant (FBM): The seller retains control of the logistics, creation of product sheets, and shipping of items that are marked as "sold and shipped by" followed by the merchant name.
- Fulfillment by Amazon (FBA): Amazon handles the processing of orders it ships as well as customer service and product returns. Products in this program display the "shipped by Amazon" badge and the seller benefits from Amazon's global reputation and fast, efficient delivery service.
This program also exists at ManoMano under the name of Mano Fulfillment or at CDiscount, under the name CDiscount, under the name of CDAV, or CDiscount at will.
Feed Manager's expertise to help you
You want to launch on marketplaces? You want to know the impact on your e-commerce site? You need an analysis of the competition and market statistics? Our experts can accompany you and advise you on the strategy to apply to improve your results. You can entrust them with the creation of your products, the management of your catalog (in terms of integration, daily checks and optimization) and the accompaniment on logistical and strategic issues. They can also offer you the management of your advertising campaigns on marketplaces.
To get the most out of your marketplace use and investment, we invite you to contact Johann Lucas, our Business Developer: firstname.lastname@example.org.