How to Sell on Marketplaces: Key Points for Getting Started

Marketplaces continue to gain ground in France and around the world thanks to the digital boom experienced in recent years, particularly following the COVID-19 pandemic. According to Mirakl’s “2021 Enterprise Marketplace Index” study, “they recorded year-over-year growth of 81% in the fourth quarter [of 2020], twice the rate of the overall e-commerce sector.” This rapid growth continued for two consecutive years, according to the 2022 edition of this report.

In practice, the rise of this e-commerce sales model creates numerous opportunities for merchants, who can take advantage of marketplace traction to increase their sales volume and brand awareness. However, selling on marketplaces represents a real challenge. It is therefore essential to understand the market in order to prioritize the relevant actions for each area of activity.

In this first article, our experts present best practices to help you choose the best options for launching your brand on marketplaces, whatever they may be.

Key Points to Understand How to Sell on a Marketplace

To optimize your business and increase online sales, you need to ask yourself a few questions to identify your needs.

Calculate Your Profit Margin

Among the objectives you need to set, the first is undoubtedly to remain profitable, regardless of the marketplace model you choose. Before any launch, it is therefore essential to know your profit margin. How do you know whether your business is profitable? Calculate the gross margin of your e-commerce site and estimate the costs related to commissions charged by the marketplace as well as the marketing levers you want to activate. You will need to find the right balance between volume and margin, then define the objectives to achieve.

Define a Balance Between Your Website and the Marketplace

Selling on a marketplace will have an impact on the activity of your e-commerce site. Do you want to prioritize sales on your website and use the marketplace to increase brand awareness? Do you want to prioritize marketplaces in order to generate a higher volume of sales? Or, on the contrary, do you want to find a balance between your website and the marketplace? It is up to you to define your strategy to achieve the desired result.

Choose the Best Marketplace for Your Brand

With more than 1,000 marketplaces in France, a wide range of possibilities is available to you for developing your business, but choosing the ideal platform requires careful consideration. Which one best matches your brand and your product range? A generalist, mass-market marketplace, or a niche marketplace specialized in a particular area, such as Zalando, ManoMano, or Fnac? Analyzing the competition and marketplace market statistics will help you find the platform best suited to your business.

Consider How You Want to Use the Platform

Do you want to activate marketing levers and deploy paid advertising campaigns or, on the contrary, take advantage of SEO and benefit from organic visibility? Estimating the business potential and the competition already present on your target marketplaces will allow you to prioritize the actions to take and define the marketing strategy to implement.

Choose Your Business Model

When a seller decides to launch on a marketplace, they must choose the business model that interests them: a 1P seller or a 3P seller. The relationship with the platform differs depending on the selected sales model.

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 therefore become its suppliers. The marketplace manages the prices applied as well as product shipping, with products displaying the “Ships from and sold by Amazon” badge. The merchant, meanwhile, retains control over the creation and modification of product pages.

The 3P sales model offers two operating methods for merchants who, in this case, work through Seller Central:

• Fulfillment by Merchant (FBM): The seller retains control over logistics, product page creation, and shipping of items, which are marked as “sold and shipped by” followed by the merchant’s name.
• Fulfillment by Amazon (FBA): Amazon handles order processing and shipping, as well as after-sales service and product returns. Products included in this program display the “Fulfilled by Amazon” badge, and the seller benefits from Amazon’s worldwide reputation as well as a fast and efficient delivery service.

This program also exists at ManoMano under the name Mano Fulfillment and at CDiscount under the name CDAV, or CDiscount à volonté.

Feed Manager’s Expertise to Help You

Would you like to start selling on marketplaces? Do you want to understand the impact on your e-commerce site? Do you need an analysis of the competition and market statistics? Our experts can support and advise you on the strategy to implement 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 support with logistics and strategic matters. They can also manage your marketplace advertising campaigns.

To get the most out of your use of marketplaces and your investment, we invite you to contact Johann Lucas, our Business Developer: lucas@labelium.com.