The ecommerce market is growing rapidly, and new players are entering the field all the time. This means sellers now have more options than ever before when it comes to selling their products online.
If a seller wants to take advantage of this booming market, it’ll likely involve selling their products on a third-party ecommerce site like Amazon or another online marketplace.
Selling on a marketplace isn’t for everyone, but for sellers who meet the requirements and are willing to give up some control over their product and brand, it can be a great way to put your goods in front of a wider audience.
Read on to learn more about why you should sell on an ecommerce marketplace, which marketplaces are worth your time, what you need to know before signing up with any marketplace as well as Insider tips from experienced sellers who have been there before.
Selling on marketplaces can open up new customer bases for your brand and give you access to a range of new customers. However, selling on marketplaces is often challenging. Marketplaces usually only accept the very best sellers, so it’s be easy to get accepted.
In addition, they are highly competitive and you need to have a strategy in place before you begin the application process.
1. Know the Basics Before You Jump In
Before you jump into a marketplace, you should have a clear understanding of the marketplace’s basic features, how sellers can use them, and the kinds of sellers who are already there.
This will help you determine whether or not a marketplace is a good fit for your brand, and will help you get the most out of your investment of time and resources. You should know as much as possible about the following factors:
- marketplace sales commissions,
- seller requirements,
- product requirements (like number of SKUs),
- seller customer service guidelines,
- customer service expectations,
- marketplace search functionality, and
- marketplace seller insights.
2. Find Out Which Brands Are Currently Selling on the Marketplace
Depending on the marketplace you’re selling on, you might see a lot of competition from brands similar to yours. This can be good or bad for your business. In general it’s better to have additional sellers in your niche so that you can piggyback off of each other’s marketing efforts. This can help you get more traffic and sales.
On the other hand, more sellers in your niche means more competition. This can make it more difficult to rank your products in search engines and get your products discovered by buyers who aren’t actively looking for what you have to offer.
You can look at the other products currently selling on the marketplace to get a sense of how many other sellers are in your niche, as well as their price points, product categories, and SKUs. This can help you determine if the marketplace is a good fit for your product.
3. Determine if a Marketplace is Right for Your Brand
As you research different marketplaces to sell your products, you might notice that some marketplaces have strict requirements that don’t fit your brand or products. You’ll want to pay attention to these requirements so that you don’t waste your time on a marketplace that isn’t a fit for your brand.
For example, you might find a marketplace that has strict quality requirements, but you might sell a product line that is fine with a level of quality that doesn’t meet these requirements.
Or you might find a marketplace that has high sales expectations, but you might not be able to meet those expectations with your product. Some marketplaces might be a great fit for your brand, but they might not be a good fit for the products you want to sell.
If a marketplace is right for your brand but not right for the products you want to sell, you can try to sell multiple products on the same marketplace.
For example, if you sell baby apparel and baby furniture, you might want to sell both of these products on a marketplace that only allows baby products. This can be tricky, but it can also be a great way to diversify your sales and increase your total sales volume.
4. Commit to a Long-Term Strategy
When you decide to sell on a marketplace, you need to plan to stick with it for the long haul. Depending on the marketplace you choose, you can make a quick profit from selling your products on the marketplace and then remove your listing. But many marketplaces encourage long-term selling. You want to commit to selling on a marketplace long-term for a few reasons.
First, it takes time to build up your brand on a marketplace, and you can’t do that if you’re switching between different sales channels.
Second, it takes time to get your product(s) listed on the marketplace and start generating sales. Find a marketplace that supports long-term sellers who are committed to growing their brand and product lines.
A marketplace that encourages long-term selling will be far more beneficial to your business in the long run, especially if it has a loyal customer base.
5. Set Realistic Expectations and Goals
Before you commit to selling on a marketplace, you should set realistic expectations for the sales you’ll make and the revenue you’ll make from selling on the marketplace. You should also set goals for the kinds of products you want to sell, the amount of time you want to spend selling your products on the marketplace, and the amount of money you want to make from the marketplace.
Marketplaces can be lucrative sales channels, but they can also be competitive and difficult to get noticed on. Depending on the marketplace you choose and how much time you invest in growing your business on the marketplace, you might make very little to a decent amount of money from your marketplace sales.
Some marketplaces have high sales expectations, and others have lower expectations for sales. You can get a general idea of the sales expectations for the marketplaces you are considering by researching online.
6. Get Expert Help and Product Reviews
If you’re new to selling on a marketplace, you might want to hire an expert who can help you get set up, write your product listings, and help you get your products in the right places. You can also hire experts to do customer service for you.
This way you can save time and energy by focusing on other tasks that are more central to your core business. Some marketplaces even provide product experts who can give your products honest reviews.
This can come in handy if your products are new to the marketplace, or if they’re experiencing lagging sales. Product reviews can help boost your sales, as they can be a real boon to your search engine optimization.
7. Don’t Forget About SEO and A/B Testing
Depending on the marketplace you choose to sell on, you might have more control over your product listings than you would if you were selling your products directly on your own site. This can be a good thing, but it can also be a bad thing if you don’t know what you’re doing. You’ll want to optimize your product listings for search engines.
Depending on the marketplace, you might be able to use your product title, image, and description to your advantage when it comes to SEO, but you’ll want to check with the marketplace to make sure you’re not breaking any rules.
You should also test out different product listings, images, and descriptions to see what drives the most sales and improves your conversion rate. This can be a great way to increase sales without having to spend more money on advertising.
8. Don’t Overrely on the Marketplace for Sales
Although selling on a marketplace can drive more traffic to your site and increase your sales overall, it’s important to diversify your sales channels. You don’t want to put all your eggs in one basket. You don’t want to be overly reliant on a single marketplace for all of your sales.
Depending on the marketplace you choose to sell on, you might be able to sell your products directly from your website, or you might have to rely on the marketplace’s website. If you have to rely on the marketplace’s website, you won’t be able to directly control traffic to your website or conversion rates.
This can be beneficial in some ways, but it can also be a huge downside if the marketplace is less than helpful.
9. Research and understand your marketplaces of choice
Before you commit to selling on a marketplace—or even before you start researching which marketplaces to sell on—you should understand your core business and how it can be sold effectively. You should also understand your customer base and who they are.
You can use this information to determine which marketplaces would be a good fit for your products. You should research each marketplace you’re considering by looking at their website, reading reviews from sellers and customers, researching other sellers on the marketplace.
10. Know What You’re Getting Into
This is the first—and most important—marketplace selling tip. Before you jump into the world of selling on a new sales channel, make sure you know the ins and outs of this marketplace. How is it different from your existing sales channels? What are the rules and regulations? How will you be able to update your listings?
What kind of product mix is appropriate for the marketplace? Once you are clear on what you’re getting into, you’ll be in a much better position to maximize your sales on this channel. A good marketplace is intuitive and easy to use, with a wide variety of products but also room to build a brand presence.
If you have to constantly refer to the marketplace’s help center or if there’s not much room for you to brand your store, then it’s probably not a good fit for your business. Likewise, if you have to jump through hoops to get your product approved for the site, or if there’s a ton of competition for your chosen category, then you may want to look for a different marketplace.
11. Decide Which Channel is Right for You
Are you selling new or used products? Do you have a wide variety of inventory or is your selection limited? Are you selling a B2C or B2B product? The answers to these questions can help you decide which marketplace is a good fit for your business.
- New product marketplaces – If you’re selling new products, then you may want to consider selling on a marketplace that specializes in new products—like Amazon. With Amazon, you can also leverage Fulfillment by Amazon (FBA) to store, pack, and ship your products.
- Used product marketplaces – If you have a large collection of used products, then you may want to consider selling on a marketplace that specializes in used goods—like eBay. With eBay and other sites like Craigslist, though, you won’t have the same level of support, reporting, or approval that a marketplace like Amazon might offer.
- B2C vs B2B marketplaces – Then, there’s the difference between B2C and B2B marketplaces. B2C marketplaces like Amazon are best for products that are purchased by end consumers. B2B marketplaces, on the other hand, are best for products that are purchased by other businesses—like Industrial Supply or Auto Supply marketplaces.
12. Make sure your product is a good fit
As with any sales channel, you want to be sure that your product is a good fit for the marketplace. For example, if you’re selling a home goods product, you may not want to sell it on a marketplace that specializes in industrial goods or automotive parts. Likewise, if you’re selling an apparel product, you may not want to sell it on a marketplace that specializes in electronics.
There are a few ways to determine if your product is a good fit for a given marketplace. One way is to look at the current products in your chosen category. If those products are similar to yours, then your product may be a good fit.
Another way to determine if your product is a good fit is to contact the marketplace and ask. While you won’t be able to talk to a representative from every single marketplace, many of the larger marketplaces have a contact form where you can ask about selling on their site.
13. Pick the right strategy for your business
One of the first decisions you’ll need to make as a seller on a given marketplace is whether or not to use FBA (Fulfillment by Amazon). With FBA, Amazon will store, pack, and ship your products to customers on your behalf.
While FBA can be a tremendous help for sellers, it does come with some added obligations: You’ll need to pay Amazon for storage space and packing costs, and you’ll need to follow their rules for product condition and packaging.
Similarly, if you want to list your products in Amazon’s Prime program, you’ll need to be prepared to meet those requirements as well. If you’re a new seller, you may want to start with FBA and Prime to boost your product sales quickly.
If you’re an established seller, however, you may want to look for other ways to boost your product sales—like promoting your products in sponsored ads, reaching out to wholesale buyers, or leveraging a marketplace’s advertising options.
14. Set up your listings correctly
One of the first steps in selling on a marketplace is to create an account and list your products. If you’re using FBA, you may also want to create a shipping plan. Once your products are listed on the marketplace, you’ll need to maintain those listings by keeping them up-to-date, adding new product (if applicable), and communicating with buyers.
You can easily update your listings by logging into your marketplace account. Here, you can also respond to customer questions, track and manage your inventory, and view analytics. Most marketplaces will also allow you to create variations of your product listings to make it easier for customers to find what they’re looking for.
15. Leverage existing tools and resources
No matter which marketplace you decide to sell your products on, you can use other resources to help you sell more effectively. For example, if you’re selling your product on Amazon, you can leverage Amazon Marketing Services to advertise your products for free. Likewise, if you’re selling on one of the other major marketplaces, you can use that marketplace’s built-in advertising tools.
You can also use sales channels that aren’t marketplaces to help you sell your products more effectively. For example, if you’re selling on Amazon, you can use Facebook and Instagram to grow your brand presence. Likewise, if you’re selling on Shopify or another ecommerce platform, you can use those tools to help you sell your products on a marketplace like Amazon.
16. Adjust your pricing strategy
One of the best ways to maximize your sales on marketplaces like Amazon and eBay is to price your products competitively. That doesn’t mean that you need to always price your products at rock bottom prices, but you do need to price them competitively.
When pricing your products, consider what other sellers are charging in your category and how much shipping costs. You’ll also want to take a look at your profit margins and see what they suggest you charge.
While you don’t necessarily need to price your products at their suggested price, you’ll want to be close enough to other sellers’ prices so that you don’t lose sales due to price.
17. Determine what will happen to your inventory
When it comes to selling on marketplaces, the biggest question that many sellers have is “who owns my inventory?” In other words, if you sell products on a marketplace like Amazon, does Amazon own your inventory?
Or does your company own the inventory? In some cases, the marketplace may actually take ownership of your products—particularly if you use FBA. After all, once you ship your products to Amazon’s warehouses, those products are no longer your responsibility.
In other cases, the marketplace may simply be holding onto your inventory until it sells. Whatever the case, you’ll need to be aware of how the marketplace’s rules and regulations apply to your inventory.
You’ll also want to make sure that you’re accurately accounting for your inventory so that you can make smart decisions with your supply and expenses.