What is the impact of marketplaces?
There are plenty of national and international marketplaces active in the global ecommerce sector, including Alibaba, Rakuten, Tmall, eBay, Amazon and PriceMinister. Retailers and brands choose to sell through marketplaces for various reasons.
Marketplaces offer a proven infrastructure to start selling in a new market. They are thus an interesting way to test a new market without taking a big business risk. Many marketplace operators offer (paid) services such as payment processing, fulfilment, returns handling, warehousing, marketing and even multi-lingual customer service. In addition, there is a lot of search traffic on market places, which will make products turn up more quickly with a larger audience than when selling via a newly launched webshop.
The downside is that marketplaces are expensive: sellers pay commission and they have to stick to the rules of the platform. Still, marketplaces are a good sales channel in the following cases:
- market entry: testing demand
- market entry: gaining brand awareness
- complimentary sales channel: creating brand awareness, larger audience
For more information about international marketplaces, please refer to our topic Marketplaces.