What are the benefits of marketplaces?

Matching marketing need with marketplace

 

Selling via online trading platforms is a strategic choice. The choice for a marketplace must fit into the marketing and distribution mix of the retailer or product brand. The main question is what the main goal is for selling via an external marketplace. Is the primary goal traffic generation, or building brand recognition in a new market, or should the platform become an additional outlet channel? The figure below provides an overview of the most common goals for selling via an online marketplace.

Depending on the main goals, one can determine whether a certain platform matches these goals. An important question is always, if the image of the brand is strengthened or at least not harmed by the platform image, and if the own brand can sufficiently be explored within the platform. A shop-in-shop normally provides more opportunities for branding then when all products are only presented in a mix with comparable items of competitors. The other question is what your products will distinguish from competing items, or whether any exclusivity can be guaranteed.

 

Using Marketplaces to go cross border

 

Using marketplaces and platforms is a strategy to sell cross-border (facilitating international expansion). This is a relatively easy way to sell products for the first time online abroad. Most of the companies who are doing this, are using this to test whether their products are popular in a particular country. If this is the case a company can decide to open their own, translated!, website with more products online.

A company can decide whether they want to go cross-border by themselves or by outsourcing it. The biggest advantage of doing it by yourself (insourcing) is that you have total control over the whole process. A disadvantage is that you need to have the sources (skills and money f.e.) and it is time consuming. You also need to have a lot of knowledge of the market before you want to enter it.

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