Do you run a brick-and-mortar business without a website? Or are you a small business owner with an online presence but want to expand beyond your website? A good strategy to grow your sales is to cast a wider net in search of new customers and make a plan to start selling on both popular and niche ecommerce marketplaces visited by millions of shoppers every day. One thing’s for certain —more and more people are shopping online every day. Selling in an online marketplace should be part of your selling toolbox.
Selling Online: Ecommerce Platform vs. Online Marketplace
When it comes to the best online marketplaces, you have a few options — selling via an ecommerce platform or a marketplace site. Here are the differences between the two.
This is basically like your business stand-alone website. You not only sell your product, but you can also check on your inventory, shipments, order with vendors and even provide support and customer service to your shoppers. There are a number of online providers that can integrate your business into their platform and host your website for fees that cover a range of services. Shopify, one of the most popular ecommerce websites, is one example. You can set up shop for a monthly fee of $29.99 for the basics and a top-level free of $299 for Advanced Shopify. The main benefit of selling through an ecommerce platform is that they take care of your tech issues, including maintenance, bugs and updates. Other examples of ecommerce platforms include Wix, Squarespace, Prestashop, Woocommerce, BigCartel and ECWID.
For a fee, these ecommerce platforms will build your website and meet your tech needs, allowing you to get to the business of selling your products and services. However, you will be responsible for driving traffic to your ecommerce site, which can prove difficult as a new online store.
Unlike an ecommerce platform that hosts your website, an online marketplace is like a digital flea market. The person that hosts the flea market does not own any of the products but helps bring buyers and sellers together under one common digital roof. Where Shopify was our main example for an ecommerce platform, eBay will fit this role for the online marketplace. You can sell your products on eBay, but there is a cost to this service, such as fees for posting your product and for the successful sale of your product. This popular marketplace also offers great exposure to buyers looking for products, but you will also need to compete with others who are selling similar items. This competition will be influenced by your selling price, customer reviews and other perks that you may want to offer, including free shipping.
In addition to eBay, other examples of online marketplaces include Amazon, Etsy, Storenvy, Walmart, Bonanza and Newegg.
The Best Online Marketplaces
In 2020, $2.67 trillion were spent globally at the top 100 online marketplaces. The gross merchandise sales grew 29 percent at these online marketplaces from 2019 to 2020. With the worldwide pandemic, these numbers will likely go even higher, considering that online shopping has become the preferred way to purchase goods and products.
Now it's time to narrow it down and highlight the best places to sell online. Whether you already have an ecommerce website or not, expanding your reach into other marketplaces is a solid choice for growth. Here are eight popular online marketplaces and the key points of consideration if you choose to sell there.
First launched in 1995, eBay was a favorite for those trying to sell used goods, but it has since evolved into a powerful market for businesses looking to expand their target audience. With over 183 million active buyers and revenue that amounts to $10.8 billion, eBay is one of the largest online marketplaces. The site is easy to navigate, accessible to mobile shoppers and also provides a pleasant experience ranking high in customer satisfaction with a 78 in the most recent American Customer Satisfaction Index (ACSI). You can create a free account on eBay, but you must pay 10 percent of every sale, as well as a $0.35 listing fee for each item posted. For a monthly fee, you can also opt to participate in the eBay Sellers Hub and launch promotions, use their marketing tools and conduct market research.
Unlike eBay, Etsy caters to a more select market and promotes handicrafts and vintage products. But although the focus is narrow, the market is still huge with 2.5 million sellers and 50 million buyers. There is no monthly fee to sell on the marketplace, but there is a 5 percent charge on all transactions and a $0.20 product listing fee. There are also a number of rules when it comes to selling on Etsy, including what can be classified as vintage and what can’t be sold on the site.
This trusted and popular marketplace has grown into one of the most popular third-party market sites with $386 billion in retail sales in 2020. Amazon also offers Amazon Prime, which is a membership service with 112 million subscribers paying an average of $1,400 a year. The strong number of close to 250 million worldwide browsers and buyers on Amazon has attracted close to 5 million sellers who are using this marketplace to optimize on sales. It is important to keep in mind that the rules to sell are strict and that there are costs to selling through this marketplace, including listing, inventory, fulfillment, referral and selling plans.
With over 11,300 stores operating in 27 countries and serving more than 270 million customers each week, Walmart is also a big player in the online marketplace. In 2009, Walmart marketplace launched, opening up the Walmart.com platform to sellers looking to expand their business. In 2020 alone, it saw a 78 percent increase in ecommerce growth, and much like the brick-and-mortar stores, this online platform provides an outlet for a wide range of products in categories that range from toys to clothing to home goods. Selling fees also range depending on the types of products.
Unlike Walmart, eBay and Amazon, but more in line with Etsy, Newegg can be considered a niche marketplace with a specialized category covering tech. Founded in 2001, Newegg has reported revenue of $3 billion, and with 32 million buyers worldwide, sales are projected to grow significantly in the coming years. Like the other major online marketplaces, Newegg provides shipping and fulfillment services. Newegg also offers three levels of seller plans, including standard, professional and enterprise, each at different price points and commission fees that will vary according to the category of product sold.
Founded in 2002 as CSN Stores, the company changed its name in 2011 to the more appealing and market-friendly Wayfair. In 2020 it generated revenue of $14.1 billion, and with over 11,000 global suppliers, it is the place to go if your business sells furniture, rugs, appliances, bedding or anything else associated with home goods. Unlike many of the other marketplaces, sellers on Wayfair do not pay a fee for each product sold. Instead, Wayfair pays the third-party seller the wholesale price and then Wayfair sets the retail value. There are also no shipping costs and Wayfair allows for a dropshipping model.
This marketplace initially started with a focus on clothing, shoes, and accessories but has since expanded its categories to include home goods, pet products and beauty and wellness supplies. Selling on Poshmark is easy, especially if you have a smartphone. All you need to do is download the app, take a picture of what you want to sell, and provide a description and price. Once your item sells, Poshmark will send you a pre-paid shipping label. (You will still have to pack the merchandise and go to the post office.) Seller fees are steep for the added convenience of the app, with a flat fee charge of $2.95 for items under $15 and a 20 percent fee for items sold for $15 and above.
This site works the same way as Poshmark. Use the app, take a picture of your item, provide a description and set a price. Unlike Poshmark, however, you can practically sell anything on Mercari, new or used. Its website also points out that over 350,000 items are listed for sale each day. Although there are no fees when it comes to listing an item, Mercari charges 10 percent of the sales price for each item sold. In addition, sellers are charged 2.9 percent plus $0.30 for each payment received.
Use Multi-channel Selling for the Best Approach
Having a multi-channel selling strategy utilizing both ecommerce platforms and online marketplaces is the best path to follow. You’ll need to go over your options and make sure that the fees are not prohibitive, the services will benefit your business and the online selling outlets are easy to use.
Using a multi-channel approach will expand your customer reach and provide you with alternative channels in case something goes wrong, such as your website or payment processor going down. Multi-channel selling will help you multiply your sales, especially during holiday seasons or key selling periods of the year. This approach is the future of selling, especially when clicking the “buy” button is just a thumb tap away.