Marketplace vs. online store • 17.06.2019

Choosing the right marketplace for your business: A profitable niche product is key

"Platform strategies are critical for success," says Dr. Kai Hudetz of the IFH Cologne (Institute for Trade Research)

Man smiling in front of a camera
Caption: "It's ultimately a mix of different approaches that attracts the customer.”
Source: iXtenso/Mörs

Ebay or Amazon, Zalando or Otto? Retailers have many options when it comes to an online marketplace where they can sell their merchandise. Success for retailers hinges on making good choices.

Dr. Kai Hudetz, CEO of the IFH Cologne, gives tips on what to look for when you make this choice and reveals the importance of online stores and social media as customer service channels.

Dr. Hudetz, should retailers use an online marketplace?

Dr. Kai Hudetz: Yes, I believe platform strategies are critical for success, especially if you are starting out as a retailer and want to expand your sales footprint. It's more difficult to scale your own online store than to grow by selling on an online marketplace. If businesses don’t have money to spend on Google solutions, it becomes increasingly difficult to be noticed by customers in the first place. Online marketplaces provide many tools and opportunities to accomplish this goal.

How do you find the best marketplace to sell your items?

It means doing a lot of research and gathering information. Most marketplaces publish metrics on how many retailers, manufacturers, and products they have. However, this is rarely the deciding factor. The only thing that’s important is the size of the demand side!

Comparing Amazon and eBay. How do they differ?

Amazon is fast becoming the place to buy life’s necessities. All products have the same description. The box in the top right-hand corner lists prices and availability. Ultimately, this is what it all comes down to. The customized approach is eliminated. Meanwhile, I believe eBay customers tend to look for items that are somewhat more exotic or unique, and they also use the platform to compare different sellers. And then there are niche and industrial distribution marketplaces that cater to different topics and specific products of interest.

How do you sell successfully on marketplaces?

The trick is to be as unique as possible and to determine the optimal product mix to be profitable in the marketplace. Generally, these tend to be more exotic items as opposed to mainstream products. The key is to find the perfect niche in the market.

Two people in front of a laptop
Finding the right online marketplace for you requires a lot of research and time, but can be worthwhile for merchants.
Source: PantherMedia_AndreyPopov

Do you have any other tips on finding a great product-market fit?

Retailers need to study how and where their products and related categories fit in the marketplace and ask themselves whether they are competitive in this environment and if this marketplace is the right fit for their business. Can you differentiate yourself from others? Are you in a price war and how intense is it?

Having said that, there is a conflict of objectives between the marketplace operator and the entity that wants to be a successful seller. Marketplaces actually have a conflict of interest because the more product choices they offer, the more attractive they are to customers.

There is a widespread fear of becoming too overly dependent on one marketplace. Is this worry justified?

Absolutely. I don’t want to paint a bleak picture, but there are documented cases where accounts were blocked or suspended by marketplaces. This can put someone who depends on this marketplace and doesn’t have revenues for several weeks in a very difficult situation.

Can a marketplace operator block accounts for no reason?

They cannot block accounts for unsubstantiated claims. However, it can be somewhat difficult for major large companies to clarify the issue and determine that the account should not have been blocked in the first place. Yet this really doesn’t help the seller who lost money in the process.

What’s your advice?

Small businesses should rely on one platform, but not be completely dependent on it. It is critical to also find other ways to reach customers. You must build a strong brand identity to where customers explicitly look for you on the marketplace, regardless of price and delivery.

What other ways or channels are you referring to in this case?

I suggest having your own online store and utilizing social media for your business. The consumer path from social media to purchase has become ever shorter in the past few years. This is a great opportunity for sellers who know how to present themselves on these types of channels. Many bloggers have managed to run successful one-man enterprises this way. Another great idea is to use social media influencers to promote your retail business. This allows retailers to avoid price comparisons, build trust and boost interest.

The online store will become a hygiene factor for anyone who wants to achieve success in business in the next ten to fifteen years. You have to be increasingly smarter to get your piece of the pie.

Interview: Natascha Mörs, iXtenso – Magazine for Retailers

related articles:

popular articles:

Thumbnail-Photo: Leveraging the smartphone – mobile shopping...
13.06.2019   #mobile shopping #mobile couponing

Leveraging the smartphone – mobile shopping

67 percent of consumers are likely to shop with a retailer that offers mobile coupons

The proliferation and convenience of mobile devices has completely changed shopping behaviors and elevated customer expectations.Mobile shopping will continue to grow as 41 percent of consumers in the BRP Consumer Study indicate they plan to ...

Thumbnail-Photo: Computer-generated imagery: better and faster product photography for...
12.04.2019   #online trading #digital marketing

Computer-generated imagery: better and faster product photography for online stores

David Wischniewski on the possibilities of product visualization

Product photography is essential to the success of any online store. Unable to provide haptic feedback, retailers are tasked with inspiring their customers to buy. This can be an expensive endeavor in the long run. Digitally created renderings of ...

Thumbnail-Photo: Consumers demand sustainable fashion but won’t pay more...
28.06.2019   #sustainability #fashion

Consumers demand sustainable fashion but won’t pay more

Top five demands for the industry to become more sustainable

New research suggests over half (52 percent) of consumers in the UK and US want the fashion industry to become more sustainable, with calls for reduced packaging and fair pay for workers among their top demands. But only 29 percent of these ...

Thumbnail-Photo: NRF: retail sales in April
24.05.2019   #online trading #retail

NRF: retail sales in April

Slower tax refunds and weather affect April retail sales

Retail sales were down 0.2 percent in April seasonally adjusted from March but up 5.2 percent unadjusted year-over-year, the National Retail Federation said today. The numbers exclude automobile dealers, gasoline stations and ...

Thumbnail-Photo: Digital food retail: customers expect more personalization...
07.06.2019   #personalization #food delivery service

Digital food retail: customers expect more personalization

New research sponsored by precima shows retailers must act quickly to develop a detailed understanding of shopping missions.

The fast-changing dynamics of the food retailing environment continue to challenge companies to keep pace with fast-changing shopper demands. The latest of these shifting shopper requirements involves their behavior on digital platforms and is ...

Thumbnail-Photo: Implementing new ideas: Design thinking in the retail world...
29.04.2019   #customer satisfaction #trend research

Implementing new ideas: Design thinking in the retail world

Focus on customer expectations

It may be uncomfortable at times – but a change in perspective can help businesses to implement new ideas and successfully complete ongoing processes. Design thinking is a customer-centric approach that can help in this endeavor.“What do ...

Thumbnail-Photo: Stores with employee background checks favored...
17.06.2019   #security #customer satisfaction

Stores with employee background checks favored

Sterling’s 2019 ‘Retail Industry Screening’ survey

Sterling, expert in background and identity services, today released the results of its 2019 ‘Retail Industry Screening’ survey. An inaugural initiative, the survey examines Americans’ perspectives, experiences and concerns related ...

Thumbnail-Photo: Attracting customers to your retail store: location-based marketing...
03.06.2019   #customer satisfaction #digital marketing

Attracting customers to your retail store: location-based marketing

Right people, right place, right time: getting your customers' attention

“Check out this suede jacket that matches your pants and shoes." Once a customer is near the entrance of a fashion boutique, marketers deliver personalized promotions via hologram. After the customer has entered the store, the ...

Thumbnail-Photo: DOOH displays are engaging
01.04.2019   #digital signage #Digital Out-of-Home (DOOH)

DOOH displays are engaging

Consumers to seek out more information after seeing digital signage

The majority of U.S. consumers notice out-of-home digital video displays, according to “On-Site Insights,” a new study from Edison Research. In today’s media landscape where it is increasingly challenging for brands to reach ...

Thumbnail-Photo: Product ratings: customer-centricity is important...
29.05.2019   #customer relationship management #marketing

Product ratings: customer-centricity is important

Global product ratings study: companies being pushed toward increased customer-centricity

Globally, 54% of companies consider product ratings to be very important to their business. For another 29%, they are somewhat important, while 17% think ratings are not important at all or that they don’t play any role yet. U.S. results ...

Supplier

HappyOrNot
HappyOrNot
Innere Kanalstraße 15
50823 Köln
iXtenso - Magazin für den Einzelhandel
iXtenso - Magazin für den Einzelhandel
Celsiusstraße 43
53125 Bonn
CCV Deutschland GmbH
CCV Deutschland GmbH
Gewerbering 1
84072 Au i.d.Hallertau