Amazon pretty much runs the ecommerce show by now. Especially with their free two-day shipping offer that comes with an Amazon Prime account, many consumers are turning to the online marketplace conglomerate for most of their buying needs. Even with its popularity, the rising costs to stay competitive on Amazon make you wonder if it is even beneficial to continue selling on the platform.
A 2020 report from Feedvisor, the AI-powered optimization and intelligence platform for brands and large sellers on Amazon, found that nearly three-quarters (73%) of brands selling on Amazon are advertising on the marketplace, reflecting a 26 percent increase from 2019. The online platform has thousands of brands selling on there, and if most of them are advertising, that is a lot of competition for smaller retailers who may not have that large of an advertising budget.
Larger Marketplaces vs. Smaller Marketplaces
“On one hand, bigger and more popular marketplaces provide exposure to many shoppers because they have a large customer base, but it is also very competitive,” Liat Karpel Gurwicz, Head of eCommerce Marketing at Wix, said. “The main challenge with bigger marketplaces is that retailers need to do their research on their product categories and on their competitors to see how feasible it would be to compete on the marketplace.”
Smaller brands can especially find it difficult to get their products seen by shoppers in a crowded market. This is where niche and local marketplaces can help because even though they are smaller, they provide more visibility for indie retailers looking to get their name out there. With less competition on the platform, it is easier and cheaper to pay for advertising, which can quickly put your brand name at the top of the list.
Do Your Homework
Besides Amazon, most sellers will flock to eBay to sell their products, but even eBay can be a large and competitive marketplace. Other local and niche selling platforms include Bonanza.com and Poshmark, just to name a few, but there are hundreds of other online marketplaces that are a cheaper option for retailers to help build their brand awareness.
This is where Liat recommends smaller businesses to do their homework and figure out the best selling platform for them. “You should know your target audience really well and their lifestyles, and then it is easy to match the right marketplace. Also bear in mind that social networks can function like marketplaces today. You may not be reaching shoppers who are actively browsing products, but you are able to reach a targeted audience and your followers are already interested in your brand. This is a way to use targeting capabilities to reach new shoppers or reengage existing customers.”
Growing Your Business
For retailers who are just starting their business, Liat suggests that brands use both an ecommerce website and an online selling platform. Websites are long term investments so as you build exposure through marketplaces, customers can continue to come back to the website for repeat purchases or to find new products. As time goes on and your brand exposure continues to grow, indie retailers can think about investing in SEO to help get organic traffic to their store, as well as other advertising options. Always be sure to do your homework first and see who your competition will be, and invest wisely in growing your business.