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How to sell online: The benefits of online marketplaces

A woman at a small business looks at her laptop.

No matter what size business you have—from a brand new startup to an established company that’s just starting to think about selling online—it’s impossible to avoid the influence of online marketplaces on the e-commerce landscape.

Doubtless, there are numerous benefits to listing your products on online marketplaces. These platforms can expand your reach and grow your customer base. E-commerce represents a $2.9 trillion industry worldwide, according to 2018 analysis from Internet Retailer, and at 14.3% (excluding such items not generally bought online as food, fuel, and automobiles) e-commerce spending accounts for a growing proportion of total retail sales in the United States. Whichever way you look at it, there’s a large market out there, with significant room for continued growth.

But even if the economic outlook for e-commerce is promising, what about the practicalities of selling through online marketplaces? How do you select the right products to sell online, and how do you market your products for success?

Also, what are the key differences between selling on online marketplaces compared with selling through your own website or other channels? Let’s take a deeper dive into all of these questions.

Why use a marketplace to sell products online?

The main reason for selling through an online marketplace is to find new customers. According to the 2019 UPS Pulse of the Online Shopper™ survey, almost all online shoppers (96%) in the U.S. have purchased from an online marketplace at some point.

It’s not difficult to understand why. The ease of buying and selling through online marketplaces appeals to shoppers and merchants alike. Whether it’s Amazon or Alibaba, eBay or Etsy, shoppers like the convenience of being able to shop from multiple vendors in one place. They also like the ease of having a single account and not needing to manage multiple sign-ins for different retailers.

That doesn’t mean you should give up on selling direct through your website, especially when platforms like Shopify make it easy to set up and maintain an e-commerce site. Plus, while selling through online marketplaces may increase your market reach, it comes with a few catches. For example:

  • You will need to follow whatever stipulations each marketplace requires of its merchants.
  • For every sale you make or listing you place, there likely will be a fee payable to the platform. The exact nature of the fee will depend on whatever commercial terms you agreed to when you signed up.

What do shoppers like about online marketplaces?

According to the UPS Pulse of the Online Shopper survey, some of the factors that drive shoppers to purchase from a marketplace rather than direct from retailers include:

  • Lower prices (63%)
  • Free or discounted shipping (47%)
  • Wider range of product categories (34%)
  • Product reviews (32%)
  • Speed of delivery (32%)

Even as you branch out to online marketplaces, think about how your business can sharpen its game in these areas on your own e-commerce site. What are your options for offering free, fast shipping? How can you encourage more customers to leave reviews on your site? What promotional strategies are you deploying to make your website pricing as appealing as possible?

Overall customer experience is another key consideration when crafting your e-commerce strategy. According to UPS’s 2019 survey, the top factors controllable by U.S. retailers that lead shoppers to abandon their carts are:

  • Cost of delivery was higher than anticipated
  • The item was out of stock
  • The item was not going to be delivered in time

As an online seller, focus on making improvements in each of these areas. This will maximize the likelihood of capturing sales through your e-commerce website in addition to the online marketplaces you use.

How to select items to sell online

Before you choose a platform, you need to decide which products you want to sell online.

Perhaps you’re a hobbyist looking to turn your passion into a viable revenue stream. Or maybe you want to introduce an existing product line to an online marketplace. In any scenario, carefully research the competition for the products you are considering. Look for a gap in the market and try to exploit whatever opportunity you discover.

Seek out items that aren’t readily available in your target market, or that can easily be customized. Your product needn’t be entirely novel, but it should bring something distinct and offer additional value to what is already on the market, unless you intend to compete primarily on price.

Think practically about your product. Some questions to bear in mind include:

Think also about your future growth. How easy will it be to generate spin-off products from your initial product range?

Finally, don’t forget the B2B market when considering products to sell through online marketplaces. According to the survey, small businesses value the lower prices and overall shopping conveniences of these marketplaces, including easy return policies.

How to sell stuff online

Now that you have decided what you’re going to sell, it’s time to develop your marketplace strategy.

First up, assess which online marketplaces are best suited for your products. Selling on an auction site such as eBay comes with different rules and expectations than selling on a craft site such as Etsy or a commodity platform such as Amazon or Alibaba.

Research each platform thoroughly and understand the various fees and commission structures for selling your product through the different sites.   

Next, it’s important to provide as much detail about your product as possible. The UPS Pulse of the Online Shopper survey found that 90% of consumers research a product before buying online. Examine the best-selling items in your category for guidance on what information to include. And don’t confine yourself to only text descriptions. Invest in getting your product photography right to catch your customer’s eye. Experiment with lighting and snapping your product from various angles.

According to the survey, 48% of consumers worldwide buy items impulsively, rather than building up a cart, when shopping on online marketplaces. Consider ways of capitalizing on this impulsivity by making your product as prominent as possible.

Steps to take include:

  • Devise a logo and branded elements that help your e-store stand out online.
  • Develop an e-commerce SEO strategy. How can you get discovered organically in your platform’s search engine?
  • Explore options for paid advertising across the different platforms.
  • Consider additional options for demand generation customized to your target market.

Whatever you do, take your marketplace ratings and reviews seriously. Authentic and personal reviews from real customers are the gold standard. Use your customer feedback as an opportunity to learn and improve your e-commerce business.

Set up your shipping logistics for success

The earlier your e-commerce business starts planning for logistics, the more it can maximize your chances of future success. 

When selling through online marketplaces, be sure to:

  • Clearly state your policy on shipping and handling.
  • Consider your pricing strategy carefully. The online shopper expects a fully landed costall fees and taxes includedand no last-minute surprises.
  • Include location information in your e-store. Will you offer goods internationally? If so, calculate the estimated shipping costs for different overseas markets.
  • Develop a robust, transparent returns policy.

If you’re in any doubt on this final point, consider that the majority of online shoppers look at a seller’s returns policy before making a purchase. About 70% of consumers say that paying for a return affects the likelihood of buying from a retailer again, the survey found.

Given that returns are inevitable, how can you mitigate the cost to your business? Return delivery options such as UPS® Drop Boxes or the UPS Access Point™ network make it easy for customers to return goods purchased through online marketplaces.

Technology solutions can also assist. A company like Optoro can help optimize the value of your returned inventory. And UPS Ready® providers like Channel Advisor can help you manage multiple accounts in one place and reduce the hassle of managing multiple marketplaces.

Plus, you can integrate your UPS shipping account into Shopify’s e-commerce platform, or access discounted UPS shipping rates directly through Shopify. This handy integration adds convenience for all your e-commerce logistics.  

Embracing a world of retail opportunity

According to the 2019 UPS Pulse of the Online Shopper survey, 38% of shoppers worldwide visit a marketplace from once a week to multiple times daily, and 36% of consumers say they intend to purchase more on marketplaces in the next 12 months. So the benefits of selling on online marketplaces are vast.

At the same time, customer expectations around online shopping are flying high: shoppers not only expect to know the exact cost of their online purchases and the precise terms of the merchant’s returns policy, but to control package delivery times

Whichever way you look at it, developing a positive customer experience should be a top priority for e-tailers everywhere, because exceeding customers’ expectations is the name of the game. But you won’t outperform the pack alone—you need trusted, expert support to get where you want to be.

Get more helpful information by downloading the 2019 UPS Pulse of the Online Shopper survey. And if you’re ready to set up and manage your online marketplace shipping for success, UPS is here to help. 

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