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4 challenges when selling on marketplaces
Selling on marketplaces as a reseller or brand comes with different challenges. We have 4 tips for you on competition, optimizing content, site-search and prices.
In this blog article, we will have a closer look at 4 of the challenges you might face as a re-seller or brand selling on marketplaces. Also, we look at 4 possible solutions that can help improve your digital marketplace shelf and your (potential) customer's point-of-sales experience.
- Stay ahead of the Competition
- Optimise Product Content
- Improve product findability
- Set a Competitive Price
More than half (55%) of purchases are made online in countries where Amazon is active. The graphic below shows the online purchasing behaviour per category in the Netherlands (blue) versus countries where Amazon is active (orange). It is expected that especially the toys, electronics and furniture stores will get much competition from online shopping.
It is a good idea to scan competition in all marketplaces, especially within your product category, before selling your products on a marketplace. Analyze which competitors are active on Marketplaces and whether your brand and products are already being sold. It may even be the case that you compete with your own retailers who also like to sell your brand/products via a marketplace. If you do not properly cover these risks, these can have major consequences for your brand and sales.
As you can see in the above matrix, marketplaces offer enormous possibilities for brand owners. For a reseller without their own brand, things get complicated, but there are also opportunities. In Emerce’s upcoming blogs, they will look in more detail at the opportunities and threats for both brand owners and resellers and show you how to apply this matrix.
Sitelucent can provide data and channel insights of big and smaller marketplaces in the Netherlands and beyond. As soon as Amazon Netherlands has its first products online, this data will also be available to scan competition in your product category.
If you are ready to go a step further, you can check how these (potential) competitors present their products, at what price points and who is 'winning' the buy box. Or, for example, find out if there are videos of the competing products for your main keywords on a marketplace.
2. Optimising content
Customers nowadays have an abundance of choices, so displaying relevant product data is more important than ever. Product detail pages (PDPs) account for a quarter of all eCommerce landing pages.
By selling your products via a marketplace, you lose a part of customer contact and customer data. Therefore, giving your (potential) buyers a unique product experience outside the platform isn't easy. This means your product pages are increasingly becoming the first and most important touchpoints. It is therefore important to continuously track and improve the completeness of your product content on marketplaces.
Make sure your content meets the platform's best practices and avoid too much manual work to optimise this. Optimizing your product content on marketplaces can be very time-consuming. SiteLucent’s tooling can help you optimise your product's content, for example, by measuring an important KPI called Digital Content Completeness Score (DCC score).
Product Experience Management (PXM)
Product Experience Management (PXM) has recently become a new term in the product data landscape and is, according to Emerce, one of the eCommerce trends in 2020.
PXM is about having a great experience from beginning to end. From discovery phase to purchase, giving shoppers clear, consistent product information and expectations.
PXM ensures a less high return percentage. Half of the product returns are caused by a difference between the expectation of a product after an online purchase and the received product. The cause is a lack of product information or incorrect product information.
Available product descriptions for every channel in every language help contribute to SEO and increase your products' findability. A PIM system helps you raise the right expectations among users and then fulfil them, which in turn contributes to your PXM.
Finally, with PXM, you can strengthen brand loyalty among your customers. When customers have a positive experience, they are more likely to change into repeat customers, write positive reviews and recommend your products to their friends.
Dutch online shoppers currently prefer marketplaces (61%) over search engines such as Google (53%) when looking for products. Product listings must be optimised for the platform's search engine. Optimizing your content with the right keywords is important.
Can shoppers find your products on a marketplace? Using keyword searches or category browsing on marketplaces, customers will often buy a product that ranks high in the search results. Monitoring and improving your products' ranking on the marketplace’s search engine can benefit sales significantly.
4. Product pricing
It's good to think carefully about which pricing strategy you will use, especially now that the competition is getting bigger and bigger. Gaining insights into how your pricing stacks up to the competition is key. Get an instant overview of competing sellers on marketplaces: who won the buy box and sells your products at a discount?
Deciding how to react to it isn't very easy. There is no single pricing strategy that works for all products and all marketplaces because there are many factors that should be taken into account. You can follow your competitor's prices, choose to extract more margin on fast-selling products or lower prices when sales are slow. Another strategy for competitive pricing is bundling products into single-SKU offerings, which is at the same time a method to differentiate from the competition.
Also, consider the commission for the sale of products. Amazon’s fees range from 6% to 45% based on the category of the product. Brands and producers have an advantage here because fees are often lower than traditional sales and marketing channels.
Curious about how to take on these challenges by using SiteLucent's digital shelf monitoring tools?