4 Challenges & Possible Solutions when selling on Marketplaces

4 Challenges & Possible Solutions when selling on Marketplaces

In November 2019, Dutch online shops saw their turnover go up by 6.5% year-on-year and Multi-channel retailers achieved 5.9% higher turnover in online sales. Moreover, 40% of online purchases are made via marketplaces. Not a big surprise that Amazon plans full-on expansion to the Netherlands soon. What influence will Amazon have on the Dutch market? Time will tell, but there is a good chance that Amazon NL will cause a stir in the Dutch e-commerce landscape.

Given the rise of Amazon Netherlands and the overall growth of existing Marketplaces, let’s 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 improving your digital marketplace shelf and your (potential) customer's point-of-sales experience.

  1. Competition
  2. Optimizing Content
  3. Findability
  4. Product Price

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1.     Competition

In countries where Amazon is already active, more than half (55%) of purchases are made online. In the graphic below you can see the online purchasing behavior 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 a lot of competition from online shopping.

online purchasing behavior per category in the Netherlands versus countries where Amazon is active

Source

 

It is a good idea to scan competition in all marketplaces, and especially within your product category, before you start 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.

marketplaces matrix competitions against own brand

Source

As you can see in above matrix, marketplaces offer enormous possibilities for brand owners. For a reseller without own brand, things get a bit more 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 will have its first products online, this data will also be available in order to scan competition in your product category.

If you are ready to go a step further, you can check how these (potential) competitors are presenting 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.    Optimizing 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. It is therefore difficult to give your (potential) buyers a unique product experience outside the platform. 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 best practices of the platform and avoid too much manual work to optimize this. Optimizing your product content on marketplaces can be very time-consuming. SiteLucent’s tooling can help you with optimizing your product's content, for example by measuring an important KPI called Digital Content Completeness Score (DCC score).

 

Product Experience Management

 

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 product returns is caused by a difference between the expectation of a product after online purchase and the product that was received. 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 will increase the findability of your products. A PIM system helps you to raise the right expectations among users and then to fulfill them, which in turn contributes to your PXM.

Finally, with PXM you can strengthen brand loyalty among your customers. When customers have a positive customer experience, they are more likely to change into repeat customers, write positive reviews and recommend your products to their friends.

 

3.     Findability

Dutch online shoppers currently prefer marketplaces (61%) over search engines such as Google (53%) when looking for products. Product listings must be optimized 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 who is selling your products at a discount? 

Pricing animation visual

Deciding how to react on it is complicated. There is no single pricing strategy that works for all products and all marketplaces because there are a lot of factors that should be taken into account. You can follow your competitors 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 way 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?

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