Zoe Ripley, marketing & event director EMEA ChannelAdvisor, explains why marketplaces like eBay and Amazon are the most effective, profitable and ready-to-use channel for driving revenues on an international scale
Marketplaces play a central role in the global e-commerce landscape. Forrester recently reported Amazon has 173m active accounts, generating an estimated $60bn of revenue across the globe. Meanwhile, eBayhas a global customer base of 112m.
Most recently, the ‘cyber’ days leading up to Christmas highlight the significant number of sales made through eBay and Amazon:
- Black Friday: in the UK, ChannelAdvisor reported Amazon sales were up 63% and eBay sales were up 84% from last year’s Black Friday
- Cyber Saturday/Sunday: ChannelAdvisor saw an increase of 46% for Amazon and 20% for eBay over last year’s Cyber Weekend
- Mega Monday: ChannelAdvisor saw an increase in eBay (up 16%) and Amazon (13%) sales from Mega Monday last year (3 December)
While eBay and Amazon have become well-established amongst consumers and retailers alike, new and emerging marketplaces such as Tesco, La Redoute, Newegg, Groupon Goods, Rakuten’s Play.com and MercadoLibre are beginning to outgrow their regional roots to become established global players. To put this into context, six out of 10 Japanese consumers are members of Rakuten; MercadoLibre is the largest online trading platform in Latin America, with a market of more than 550m people; and La Redoute is the largest marketplace for clothes and home interiors in France, with an average of 7m unique visitors per month and 10m active customers.
Marketplaces can often be a logical starting point for retailers looking to expand internationally. They provide a ready-made customer base and offer a low-risk and cost-effective route to market entry. In many cases, however, smaller businesses misunderstand the benefits that marketplaces can bring.
Our research at Catalyst Europe 2013 found 17% of European retailers anticipate expansion into Asia within the next two years (in addition to 17% that are already selling into Asia). A further 21% of retailers expect to expand into North America, in addition to 34% that already sell there. A further 13% of European retailers plan to expand into South America in the next two years, increasing from the 23% who currently operate in this region today.
So how do online marketplaces help online retailers increase sales?
Online marketplaces, in particular Amazon and eBay, offer access to huge volumes of active users domestically and internationally. They are established brands and often the first port of call for consumers when searching for products online. Amazon and eBay are both search-engine friendly, making products easier to find than through independent e-commerce websites.
Cross-border trade (CBT) is also much easier when done through an online marketplace rather than independently. Marketplaces support international sales through global payment services or fulfilment. For example, eBay offers sellers two ways to sell internationally: they can list items directly on eBay’s various sites or provide worldwide postage.
Similarly, Amazon allows retailers to sell their products using the Amazon European marketplaces seller account. Amazon’s European marketplaces include Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.it and Amazon.es. Once new sellers open a seller account in any of Amazon’s European marketplaces, they will then be able to create offers on any other Amazon European marketplace.
How can ChannelAdvisor help with marketplace selling?
ChannelAdvisor provides a wide range of solutions to online retailers, from those looking to improve the performance of their own e-commerce site to those looking to optimise the sales they can achieve through online marketplaces.
Many retailers find inventory management difficult to keep on top of, especially when selling across multiple channels. ChannelAdvisor automates these processes so retailers can view their product data in a single platform. Besides taking care of operational issues like inventory management, listing management and order management, ChannelAdvisor offers in-depth reporting and analytics. In a competitive retail environment, data is crucial to maximising sales.
Another aspect to consider when selling through online marketplaces is making sure you adhere to the rules of each site. Failure to do so can result in an account being frozen or removed — and this could be very costly. Beyond this, proactively taking measures to increase sales by using high-quality images and an effective social media campaign can also be achieved using ChannelAdvisor’s tools and expertise.
Show me how it works: the Xtras Accessories example
Xtras Accessories experienced problems integrating sales from its own webstore with sales from other online platforms. The team encountered overselling and used up too much time manually handling the end-to-end sales process for eBay and Amazon.
Steven Berke, e-commerce director at Xtras Accessories, said: “We recognised the revenue opportunities of marketplace selling, but we needed a solution that would offer a single platform, automate the management of product levels and provide us with clear visibility of sales by each channel.”
Xtras Accessories implemented ChannelAdvisor’s Marketplaces solution, a tool for retailers looking to sell with a multi-channel strategy in mind. ChannelAdvisor delivers accurate product data for each marketplace, offers support in helping products stand out amongst the competition and automates the management of selling online. Xtras Accessories also made use of ChannelAdvisor’s Launch Assistance, through which an experienced launch manager guides retailers as they upload their product data to the ChannelAdvisor platform and set up their presence on marketplaces.
Since implementing the ChannelAdvisor Marketplaces solution, Xtras Accessories has seen a 93% increase in sales in the first quarter, a 50% increase in revenue and progression from a Silver PowerSeller to a Titanium PowerSeller on eBay UK. Through the success they have seen since using ChannelAdvisor’s Marketplaces solution, Xtras Accessories is looking to expand internationally and begin selling in France and Germany in 2014.
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(A Retail Times’ sponsored article)