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Commerce & Sales Channels

From eBay to Amazon: Multichannel eCommerce Starts with Marketplaces

Commerce & Sales Channels
August 25, 2020
9 min read
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There are endless marketplace options for merchants to choose from in today’s highly digitized economy. We’ve overviewed five of today’s top players to help you start thinking about what qualities to look for when determining which marketplaces are the best fit for your products.

Online marketplaces are a great first step to branching into multichannel sales because they are simple to set up and require little to no upfront investment. They also offer significant SEO and SEM advantages and attract high-intent shoppers. Sellers can compound these benefits by listing on multiple marketplaces. Multichannel selling software Sellbrite reports that merchants listed on 3 or more marketplaces make an average of 156% more sales than merchants listed on only one. If you’re thinking of listing your products on multiple marketplaces to expand your reach, we’ve laid out some important considerations that will help you take full advantage of your multiple listings. Each marketplace is unique with its own content requirements, marketing features, and payment options, not to mention the community surrounding the marketplace and the top-of-mind items for shoppers who browse there.

Successfully managing multiple marketplace listings is all about finding a perfect balance of casting a wide net and not spreading yourself too thin. There are ample marketplace options in today’s highly digitized economy, many more than we’ve listed here, but these high-level features of some of today’s top players should help you create a checklist to determine which channels may perform best for your products.

Amazon

As the largest online marketplace in the world, Amazon is an obvious first stop for most merchants. Many shoppers actually begin their shopping journey on Amazon, and even if they make their way to another channel to make their purchase, they still use Amazon as a price-checker and a delivery standard. In fact, the so-called “Amazon effect” has long driven consumer expectations for 2-day delivery to the extent that merchants who don’t offer this option are no longer competitive. Amazon is, however, a highly saturated marketplace, making it essential for sellers to win the buy box by pricing competitively and guaranteeing 2-day delivery either through FBA or SFP. The Prime badge is eye-catching at the top of the sales funnel and draws loyal Prime customers who typically spend twice as much money per year on the site as non-members. Because Amazon is the current industry leader, most platforms, whether a multichannel selling software or fulfillment partner, will integrate with it, allowing you to automate many of the day-to-day functions of managing your listings. 

A quick overview of Amazon’s fulfillment infrastructure and inventory visibility may give some sellers pause and make them consider prioritizing a strategic fulfillment partner. Finding a partner that is committed to your business’s success and cares as much about your KPI’s and customer satisfaction as you do can be the difference between logistics being a squeaky wheel or a revenue driver for your business.

eBay

eBay was one of the first online marketplaces and remains one of the largest. Most consumers immediately think of eBay’s original auction pricing structure, but the site has long since added a “Buy It Now” fixed price option. Some sellers appreciate the ability to choose between the two pricing options, but the auction model will likely require too much oversight for a growing eCommerce business. Another point to consider when comparing eBay to Amazon is that eBay itself is not a seller in the way that Amazon is. Many merchants find that it’s becoming increasingly difficult to compete with Amazon’s private label brands. 

Short of offering a full membership program like Amazon Prime, eBay does have a Fast ‘N Free badge program for sellers who offer free shipping, an expedited delivery option, same day or 1-day  handling, and tracking information for all shipments. In addition to the attention grabbing badge, sellers enrolled in this program will also qualify for seller protection on orders that don’t meet the guaranteed delivery time, as long as the order was fulfilled on time. Although eBay had a fulfillment and delivery program in beta testing for several months in 2019, the program ended abruptly, and eBay offered no insight into the future of the program. To benefit from the Fast ‘N Free program, sellers should have a fulfillment system in place that will consistently meet its requirements.

Walmart Marketplace

Walmart Marketplace is quickly encroaching on Amazon’s lead as the largest marketplace, after record sales early in the COVID-19 pandemic. There are no setup or monthly access fees, making it a low-risk option for merchants. Its major advantage over Amazon and eBay is its connection to brick and mortar stores, giving shoppers a wide variety of options for pickup and returns. 40% of shoppers prefer making returns in-store, and 17% of shoppers went so far as to say that they wouldn’t make an online purchase without the option to return it to a store.

Walmart has built brand loyalty on a history of competitive pricing and excellent customer service. These high standards are also an expectation for Marketplace sellers, and in their race to overtake Amazon’s number one position, Walmart has prioritized same-day fulfillment and speedy delivery with its Free TwoDay Delivery program. The program offers Prime-like placement, and increases a sellers’ chance of winning the Buy Box by 50%. 

It’s important to note that unlike many other online marketplaces, Walmart will not allow fulfillment through FBA, although it does offer its own in-house fulfillment service. As with any proprietary system like this one, it’s important to weigh the risks and benefits of segmenting fulfillment rather than streamlining through a single outsourced partner. A significant risk in using Walmart Fulfillment Services is a lack of flexibility with limited inventory. The strategy of “ringing” or “fencing” inventory allows merchants to easily move their inventory between sales channels to feed their highest-performing channels. The only way to achieve this type of flexibility is by managing all inventory through a single fulfillment partner.

Newegg

Newegg was originally founded as a tech-only marketplace, and while it has expanded its offerings to home goods, accessories, and other items, the site is still primarily trafficked by tech enthusiasts. Its program Newegg Business facilitates bulk sales to B2B customers, making it a great foot in the door for tech merchants looking to build a wholesale channel.


Their answer to Amazon Prime, Newegg Premier, will be cancelled soon, but Newegg has announced plans to launch a brand new loyalty program in the future. Members of their current Premier program typically spend 50% more than non-subscribing customers, and Premier sellers are also given exclusive marketing opportunities like eblasts and homepage promotions and automatic higher rankings in search results. Premier offers customers guaranteed 3-day shipping, and merchants can choose to find their own fulfillment provider or utilize Shipped by Newegg. The Newegg fulfillment program can be integrated with other sales channels, but with only 91% national coverage for 2-day shipping and a standard of 3-day shipping or less, their SLA’s may not be stringent enough to comply with programs like Amazon’s SFP.

Overstock

Overstock.com has expanded to include many product categories, including beauty and apparel, but is still primarily known for bedding, home decor, and furniture. Their brand reputation attracts shoppers who are looking for high-quality or brand name products at bargain prices. Similar to eBay, merchants do have the option to auction their products or offer them at a set price. Overstock charges a listing fee, but commission rates are low compared to other marketplaces, and the site offers extensive back-end analytics like pageview counters that allow merchants to test top of funnel responses to different product photos and descriptions. Overstock also has an active charitable arm called Overstock Cares that supports organizations like Make a Wish Foundation and Wounded Warrior Project among others.

Overstock has recently seen the value of offering 2-day delivery to drive conversions, noting higher conversion rates of up to 30% on orders offering 2-day delivery as opposed to 3 days or more. Additionally, they’ve found that by dropshipping 90% of their orders from locations strategically placed close to end customers, they cut down on time in transit and consequently on damaged items. Vince Atkin, Overstock’s VP of Supply Chain stated, “From a supply chain standpoint, faster shipping means less damage. We ship a lot of bulky furniture and the less touches it has, the less chance it has to get damaged.”

As a result of the supply chain improvements Overstock implemented for the 2019 holiday season, it was the fifth most mentioned retailer when shoppers were polled about their favorite online holiday shopping experiences.

Your Marketplace Ecosystem

Building your marketplace channel is a matter of finding the best fit platforms for your products and business operations. Overwhelmingly the evidence shows that listing on multiple marketplaces increases brand awareness and gives you the opportunity to build an ecosystem of marketplace listings so you can leverage the best features of each platform. 

Consumer preference for digital shopping experiences has led to increased pressure on supply chains to delivery quickly and affordably. In fact, 60% of shoppers expect to receive their order in 2 days or less. Additionally, 58.5% merchants responded to our recent survey that they saw repeat business as a result of offering 2-day shipping, indicating that building a supply chain to support the demands of digital sales is key to successful online marketplace growth.

To learn how Ware2Go is helping merchants make the most of their marketplace listings with an expanded 2-day delivery footprint and intelligent inventory management, reach out to one of our logistics experts.

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