Data Insight predicts that e-commerce will account for about 19% of all retail sales by 2024. Recent world events related to the coronavirus pandemic have contributed to the acceleration of e-commerce growth, especially in online sales on marketplaces.
The popularity of trading platforms is explained by the simplicity and convenience of shopping for customers which increases sales of the store itself. The marketplaces collect products of different categories, from food to electronic gadgets.
The customer does not need to waste time looking for the right things: everything can be bought at once in one place and at the most favorable price.
It is also convenient for a product manufacturer or retail seller to use marketplaces since they have their audience and a well-functioning sales mechanism. There is no need to develop a website design, set up SEO promotions, organize online payments, and deliver the merchandise – all this is taken over by the product aggregator.
Trading on the marketplace is one of the options for scaling a business. Having become a full-fledged launching pad for small manufacturers, online retailers give them a real opportunity to enter new markets, including foreign ones.
Local or international marketplace?
Today, there are more than 150 registered trading platforms worldwide, which cover half of online sales. They both have common features and differences, but how to choose the right one?
The main criteria for choosing a marketplace include:
· number of visits per day;
· a variety of product categories;
· infrastructure and quality of technical support;
· number of suppliers;
· availability of opportunities for purchases by foreigners;
· payment system;
· ease of registration and login/logout.
All commodity aggregators can be conditionally divided into two categories: Local – working only in one country and International, which can be used by sellers and buyers from all over the world. The largest online retailer in the UK is Argos, in France – la Redoute, in Germany – Allyouneed, Indonesia – Tokoprdia, in India – Flipkart, in Russia – Wildberries and Ozon, in Ukraine – Prom and Rozetka, in Kazakhstan – Satu, and Kaspi … The world’s top 20 online retailers are visited by nearly 15 billion people every month.
Global international online shopping platforms include Amazon, PayPay Mall and Ebay, which account for 52% of the cumulative visits to the world’s top twenty marketplaces. For example, in the US, 55% of shoppers immediately search for a product on Amazon or Ebay, without going to Google.
When choosing an aggregator, the seller faces a dilemma of which trading platform to give preference to: local or international.
Comparative analysis of marketplaces (data from 2020)
|Marketplace name||The audience(visitors per day)||Annual turnover|
|Amazon||2,4 billion||$1,5 trillion|
|EBAY||360 million||$10 billion|
|Wildberries.ru||7 million||$1,328 billion|
|Ozon.ru||2,5 million||$796 million|
|Prom.ua||2,6 million||$400 million|
|Rozetka.ua||1 million||$300-400 million|
As you can see from the table, having a huge audience, international marketplaces can provide a seller with more opportunities to sell their products compared to local online platforms.
The advantages of international marketplaces include:
Ø Large customer base: according to statistics, up to 70% of sales made in the United States occur on the Amazon website.
Ø Large market size: with a small investment, the seller gets the opportunity to present his product to millions of potential customers
Ø A variety of products, which allows the seller to occupy his niche and expand the range of products.
Ø Built-in marketing tools providing quality advertising for product promotion.
Ø Brand awareness: sites such as Amazon, Ebay, Etsy do not need to be promoted, they are known to buyers all over the world.
Ø Well thought out user-friendly interface: almost 30% of sellers on Amazon chose this site due to its ease of use.
Ø Convenience of settlements with customers: international online services have a well-thought-out simple system for receiving international payments
A novice seller should pay attention to the largest sites with a presence around the world. They have a developed technological base and have a large coverage compared to local marketplaces.
Today, the most interesting in terms of starting or expanding an online sales business are the largest international trading platforms Amazon and Ebay.
Amazon VS Ebay: what to choose
Amazon and eBay are the American electronic trading platforms with the largest turnover of goods, attracting people from all over the world. They are two huge competitors in the e-commerce space, although their business structure is based on very different positions. Each has its pros and cons.
Amazon works on the principle of a giant online store, in which everyone is allowed to sell their goods. In addition, third-party sellers can use the warehouses of the marketplace, as well as delivery logistics. This site is focused on B2C business relationships (from manufacturer to consumer), where goods are sold at a fixed price.
Ebay is a model of an online auction, where sellers from all over the world are allowed to put up their products for sale, and buyers can purchase them. The task of the marketplace is to provide a transaction protection program. This commodity aggregator works on the C2C principle (from consumer to consumer) and merchandise can be sold both at a fixed price and at a negotiated price.
For clarity, we have summarized the main differences between the two most popular American marketplaces in a table.
|Traffic||#5 Most Visited Sites in the USA||#7 Most Visited Sites in the USA|
|Operation’s principle||Huge shopping center with thousands of virtual stores offering products of different categories||An international internet auction designed to let people trade among themselves|
|Ability to sell goods||Only at a fixed price||On a negotiated basis and at a fixed price|
|Product listing requirements||There are strict rules for the design of photos, descriptions, product characteristics to comply with obligations to the buyer||Simplicity of lot registration according to the parameters from the drop-down list|
|Product promotion||You can not invest in advertising, but use the listing of already “promoted” product groups||It does not work as a catalog; product promotion is required. additional advertising costs|
|Deal processing and logistics||For a certain commission, Amazon takes over warehouse storage (150 warehouses around the world), packaging, barcodes, ordering and delivery of products to the buyer.Also, it engaged in the procedure for terminating the transaction and returning the goods to the seller and funds to the buyer.||Does not have warehouses, all logistics from registration, storage, and packaging to delivery of products, as well as the procedure for returning them in case of a break in the transaction, fall on the shoulders of the seller and under his responsibility.|
|Payment methods for transactions||Payment to a US bank account or Payoneer payment card.||Ebay has its own system for payments PayPal or you can withdraw funds to a Payoneer card.|
|Certificates||For the sale of children’s goods, food, medicines, dietary supplements, fertilizers, cosmetic products, special certificates are required.||Certification is required only if you plan to import a commercial consignment for order fulfillment from the United States.|
Choosing the right marketplace is a crucial moment since the success of your business largely depends on it. You can learn everything you need to know to start, run and grow your business on Amazon in 2021 in detail with our Amazon Intelligence program.