As Canadian brands and retailers continue to embrace eCommerce and develop effective strategies for seamless shopping experiences for their customers, external marketplaces are becoming an increasingly effective way of increasing sales and brand awareness. Much like having traditional bricks & mortar locations in malls and busy shopping destinations, being present on external marketplaces gets your brand and inventory in front of intentioned buyers who prefer the ability to select items from multiples sellers and pay for them all at once. This presentations is for merchants wanting to know how to leverage the power of external marketplaces and how they fit into an effective online strategy.
3. WHY MARKETPLACES?
• High traffic = exposing your inventory to more
buyers
– Virtual equivalent to a bricks & mortar location
in a mall or shopping district
– For example, eBay.ca boasts ~8M unique
visitors each month.
• New customer acquisition
– On eBay, businesses in N. America report 70-
90% of sales are new customers
EXTERNAL MARKETPLACES 3
4. OPTIONS TO MEET YOUR OBJECTIVES
• Join Marketplaces that showcase opportunities to
achieve your business goals:
– Increased sales
– Grow your customer base
• Branded/Non-Branded presence
– Drop-shipping
– Marketplace customer-type
EXTERNAL MARKETPLACES 4
5. MARKETPLACES STRATEGY
• Business Objectives drive inventory selection
– Inventory liquidation / Clearance
– Growing brand awareness
– Customer acquisition
– Overall increased sales
• Business Needs
– Is your presence on the marketplace branded or
unbranded?
• Does that have material impact on your customer?
– What levers exist on the marketplace to introduce your
brand to new customers?
• And/or remain consistent with existing customers
– How does your presence on marketplaces fit into an
Omni-channel experience?
• In-store returns?
• BOPIS?
– What are the mobile capabilities?
– What is the pricing structure & cost of entry?
EXTERNAL MARKETPLACES 5
9. QUESTIONS
Kevin A. Wolfley
Manager, Merchant Strategy
eBay Canada
kwolfley@ebay.com
(416) 969-2299
EXTERNAL MARKETPLACES 9
10. QUESTIONS
Kevin A. Wolfley
Manager, Merchant Strategy
eBay Canada
kwolfley@ebay.com
(416) 969-2299
EXTERNAL MARKETPLACES 9
Editor's Notes
Hello, I’m Kevin Wolfley and today we’re going to talk about external, or third-party marketplaces and how to fit them into your online or omnichannel strategy.
With the last 14 years of my life being spent at eBay in various roles, it should come as no surprise that most of the examples and information I’m about to share will be eBay-centric, however the goal here is to highlight the various marketplaces available and the points to consider when making a decision about establishing a presence on one of them. So with that, let’s begin by talking about the evolution of marketplaces.
Since the eBay’s launch in 1995, marketplaces have continued to grow and become an integral piece of ecommerce. With eBay, sellers of all kinds and around the world were suddenly able to tap into the global marketplace of online shoppers. With a history rooted in C2C, auction-based commerce, eBay has now established itself as a partner to brands and retailers with over 75% of items purchased today in new condition and in Fixed Price format. It provides sellers with the opportunity for a fully branded presence within the eBay experience and does not compete in the retail space (eBay doesn’t sell any of its own products). Sellers on eBay leverage their own ecommerce capabilities in terms of fulfillment and returns.
Next, we have the more hybrid approach to marketplaces with platforms such as Amazon . Offering a catalogue-based experience, Amazon competes as a retailer while also providing a marketplace for sellers and what they lack in terms of onsite branding, they make up for with various options around fulfillment and selling on the Amazon marketplace. The Amazon experience provides a very structured experience, leveraging standardized information and layouts and creating a buyer experience that is seamless between purchasing items from Amazon or from a third-party seller on the Amazon platform. That standardization, and the fact that they also play in the retail space, includes specific requirements- but also provides opportunities for- shipping time/methods and fulfillment, including a fulfilled by Amazon option.
Shop.ca is an example of the next type of marketplace where the focus is completely on B2C commerce and provides a wrapped and platform-branded experience. Items purchased on Shop.ca are shipped directly from the brand/retailer, however the customer belongs to Shop.ca and the brand/retailer is then paid by them (Shop). Additionally, Shop.ca focuses 100% on the Canadian market, thereby meaning that sellers on this platform are not competing with global sellers, most notably those in the US. Lastly, Shop.ca has invested heavily in unique traffic drivers through a strategic partnership with Aeroplan, which caters very clearly to its Canadian focus and differs greatly from the traffic driving efforts of sites like eBay and Amazon.
Finally, I’ll quickly mention specialty-type marketplaces such as NewEgg and Equipment One. These are specialty marketplaces that focus on a specific industry which carry their own pros and cons (targeted expertise in a specific industry balanced with lower overall traffic and exposure).
At the end of the day, regardless of the marketplace(s) you decide to join, the core value proposition is the same: More eyes on your products (traffic), sales & new customer acquisition.
Marketplaces are the online equivalent of a mall or shopping district. Buyers come to the platform with the intention to browse, research and/or buy and marketplaces sellers take advantage of this virtual “foot traffic”. For example, eBay Canada averages about 8M unique visitors each month across the site & mobile, a number that is significantly higher than those we see for websites that belong to bricks & mortar retailers.
To provide greater context, according to ComScore, eBay and Amazon top the traffic list for Canadians with a gap of over 3 million visits before you reach the top retail site (Walmart). Conversely, Etsy & Shop.ca have less than a quarter of the traffic by comparison.
Similarly, this traffic converts into sales, which means new customers to your brand or business. Depending on the type of marketplace that you choose, this presents you with opportunities for moving more product, introducing your brand to customers, creating a ubiquitous brand experience with existing customers and/or simply casting a wider sales net.
The points left to consider then, are around what your core business objectives are and then matching those objectives with the appropriate marketplace(s)
Once you have identified your core business objectives, match those objectives to the marketplaces with options to help you succeed.
For a business whose core objective/need is simply to increase sales any of the available marketplaces should be able to help you achieve that based on industry, customer reach (does the platform give you access to global buyers if you’re looking to grow cross-border sales) and the type of customer most prevalent on that marketplace.
Businesses who are looking to grow sales while still maintaining a specific brand experience across multiple channels would look more to marketplaces like eBay. One of the core eBay marketplace benefits is the opportunity to control the way that buyers interact with your brand by providing branded experiences. Branded listings & Storefronts such as the Lowes Canada one pictured above that are branded, controlled completely by the retailer and allow buyers the opportunity to move fluidly from search results into your store and full inventory set.
For businesses who want to grow sales without linking those sales back to their brand/business, drop-ship platforms like Shop.ca may be a good option. Similarly, they could explore opening a white-label experience on a direct sale platform (eBay, Amazon, Etsy). We’ll talk more about what “white-label” means in a moment.
Lastly, as I mentioned previously, businesses should consider the type of shopper most prevalent on a specific marketplace. Ensure that the target demographic for your business is also present, engaged and active on the marketplaces you consider.
So we’ve talked about the various options for marketplaces and how to link your business objectives to what each marketplace has to offer. Let’s dive a little deeper there and talk about how that translates to overall inventory selection and the buyer experience.
First, consider your business objectives and how they relate to your inventory selection for a marketplace. Are you:
Looking to liquidate aged inventory?
Looking for a channel for returns, end-of-life, refurbished or open-box inventory?
Are you looking to grow your brand awareness through a branded presence with top-tier or mixed inventory?
Trying to increase sales velocity in general for full inventory spread?
Second, consider how the marketplace will help you achieve those goals.
Does the marketplace offer a branded or unbranded experience. How does that mesh with your business objectives?
If you’re looking to clear excess inventory that you don’t want to link to your brand/retail experience, unbranded could be a great option.
If you’re looking to introduce your brand to new customers, an unbranded experience would likely be less appropriate as an option.
What levers exist on the marketplace to control how customers interact with you/your brand – and is that important?
How does the marketplace fit into an omni-channel experience/strategy?
Can buyers who purchase items online and/or on the marketplace return them to a brick & mortar store?
Does the marketplace support BOPIS (buy online, pickup in store) functionality, thereby helping you grow in-store foot traffic?
What are the costs of entry?
What are the requirements to get inventory onto the Marketplace?
Seller requirements (business size, inventory mix, SKU count/depth, etc…)
Tools for Small-Medium sized businesses who aren’t looking for full automation
How robust is the API set for those looking for a shared inventory pool and/or automation?
What is the pricing structure for the Marketplace and how does it factor into your margins?
What criteria needs to be met in order to qualify as a managed/strategic account, and is that a necessity for you?
What mobile capabilities exist for the Marketplace?
Does the marketplace have an app? More specifically, do they have an app that enhances the user experience and allows for the easy digestion of information & purchase flow?
Mobile optimization including responsive design
With so many options and opportunities, there’s clearly a lot to think about as you put together your strategy. To help contextualize some of these things, let’s go through a few quick eBay case studies.
Staples sells on eBay through both a branded storefront as well as under a white label. This diversified strategy allows them to link inventory to the appropriate channel based on their business objectives. End of life or distressed inventory is funneled into their white-label account while top-tier, new-in-box or other popular inventory is sold through their branded experience on the site.
This strategy allows them to maintain a branded experience on the site that associates their brand with the type of inventory their core buyer is familiar with while also providing a channel to move inventory that they don’t want to associate with their core brand experience. Furthermore, the use of a white-label, particularly for aged, distressed or open-box inventory allows them to mitigate risk associated with returns and warranties without any potential damage to their core brand by offering As-Is sales.
Best-Tech-Dealz is the white label account for a well-known big-box retailer in Canada.
Through this account, they move brand name, top-tier inventory at competitive prices and engage in the full range of opportunities on eBay including the eBay Deals program.
The decision to go with a white-label account allows them to play with pricing and experiences without linking it to their well-known reputation. Similarly, the white-label experience allows them to reach a segment of customers that may or may not choose to shop with them based on their bricks & mortar retail positioning. For example, if their bricks & mortar positioning typically skews to the male techie, the use of this white-label allows them to market to an entirely new demographic.
Lastly, this retailer is able to play with pricing in a way that would be prohibitive under their branded account, whether because of contractual obligations or creating inequities between their own .com and their marketplace presence. For example, they may have a contract with a specific brand that prohibits them from marketing their items at less than retail value under their branded entity, but does not preclude them from doing so under a non-branded entity. This has created an opportunity for this retailer to reach a new customer demographic and use deals and value-driven events on eBay to scale into one of our largest electronics sellers today.
Lowes Canada is our final case study with a clearly branded storefront & experience on eBay and with inventory selection & pricing that is on-par with their owned website offering.
This type of strategy allows them to reach both customers who are familiar with and trust the Lowes brand while also casting a wider net to customers who are not familiar with the Lowes experience, particularly customers in areas where Lowes does not have a large physical footprint.
So there you have it… we’ve covered a lot of information and I’ve outlined a lot of questions that should be considered as you begin to think about joining external marketplaces. There is tremendous value in the reach and experience that can be delivered on these platforms, but they must be approached with the same vigor and planning that one would apply to opening a new retail location or line of business.
My contact information in show here and I’m more than happy to answer any questions now, or in the future!