How to sell on marketplaces

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How to sell on marketplaces: scheme and tactics for increasing sales

A marketplace is an online trading platform that sells goods from third-party sellers. Marketplaces often combine these functions with the sale of their own products. Anyone can place goods on the marketplace's storefront by fulfilling the terms and conditions of the marketplace.
According to the Evo Business rating, the most visited marketplaces in 2019 were Prom.ua, Rozetka.com.ua, Aliexpress.com, Allo.ua, Shafa.ua, Bigl.ua, Kasta.ua, Amazon.com, Ebay.com and Zakupka.com

Services offered by marketplaces

The more promoted a website is, the more opportunities sellers get:

• Transportation of goods. Works in pickup points or with delivery services.
• Payment for orders. Customers transfer money not to the account of online stores, but to the current account of marketplaces.
• Return of goods. Employees of the marketplace process the return and send it back to the warehouse of the online store.
• Selling products abroad. International delivery and money transactions are more convenient and cheaper to carry out through marketplaces.
• Пpromotion and marketing: SMM, SEO optimization, advertising campaign.
• Analytics of sales, website traffic, tracking the number of clicks, purchases, and returns.

The list of delivery services includes fulfillment. Over the past two years, 70% of marketplaces have implemented this type of service. Fulfillment is a set of operations that starts from the moment an order is placed and ends when the parcel is received. Fulfillment operations include warehouse storage, order processing, packaging, money transactions, and delivery. Online stores outsource the full range of services or some part of them.

Disadvantages of selling on marketplaces

• The more popular the online storefront, the more expensive the services are. The amount of commission is from 3 and even up to 70%. The commission depends on the type of platform and the type of product. Sales experts do not recommend saving on marketplace services and advise to budget money to pay for the service.
• Most often, such services cooperate with entrepreneurs or legal entities. Marketplaces are reluctant to make contact with individuals who do not have a business license.

Advantages of selling on marketplaces

• By cooperating with a marketplace, online store owners have a great chance to increase their turnover and, consequently, their profits. At the same time, experts recommend adopting a reasonable pricing policy. No one will buy a product, no matter how well it is advertised, if the price exceeds the market price, and buyers know where to buy it cheaper - your products are displayed alongside those of other online stores.
• Entrepreneurs may not invest in the development and promotion of their own website. To launch and grow sales, pay for the services of a promoted marketplace.
• Stable traffic. Thousands of buyers visit marketplaces per day, which ensures that your products are constantly viewed.
• You may not need to rent warehouses for storing goods, logistics, and delivery of products, just like you don't need to have an online store. Marketplaces take care of these functions.
• If money transactions are made through the service, it is not necessary to use cash register equipment.
• Marketplaces are also responsible for organizing international delivery of goods, payment and currency conversion operations.

How to choose a marketplace: 9 criteria for entrepreneurs

• Commission. The amount of mandatory payment. There are marketplaces in which the commission of the transaction amount is 10-15%, some even 70%.
• Frequency of payments. 50% of marketplaces transfer money for the purchase of goods within 1-2 days, some do it once a month or once a week. It is important for online stores not to lose working capital, so choose marketplaces that pay more often.
• Delivery. This criterion is less important, as in 2020, 99.9% of marketplaces have all types of delivery - delivery to the post office or pickup point, courier services.
• Payment. 90% of marketplaces act as payment agents, eliminating the need for owners to use cash registers.
• Marketplace's loyalty to competition with other storefronts. It happens that the administration of marketplaces refuses to accept an online store only on the grounds that it already cooperates with other platforms.
• Return of goods. Entrepreneurs are advised to choose only those marketplaces that work with returns. Also pay attention to the technical support of the marketplace and warranty service.
• Requirements. Marketplaces do not accept everyone. Most often, entrepreneurs are rejected because of unregistered trademarks, lack of trade permits from trademark owners, self-employed persons, and stores that sell goods through dropshipping.
• Placement of goods. An important criterion. On some marketplaces, the procedure is simple: employees ask for price lists and product catalogs, and then compare them with product cards. On other sites, it is more complicated - the administration requires photos, which must also meet the established technical parameters, a prerequisite is a unique description for them. If the entrepreneur's accounting program integrates with the marketplace platform, the unloading of goods is much faster. To create high-quality photos and descriptions, contact specialists or freelancers, and then you can do it yourself.
• Registration. Registration on marketplaces can be difficult. Marketplaces take a long time to review applications and request documents that, at first glance, would never be needed. Registration can take from 8 hours to 2-3 weeks. Torgsoft has been on the marketplace for 2 years :)

Focus on the marketplace's specialization. If you sell car parts, it is unlikely that your product will be successful on a site like Lamoda.

How to sell goods on a marketplace: step-by-step instructions

It doesn't matter what the turnover of an online store is, how many years or hours it has been on the market - anyone can apply for cooperation with the marketplace. Often, entrepreneurs do not know that the absence of an offline store is not an obstacle. The scheme of cooperation with most marketplaces looks like this:

• Registration on the website. This point is not given due attention. However, the information in this section tells about the company and the owner, so be sure to fill it out carefully and describe the benefits that the customer will receive after cooperating with the store. According to statistics, when ordering goods from a seller for the first time, 67% of buyers read full information about the company.
• Specify the data that puts the store in a favorable light: free delivery for orders over UAH 500 or 1000, a gift, discounts and bonuses, 3-4 payment and delivery options. If you have an offline store, showroom, or warehouse, include this information as well.
• The marketplace will request scanned copies of documents confirming the legality of the activity. Torgsoft for Rozetka filled out an extensive questionnaire and sent an extract, a bank certificate of account opening, and copies of passport pages.
• Content. Each marketplace has its own content requirements. Therefore, carefully study this information to avoid misunderstandings later. Study the paragraph on photos in more detail - there is a special requirement here. Marketplaces also set conditions for filling out the company's price list. As a rule, a photo of a product should be on a white background, without a store logo or watermark, and in good quality.
• Payment for access to the trading platform. The cost is different for each resource. For example, on Rozetka, the owner of an online store pays more than 100 UAH per month plus a commission for using the Marketplace's trademark. This type of payment is calculated from the amount of sales. As a rule, two accounts are opened on marketplaces, where the first one is needed to write off the commission at the end of the month.
• Marketplaces allow you to sell retail or wholesale. After registration and verification of documents, a personal account is created. You receive information about orders via SMS or e-mail.
• Content requirements. Marketplaces have different conditions, but in most cases, owners are advised to indicate the name and characteristics of the product so that the user has no questions after reading it. Please note that marketplaces filter the issuance of commodity items based on product characteristics, so upload information in accordance with the rules.

Rozetka may ask you to change the name of your company so that customers do not leave the marketplace to buy goods from you directly. Further actions depend on what services the marketplace offers. As a rule, this is the promotion of goods within the site, influence on the seller's rating, and the issuance of goods in the TOP 10 search results.

How to evaluate the effectiveness of a marketplace

• The number of orders. It is important that the amount of profit from sales exceeds the cost of marketplace services. If this is the case, you should continue to invest in this sales channel.
• Traffic. In the case of Prom.ua, regularly analyze the number of conversions from product cards to the site.
• Contact information. Analyze the number of views of the address and phone number, location, and incoming calls. Link a separate number and you will know for sure that the client came from the platform.

Reasons for low sales efficiency on the marketplace

• Incorrect price. The error "check with the seller" and the underestimated cost. Prices are often not indicated, hiding them from competitors. However, goods are sold not to competitors but to customers, and a lower price will not bring profit. By specifying the price, customers make a quick purchase decision, and if the store is new to the market, it is important to establish a trusting relationship with the customer, which will not exist without specifics.
• There is no feedback. Call customers back, otherwise, customers will go to competitors, and all the work and effort to promote your business will be in vain. Contact the customer within 5-10 minutes.
• There is no work with the assortment. The site presents irrelevant products, outdated information about sales, and an incomplete product range. Regularly monitor the relevance of products, update positions. If a product is out of stock, tell the customer about it.
• Content quality. Raw photos, lack of or incomplete descriptions of characteristics reduce trust in the seller. According to statistics, these mistakes lead to a 30% decrease in purchasing activity. A full description and list of features solves two problems: it increases trust and helps SEO optimization, so write unique texts.
• Feedback. Feedback is good for business. If a customer leaves a review with a question or thanks you for fast delivery, respond to it. Don't be afraid of negative reviews. As practice shows, if a website contains only positive ratings, the level of trust drops to 80%. Respond to negative reviews, and if the customer's problem is solved, then in 95% of cases the customer will return to the store again.
• Retain customers. Attracting customers is more difficult than retaining those who have already ordered on the platform. Marketplaces provide their own CRM system that is responsible for the formation of the customer base. Therefore, send mailings, offer relevant products, and create a loyalty program.

You can identify and correct errors made in the marketplace by contacting your personal manager.

How to increase sales efficiency on marketplaces

• Place products in the category according to their intended purpose. Customers won't like it if car parts are in the garden equipment and furniture section. Write down targeted tags. For example, if you sell a toy stroller in the toys section, write down the tags: stroller for girls, toy stroller, toy, stroller for dolls.
• Loyalty program. Customers like promotions and discounts, so marketplaces allow you to create promotional offers in your personal account. Some marketplaces offer online stores the use of promotional codes.
• Automate your business. Automation allows you to synchronize products with the marketplace, increases responsiveness to customer requests, allows you to exchange data with courier delivery services, and track customer activity. The accounting program for the Torgsoft marketplace keeps reports for the day, week, month, and quarter, as well as sales analytics. The entrepreneur will see the weak links in the business and eliminate errors.
• Tell customers about product returns. Such information increases trust - the likelihood of a purchase increases by 4-5 times. Write down a short algorithm of actions and indicate the period during which the goods can be returned. Most often, it is 14 days from the date of purchase.

Torgsoft allows you to synchronize data with your accounting program and marketplaces Prom.ua and Rozetka.ua