Managing Multiple Marketplaces Profitably in Today's Unpredictable World

Third-party commerce (3P) is growing. U.S. retail e-commerce sales will grow to $588 billion by 2027, with online marketplaces accounting for nearly 40 percent of those gains, according to eMarketer. 3P commerce allows brands to reach consumers directly through retailer marketplaces. However, it can be difficult for brands to effectively manage their presence across multiple channels. That’s why more brands are considering outsourcing marketplace management to reduce risk, adapt to market and consumer demand changes, and maintain smooth operations.

So, why have marketplaces become indispensable right now?

Consumers want more choices before committing to a purchase. A substantial 82 percent of global shoppers visit two or more websites before buying, according to the 2023 Online Consumer Behavior Global Report by Rithum and research firm Dynata. Seventy-two percent of consumers said they would look even further, exploring two to four websites before purchase. To meet consumers where they are, brands are looking at 3P commerce models to scale efficiently and fast.

Third-Party Commerce is the Future of E-Commerce

Consumers want multiple options when shopping online — and brand leaders are taking note. A recent study by Forrester and commissioned by Rithum found that 77 percent of brand leaders believe online marketplaces are growing faster than their traditional sales channels. This has often been an entry point for new-to-market brands and now long-standing flagship brands are reconsidering their go-to-market strategy

The requirements to become successful have escalated at a rapid rate in the last 10 years. More brands are seeking consultancy or agency support to effectively pursue marketplace success. They often find securing and retaining talent is harder than ever. Outsourcing marketplace management to a single platform connects retailers' product listings, inventories, and order systems with major sites like Amazon.com, eBay, and Walmart, allowing centralized control and real-time updates. This creates more choices for customers, provides a smooth buying and selling process, mitigates inventory risks like stock-outs, and helps businesses achieve profitable growth faster. When launching a new channel or enhancing a current presence, ongoing discussions can be held around brand and product strategy, competition, pricing, return rates, organic and paid reach, and overall visibility through the lens of profitability.

While the benefits of scaling to a new marketplace are significant, doing so in-house can be cost prohibitive and time consuming. By outsourcing marketplace management to a single platform, brands and retailers can leverage years of experience, a quality network of suppliers, and cross-channel insights, allowing them to focus on managing performance. This is useful when adapting to changes and requirements to launch with marketplaces like Target+, Nordstrom, and others.

3 Benefits of Selling Through Third-Party Marketplaces

​Marketplaces are a rapidly growing channel and present an opportunity for brands and retailers to expand quickly and profitably. Third-party marketplace services drive business resilience in three ways:

1. Access to valuable data and expert support: Third-party marketplace services provide a wealth of data, showing what customers are buying, how sales are trending, and market dynamics. This information helps businesses make smart decisions about inventory, pricing and promotions. A team of experts help retailers comply with regulations and optimize their listings, reducing the risk of costly mistakes.
2. Reducing risks and increasing flexibility: Third-party marketplace services help reduce the need to own large inventories and eliminate markdown risks. If a retailer runs out of an owned SKU, cross-channel strategies on marketplaces allow suppliers to fulfill orders on multiple sites, mitigating stock-out risks.
3. Reaching new customers and improving efficiency: Each marketplace has its own audience, giving retailers a chance to reach new customer segments and boost brand awareness. Marketplaces services streamline operations by centralizing order management, inventory tracking, and fulfillment processes, reducing errors and saving time. This efficiency allows businesses to respond quickly to market changes and customer needs, maintaining business continuity and fostering innovation.

Third-party marketplaces are essential for long-term success. It’s time for brands to explore the benefits of third-party marketplaces and embrace this strategic method for a resilient future.

Nathan Bird is head of North American sales at Rithum, a provider of end-to-end e-commerce solutions.