Your Peers Are Selling on Marketplaces, Are You?

Amazon.com, Best Buy, eBay, Newegg, Sears … the list goes on. The e-commerce space is becoming flooded with marketplaces, but in a good way. Selling on marketplaces can be one of the quickest ways to access more online shoppers, expand your brand exposure and grow online revenue (globally and domestically).

So how important is it to sell your products on marketplaces? ChannelAdvisor commissioned Redshift Research to conduct the Multichannel E-Commerce Study, which surveyed more than 200 U.S. and U.K. retailers that averaged $3 million to $5 million in revenue in 2013. Our results identify how your peers are using marketplaces to accomplish their online initiatives, as well as some of the challenges they're experiencing along the way.

Here are some of the main takeaways from our survey:

Marketplaces Are Eating the E-Commerce World
Consumers use marketplaces because of their vast product selection, competitive prices and convenience in being able to purchase multiple items from one place. Our research indicates that retailers are recognizing the profitable opportunities that marketplaces present. Consider the following survey results:

• 90 percent of retailers surveyed are selling on marketplaces;
• global marketplaces were listed as the No. 1 channel for international transactions; and
• at least 15 percent of retailers surveyed are selling on emerging marketplaces such as Best Buy, Newegg and Sears.

Amazon is Still Dominant in the Marketplaces Ecosystem
Amazon is leading the online marketplaces stampede. It provides consumers with a comprehensive shopping experience that includes more than 30 product categories. Retailers that view Amazon as a friend rather than a foe gain access to millions of shoppers and can develop a loyal online following. Here are some survey results to back that up:

• 84 percent of retailers surveyed are currently selling products on Amazon;
• 28 percent of retailers are using Fulfillment by Amazon (FBA); and
• 62 percent of respondents believe Amazon provides the best opportunity to sell internationally.

Marketplaces Are Playing a Key Role in the Growth of Cross-Border Trade
International borders are blurring, and the e-commerce revolution has become a global experience. Global e-commerce sales are projected to reach more than $1.4 trillion in 2014. As our study results suggest, retailers are using international marketplaces for their cross-border trade efforts. Consider the following:

• 30 percent of retailers surveyed reported that 21 percent to 30 percent of their online sales come from international marketplaces.
  • Almost half (48 percent) of retailers said that more than 20 percent of their online sales occur via international marketplaces.
  • Retailers said that global marketplaces are the No. 1 point of sale for international transactions.

Competitive Pricing the Biggest Challenge to Selling on Marketplaces
Although it's important to make your presence known on marketplaces, expanding to additional marketplaces can be complicated. The competition on marketplaces is stiff, and each site has different requirements and pricing structures. According to our survey, retailers are seeing some of these issues as they look to expand their presence on marketplaces.

• Retailers report that the top challenge in selling on marketplaces is maintaining competitive pricing (53 percent), followed by standing out from the competition (44 percent) and managing product quantity (42 percent).

After seeing what your peers are doing to optimize their online sales on marketplaces, how do you stack up?

Link Walls is the vice president of product management at ChannelAdvisor, a cloud-based e-commerce solutions provider.