Here at OnBuy we've partnered with marketplace growth specialists Rich Insight to share their expertise on how marketplaces can help sellers diversify their business and allow them to approach expansion in a risk-free way.
From taking care of planning, to handling marketing and management, Rich Insight are proven in driving significant growth for many brands across different retail verticals. If you're a seller looking to join OnBuy or you're already selling on our brilliant platform, read on to hear Rich Insight's knowledge on growing your business.
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How have you viewed the importance of eCommerce diversification over recent years and has this grown?
As marketplaces represent the majority of eCommerce sales and search behaviour, sellers and brands have to change their thinking on what eCommerce means for them and their customers.
Quite simply, it isn't enough to be focused on your own site in isolation. Businesses need to understand that they are part of an ecosystem; multi-brand sites are taking an increasing share of the market as consumer behaviour shifts to convenient, multi-category, trusted sites more and more.
As a result, it is critical for sellers to understand where buyers like to shop in the key geographies sellers are focused on and meet the customers where they are, by listing on key trusted sites like OnBuy.
Spreading your sales across sites also mitigates the risk of downtime, which with the recent pandemic has shown real benefits in a diversified strategy for maximising customer interactions and brand reach. So, eCommerce diversification is now more important than ever as trends continue to re-enforce this approach.
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What do you see as the greatest risks in diversifying and how do you safeguard against these risks?
The main perceived risks are a lack of focus, operational infrastructure, expertise and stock efficiency. These risks can all be very real without the right structure and is why we advocate putting in place an effective planning phase (which we help many brands with) to ensure they make the right decisions on marketplaces. The planning phase includes IT, warehouse and logistics, commercial proposition, and management resource implications. We help many internal teams who have gaps in their team expertise and bandwidth to help mitigate risk and maximise channel reach.
Focus is important, but there are so many incremental sales to be made for so many in new markets. We feel that once you have a good understanding of your objectives and capabilities, then being more aggressive on launches, learning from sales data and doubling down on things that work can be effective for many. That's a key part of how we structure our service to derisk testing new marketplaces.
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How can a seller keep their offering innovative and responsive?
It is important to read up on the latest changes on this dynamic channel, as well as find time to review competitor activity and platform trends. We share weekly updates of key changes on our site that you can sign up to here.
I think regular audits of a seller's listings is also important and is something we do routinely - as well as trying to adapt your approach to changing trends. These sites are hugely dynamic and ever changing, so the quicker the loop between reviewing performance data to making changes the better your chances of success.
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What are the opportunities for resellers on marketplaces?
Resellers have a great opportunity to get first mover advantage over brands, who are often (but not always) slow to pick up on new channel opportunities and take time to make decisions. There are, therefore, some great emerging sites that sellers can have much less competition with if they have the right setup and approach.
Because these opportunities might carry some time limits (with other resellers and manufacturer brands themselves moving onto these sites and therefore increasing competition), it is vital for resellers to keep ahead of this with new marketplaces and territories where possible to maximise the impact of their product proposition to new customers.
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What are the challenges ahead for sellers in the eCommerce world?
Increasingly, there are cross border challenges in certain territories and categories with international tariffs and complexity (which Brexit will also contribute to), alongside the potential for a global recession and the persistence of this pandemic, which will have a big impact on buying habits.
Understanding potential demand and profitability in equal measure is going to be increasingly key. Getting good data and analysing changes in trends is also becoming more and more important. There are many sources of information in this day and age, and that can help ensure sellers are adapting in line with demand. Local retail is also increasingly important, so finding ways of linking eCommerce with local retail as more people work from home is a real long-term opportunity and short-term challenge for many.
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What are the best approaches to scaling an international marketplace business?
There are many key things to consider in scaling on international marketplaces. After defining their objectives and marketplaces to go after, the key things for a seller include systems, warehouse and fulfillment, proposition, and management resource.
Ideally a seller would work on a channel management system which enables them to sync product information, orders and stock across multiple channels through one integration. This also often helps act as the place to optimise product data at scale and across multiple channels and regions.
Warehouse and fulfillment
It is critical to have a back-end operation that provides the balance of stock efficiency, global reach, competitive SLAs and realistic pricing. Thinking about global distribution is critical, as well as maximising channels of sale where segmentation of stock is needed - for example, having stock in the EU post Brexit.
Having the right mix of product, pricing, promotion and policies is critical to success on marketplaces globally. Sellers need to ensure they factor in key levers like marketing within this, which can be essential in building initial traction and visibility early on.
To make marketplaces work, sellers need a mixture of skill sets: product data optimisation, trading, performance marketing, analysis, problem solving, relationship management, internal project management, a good grasp of IT, platform knowledge and global eCommerce experience, to name a few.
It is almost impossible to find this in one (or even two) hires and anyone vaguely fitting the brief will be in high demand. So, being realistic on what a seller's internal skill set is and leaning on a third party (like us) for help filling the gaps is often a sensible approach to maintain channel control and maximising success in this competitive channel.
For more information or any other questions, please email Rich Insight direct at [email protected].