Why Partnerships And Marketplaces Are The Heart Of Your Online Selling Strategy
It takes a village to raise a child – and the same goes for eCommerce businesses. For eCommerce retailers to be successful, there are so many essential elements required: suppliers, their website, and the marketplaces that will almost certainly be where many sales are made.
But while marketplaces are one of the first connections that retailers tend to make, they aren’t the only other businesses that retailers need to consider working with. Collaborations are at the heart of eCommerce success, particularly when small and mid-sized businesses are growing. In this post, we’ll take a look at the value of marketplaces, and some of the other partnerships that should be part of your strategy through 2021 and beyond.
Why marketplaces should be at the heart of your online seller strategy
Long-established retailers know the power of having marketplaces as part of their online selling strategy, with most having adopted the approach early in their journey, and new retailers follow this format in their businesses. While your own website is a key component of an online selling strategy for most businesses, waiting for their new eCommerce website to rank with the search engines doesn’t help the business to grow quickly – retailers must make use of marketplaces to kickstart their sales.
There are very few retailers that don’t sell on marketplaces. Even household name brands such as Apple have presences on marketplaces, which speaks volumes about the value that they get from being accessible to customers wherever they make their purchases, rather than making customers come to their website. Customers want your products, but they want the convenience of being able to buy them where they are already shopping. That’s why so many customers buy from marketplaces – they already have their account that has their payment details stored, they can get almost anything they want, and they can check out with just a few clicks.
This omnichannel approach – selling where customers want to shop, and providing the same high standard of service wherever customers interact with them – is being utilised by an increasing number of retailers. That’s because the benefits are clear: being able to make purchases, and contact the business where it is convenient for customers, means that more items are likely to be sold.
Rather than working with an omnichannel approach, smaller businesses are using the ‘optichannel’ approach – operating where their customers are most likely to be, optimising both the customer experience, and the chance of success for the business.
Selecting the best marketplaces for your business is an ongoing process, and should be reassessed on a regular basis. Changing your marketplaces as demand ebbs and flows (rather than assuming that the biggest marketplaces are the best ones for you) means that you are spending marketplace fees in the right place, and reaching customers where they shop. Selling on every single marketplace you can find is unlikely to be the best strategy either – particularly when you consider the cost implications of listing – there simply won’t be the return on investment for many marketplaces. So when choosing your marketplaces, there are a few things to consider.
Since there has been an even bigger uptake in customers shopping online since COVID-19 arrived, now is a good time to reassess what your target customer looks like - since more potential customers may be searching for your products. This is particularly the case if you have diversified your inventory, or changed direction with your products recently.
In addition to your business changing and the number of potential customers increasing, consider whether your customers may be changing too. As more consumers become more ethically conscious, there is a shift away from shopping with organisations that make billions (and may have questionable tax status) towards shopping with small businesses, and organisations that support them. That’s where marketplaces that are quickly growing, support SMEs and pay their taxes in the country that they operate – as OnBuy do – come into play.
How products in your inventory are performing
Looking at your best selling products and seeing where else you can list those items and capitalise on sales is a no-brainer. But for items that aren’t selling, rather than immediately culling the items from your inventory, see if you can identify the reason that those products aren’t selling. Is there an issue with the product data? Perhaps there’s been an issue with the items being listed on the marketplaces, or maybe your pricing is off. If you’re holding stock for those items, you may be able to create bundle deals that can get those products out the door, freeing up your cash.
If there is a marketplace that isn’t performing as well as you expected, check to see if there is a technical issue, or perhaps product data that could have caused the problem. If not, then see if there are any ways you can optimise your items, whether that’s pricing, product descriptions and keywords, or making use of the marketplace marketing tools. Or, it may be time to stop listing there, either choosing another marketplace or focusing your efforts on the other marketplaces in your strategy. There isn’t a correct answer here - you’ll know the right move for your business, and since you’ll be reviewing regularly, you can experiment with different strategies.
The marketplace processes
Let’s face it – the marketplaces you choose need to work in your favour. Commission levels need to be appropriate, so that your profit margins aren’t impacted too negatively, and you’ll need to consider how long it takes to release funds from your sales. If your business needs cash, and you’re left waiting weeks to receive your disbursements, then that marketplace may not be the right sales channel for you to operate on right now - working with a marketplace that provides cash from your sales immediately (as OnBuy do, thanks to their partnership with PayPal!) is likely to be a better option.
Getting your sales channels in order, and your marketplace strategy spot on is essential, as we already mentioned. But there are other partnerships that online sellers can make to benefit their business too.
All types of businesses benefit from creating a strong network of associated businesses that they can work with to benefit each of them. Whether it is to increase the inventory they can offer, to reach more customers, to fulfil more orders or to do good things for the community or a charity, creating strategic partnerships can help businesses to grow much faster.
Product sourcing partnerships
Creating a strong working relationship with suppliers is an essential part of any retail business. You need to know you’re going to have enough stock to meet customer demand, after all. Buying inventory from suppliers and wholesalers is the traditional method of setting up a retail business, but there are often barriers to making that happen, with cashflow being one of those issues. If that is the case for your business, then it is possible to extend and diversify your inventory using the dropshipping model. There is the option of dropshipping from suppliers that are overseas – but working with overseas suppliers can present multiple potential issues for retailers, including long delivery times (and in some cases, non-delivery), quality control and customer service problems. These are all serious issues that can have a huge impact on your reputation, particularly where negative reviews are left.
Rather than risking your business, a much better option is to work with a dropshipping marketplace such as Avasam, that allows you to gain access to the inventory of multiple suppliers that have been verified, and that have stock in the country ready to dispatch immediately. Avasam also connects to a range of sales channels, including OnBuy – with automated listing tools that make it simple to get started, and to change the products you sell. You can also optimise the profit margins on your sales by setting rules.
If you’re a retailer that holds stock in your warehouse, and you use a retail system such as Linnworks, Avasam can be used alongside that setup. That means you can continue to operate as normal, with Avasam inventory simply showing as another stock location, and you can manage your sales of Avasam products alongside your other sales.
Working with product sourcing solutions such as Avasam means that you can diversify your inventory, and minimise the chances of customers seeing out of stock messages, since you can work with a number of suppliers, with no hassle.
There are a number of ways that retailers can benefit from creating partnerships for their marketing – and they can be an effective, and cost efficient way of increasing both brand awareness and sales. Marketing partnerships can include:
- Working with influencers to promote certain products, or the business as a whole
- Working with businesses with complementary products to create advertising campaigns
- Affiliate partnerships to drive traffic
- Partnership for hosting or attending events in person
- Creating social media events such as takeovers
- Sales agreements to sell products in a store
Since a huge element of your success depends on brand, and product awareness; creating partnerships to promote both your products and your business can be a great way of squeezing the most out of your marketing budget.
When your business has grown to the point that you need to be able to fulfil more orders but you’re not quite at the point of being able to invest in additional space or staff resources, then fulfilment partnerships can be a solution. Fulfilment partners offer space for your inventory in their warehouse, and take care of dispatching orders to customers, allowing your business to grow, without the upfront investment in warehouse or staff.
There are a number of third party fulfilment companies, and choosing the right one for your business will depend on a number of factors, including shipping, reliability, price, scalability, location, and integrations.
With the emphasis that many customers now place on working with ethical businesses and choosing to buy from retailers that do good things, there is a lot of scope for partnerships with charities. While it may include a financial contribution, a charitable partnership doesn’t necessarily mean handing over a huge chunk of your profits. You may exchange social media posts to increase awareness, do takeovers on each other’s social media accounts or donate time, so your team can do voluntary work for the organisation – which you can then use for your social media, with the charity’s agreement. Your team benefits from the feel-good factor, the charity benefits from increased awareness (and any funds or resources that you donate) and your customers know that they are supporting a charity – even if indirectly – when they make a purchase from you.
It is pretty clear that businesses need other businesses to thrive. While it is theoretically possible to do it alone, without a strong marketplace strategy, and partnerships to support the business, it is much, much harder. The exposure that businesses need, combined with the additional support and exposure that partners – whether they are there for product sourcing, or contribute to other aspects of the business – can provide is invaluable.
Whether you’re looking for ways to scale up your sales, to increase the visibility of your business, or to diversify your business, choosing partners for your online retail business should be done carefully. There isn’t a ‘one size fits all’ solution, but finding the optimal partnerships will help to ensure that your business continues on the path to success.
Avasam is the UK’s only multi-channel DropShipping marketplace, providing all the tools you need to integrate your online store, source quality products from UK-based verified suppliers, and automate your order processing, payments and shipping.