Marketplace online sales: how to choose the best one?

What is an online marketplace?

An online marketplace is an e-commerce website where several sellers can offer their products/services, in most cases for a commission on sales . We also talk about market place .

It thus distinguishes itself from the e-commerce site by its multi-vendor format . In other words, unlike a traditional e-commerce site, several sellers can propose their offers.

There are generalist marketplaces like Amazon or eBay. On the other hand, there are also specialized marketplaces like Airbnb for real estate rentals or LeBonCoin for second-hand items.

Marketplaces were originally designed exclusively for B2B markets. It was only with the democratization of online shopping by individuals that B2C marketplaces developed.

The best marketplaces for selling online

Here is our selection of the best marketplaces on the market:

Amazon Marketplace: visibility and logistics

With 181 million users around the world, Amazon is the most popular marketplace of the moment.

It's the ideal marketplace for any company seeking visibility. Founded in July 1994 by Jeff Bezos In its early days, it was an online bookshop.

Over the years, it has evolved into an "everything store . In other words, you'll find everything from books and clothing to food and electronics.

Its advantages:

Its Amazon FBA (Fulfillment by Amazon) logistics service, which has over 100 shipping centers worldwide.

Disadvantages:

• The difficulty for small businesses to stand out in the face of fierce competition

• High commissions ranging from 6% to 45% depending on the product category.

Prices:

Amazon applies two main types of fees:

• Subscription fees for 39 euros per month for professionals

• Sales commissions ranging from 7% to 45% for each product category.

eBay: flexibility for sellers of all kinds

Founded in 1995 by Pierre Omidyar eBay is also a pioneer among marketplaces. In the beginning, it was an auction platform .

As a generalist, it offers a wide variety of products, from clothing, shoes and accessories to cars, motorcycles, sporting goods and garden equipment. It also accepts both new and second-hand products.

Advantages:

• A well-known marketplace offering high visibility . It's better suited to small and medium-sized businesses (compared with giant Amazon).

• An auction system that lets you sell your exceptional products at a good price

Disadvantages:

• High costs. The marketplace charges sales commissions, regulatory operating fees, listing fees, currency conversion fees and listing option fees. All these fees can quickly add up and add to your final bill.

• A seller protection policy deemed insufficient. The platform seems to favor customers in disputes on the platform.

Prices:

eBay charges sales commissions ranging from 5% to 12%, depending on product category and order value.

The platform also applies listing fees, store fees and international transaction fees.

Cdiscount: the platform dedicated to the French market

Created in December 1998 by the Charle brothers Cdiscount is a 100% French marketplace. It also offers a wide range of products, from household appliances to furniture and jewelry.

Advantages:

• Ideal for reaching a French audience . Cdiscount has a strong base of loyal customers in France.

Disadvantages:

• Limited geographical scope . Cdiscount only reaches French customers. However, it can deliver to 9 European countries (Germany, Austria, Belgium, Spain, Ireland, Italy, Luxembourg, the Netherlands and Portugal).

• Little control over customer relations because the platform manages the after-sales service itself. This gives you less opportunity to adjust your strategies or study your customers' preferences.

Prices:

Cdiscount propose a single subscription plan at 39.99 euros per month . It also applies sales commissions at a single rate of 15%. (except for certain product categories).

The commission for non-new products is increased by 2%.

Rakuten: the Japanese marketplace

Created in Japan in 1997, Rakuten only arrived in France in 2010, initially under the name PriceMinister, before reverting to its original name in 2018.

Its advantages:

• Existence of a loyalty program to encourage user purchases (with Rakuten Points)

• Control over customer relations . The platform encourages sellers to interact directly with their customers.

Disadvantages:

• A lesser-known platform than giants like Amazon or eBay, for example . However, this can also be an opportunity for new brands that want to launch without facing too much competition.

Prices:

Rakuten applies 3 types of fees:

• Subscription fees with a freemium Starter pack and an Expert pack at 49 euros per month.

• Management fees which vary from 0.15 euros to 5 euros depending on the price of the goods sold

• Commissions on sales which vary from 8% to 14% depending on the type of subscription.

Etsy

Unlike the other platforms on our list, Etsy has more precise positioning. We can talk about a niche platform specifically offering handmade products, crafts, creative or vintage supplies.

Advantages:

• Ideal platform for reaching targeted, international customers typically drawn to artisanal and vintage products.

• Showcasing designers and small vendors . Etsy is a platform on a human scale, leaving room for small designers to gain market share.

Disadvantages:

• Increasing competition in certain categories . The jewelry and home decoration categories are becoming increasingly competitive.

Prices:

Etsy applies the following sales fees:

• 6.5% on each sale

• 0.20 euro listing fee per product sheet

• External and internal advertising costs

How do I sell on a marketplace?

Here are our tips for selling successfully on a marketplace:

• Choosing the right product by analyzing the most popular products on the marketplace. Two strategies are then possible: either to offer the same type of product, or to stand out from the competition by offering a unique type of product.

• Apply a dynamic pricing strategy to set a competitive price.

• Optimize your ads by adding high-quality photos, detailed descriptions and relevant keywords.

• Optimize your visibility by investing in advertising. Most marketplaces offer a paid advertising service. This is one way of increasing your sales on the platform.

• Providing quality customer service for positive customer reviews.

• Analyze your results . Remember to track relevant KPIs and adjust your strategies accordingly to optimize your results.

How do you choose the right marketplace for your product?

With so many different marketplaces to choose from, it's all the more important to select the right one for the type of product/service you're offering.

Here are some criteria you can take into account to make the best choice:

• Your product type . If your product is of the generic type, you can integrate generalist marketplaces such as Amazon, Rakuten or Cdiscount.

On the other hand, if you offer unique products or need to target a specific niche, it's best to choose a specialized marketplace.

• Your target audience . Each marketplace has its own customer profile. On Amazon, for example, you'll find customers looking for diversity and fast delivery. If you're targeting a specific niche, opt for a marketplace that targets this specific audience.

Similarly, some marketplaces have a localized customer base, while others can reach an international clientele. The choice you make depends on your targets and objectives.

• Fees and commissions . Each platform has its own pricing policy. You need to analyze the various costs in advance, as they have a direct impact on your sales margin. You need to make sure that your prices allow you to cover your costs without affecting your margins.

• Features and functions . Some marketplaces offer advanced services such as logistics, advertising and loyalty services. Choose according to your needs.

• Check the marketplace's reputation . Check customer reviews and make sure the platform is reliable before integrating.

Marketplace fees and commissions

Fees and commissions are a fundamental criterion for choosing a marketplace, as they play a key role in your profitability and overall strategy. So be sure to analyze the different fees charged by the platform before you get started.

Here are the most common types of fees charged by e-commerce platforms:

• Sales commission . This is the percentage charged by the platform on each sale made. Amazon, Rakuten and Etsy all use it. On the other hand, other platforms do not charge a percentage on sales, but have a different pricing model. Examples include Leboncoin and Facebook marketplace.

• Online fees . These are fees charged by certain marketplaces such as eBay for each product put up for sale, regardless of whether the product sells or not.

• Payment processing fees . They are charged in return for processing credit card payments, for example.

• Subscription fees. Some platforms offer dedicated subscriptions for high-volume professional sellers.

• Logistics costs . These are the costs incurred when you use the platform's logistics services (storage, packaging, warehousing and shipping).

Heropay: your ally for selling on marketplaces

The marketplaces' operating system is such that sellers do not receive immediate payment for their sales . It may take some time, which varies from marketplace to marketplace, to receive these payments.

And if the company doesn't have sufficient cash reserves, this can lead to cash flow problems and even default on payment.

Heropay was designed to respond precisely to the needs of VSEs/SMEs who offer their products on marketplaces. Our service offer helps prevent these cash flow problems linked to lack of liquidity.

Indeed, the advances payment on the day following order confirmation.

It can also advance payment for your supplier purchases. It is then up to you to reimburse it, while benefiting from payment facilities such as deferred payment (after 60 to 90 days) or instalments (in 3 or 4 instalments).

These payment methods allow you to benefit from optimal cash flow management to prevent your WCR from growing.

To sum up, when faced with such a wide variety of marketplaces, you need to use the right criteria to make the best choice. Your type of products, the fees and commissions charged, your target clientele and the functionalities offered are all criteria that can be used to choose the marketplace that's right for you .

By advancing the payment of your sales, Heropay helps you avoid the negative impact of marketplaces' payment delays on your cash flow.