As a small business owner, you may find yourself looking for exciting, creative opportunities to sell things. Branching out can help you build a new customer base and increase revenue. One way to do so is through e-commerce.
E-commerce has revolutionized the way that businesses sell goods. Whereas brick and mortar stores limit your customer base to a particular geographic area, e-commerce websites increase your customer base to practically anyone with a computer or smartphone.
Studies predict that by the end of 2019, there will be more than 1.9 billion global digital buyers. Another study conducted by National Public Radio and Marist College found that more than three-fourths of adults in the United States shopped online.
While opportunities are abundant, becoming an online seller is daunting. How do you get started? Should you use first-party sellers or remain a third-party seller? We’re here to provide you with everything you need to know about online marketplaces. We’ve included tips on how to open an e-commerce site and a list of the top online markets to help you get started.
Image Credit: DepositPhotos.com.
The benefits of selling in online marketplaces
If you’ve yet to set up an online marketplace, you may be wondering whether doing so is worth the trouble. However, doing so offers small business owners numerous benefits.
The most significant benefit of online marketplaces, by far, is the ability to expand your customer reach. As we mentioned, retail sales in a physical store limit how many customers you can attract. Online marketplaces can introduce you to millions of customers who wouldn’t have otherwise heard of your product.
Advanced technology and data surpluses
Selling online also allows you to keep track of customer data. This is easier thanks to algorithms and smart technology. For instance, imagine a customer visits your website, puts something in his or her shopping cart, and then leaves. Your software can automatically send them an email reminding them to return to your store, complete the order, and checkout.
Additionally, once a customer places an order, you can begin directing your marketing efforts toward them. Targeted advertising allows you to pinpoint relevant customer demographics and stand out from your competitors.
For instance, imagine you sell clothing online. A customer from Arizona purchases outdoor moisture-wicking apparel for the summer. Instead of sending out general advertisements, which may include information about your winter clothing, you can choose to only send this customer ads about warm-weather gear. Selling online allows you to collect, store, and fine-tune information about your customers.
Selling online can also promote customer loyalty. If a customer likes your products, they’ll keep returning to your website. By creating an online marketplace, customers will know precisely where they can find you.
Online marketplaces are also convenient because you save the customer from having to get in the car and drive to the store. Instead, they can purchase their favorite brands from the comfort of their own home, and they’ll know what to expect when doing so.
Image Credit: DepositPhotos.com.
Understanding how online marketplaces work
If you’d like to establish a presence in an online marketplace, you should first understand how they work. When developing an online marketplace, you have the choice between working with first-party sellers or operating as a third-party seller.
In a first-party seller relationship, you’ll act as a wholesaler to retailers like Amazon and Walmart. The retailer will submit a purchase order, and you’ll supply them with products. Once these companies get a hold of the product, they can set the sale price.
So if you go with the first-party seller business model, you give up control of your product. This can be a tough pill to swallow for many entrepreneurs and small business owners. Additionally, your own products are listed next to those from other companies. Working with a first-party seller could make it challenging to establish customer loyalty.
On the other hand, you know that you’ll receive payments for your orders. When a retailer submits a purchase order for products, you can then send an invoice and receive payment in your bank account before the retailer sells the product to the end-user — meaning that with first-party sellers, you’re selling to the site as a wholesaler rather than to the consumer as a retailer. Additionally, you don’t have to deal with the hassle of building a marketplace. The retailer will list products for you.
The other option you have is to operate as a third-party seller. As a third-party seller, you act as a retailer. You control the sales price of your product. Many business owners like that operating as a third-party seller gives them direction and control of the product that they’ve invested so much of their passion and pennies in.
However, this also means that you’re going to need to invest more in onboarding and maintaining your store. As a third-party seller, you’re responsible for shipping products. You’re also responsible for things like customer support. If you use a third-party platform — a website that allows you to operate as a third-party seller — you’re accountable for paying listing fees and seller fees.
Perhaps the best approach is a hybrid model, where you utilize both first-party and third-party sellers. Many business owners choose to begin operating as a third-party seller, build a brand, then expand to first-party sellers to provide customers with more convenience and access.
Image Credit: DepositPhotos.com.
Tips for selling in e-commerce marketplaces
If you’re looking to get started in an e-commerce marketplace, consider these tips to help increase the likelihood of success.
Figure out your strategy
Selling online is not something that you should do out of the blue. You should take time and carve out a plan before you get started. Start by considering which sales channels and product range you’re going to use. Are you only going to sell online? Or will you still maintain physical locations? Will you list all of your products online? Or just some of them?
Part of crafting a good strategy is determining your budget as well. Consider everything from marketing and shipping costs when deciding how and where to sell your products.
Submit your products to Google Shopping
Once you’ve picked the appropriate marketplaces to list your products, don’t forget to submit your products to Google. Have you ever searched for a product — something like, say, a “rustic table” — and seen a bunch of products listed at the top of the search?
These products are there as part of Google Shopping. Submitting your products to Google Shopping will significantly increase your product’s opportunity for exposure.
Use reliable accounting software
When you open your e-commerce business and begin to sell products online, you’re going to open yourself up to a whole other world of accounting. For instance, you’re going to need to pay state sales taxes if you establish a nexus.
You will also need a way to accept credit card payments online and pay the transaction fees associated with doing so. You may want to consider taking other forms of payment, like PayPal, as well.
You’ll also have an influx of revenues and expenses that you’ll need to track. You’ll need to monitor things like inventory. All of this is exponentially more complicated if you offer a wide range of products.
Make sure that you use reliable accounting software that can provide you with in-depth business statistics. An all-in-one accounting software can help you streamline and manage your online sales.
Image Credit: DepositPhotos.com.
Where to sell online
If you’re looking to operate as a third-party seller, one of the first options you’ll likely consider is eBay. eBay sellers gain access to customers who conduct more than 11 million searches per hour. eBay hosts everything from shoes to antique collectibles.
But you may find the eBay market too overloaded with other sellers. If you’re looking for a platform where you can stand out, this list of eBay alternatives includes sites that allow you to operate as a third-party seller.
- Rakuten.com: This site for online merchants provides access to more than 9.5 million customers.
- Etsy.com: Etsy is still the largest online marketplace for handmade and vintage items.
- Shopify.com: This is an e-commerce platform that allows businesses to sell online, in person, and over social media.
- Alibaba: Alibaba is a Chinese online marketplace and one of the largest in the world. Alibaba operates Alibaba.com, Tmall, and Taobao.
- Jet.com: Jet is an online marketplace that aims to keep costs as low as possible for buyers and sellers. The site sorts by various factors and product categories to help match buyers and sellers.
- Craigslist: Craigslist is another well-known third-party site. Craigslist offers customers access not only to products, but to things like jobs and housing as well.
- Bonanza.com: More than 12,000 sellers indicated that Bonanza was their preferred avenue to sell online.
- iOffer.com: This commission-based marketplace gets a decent amount of traffic.
- eCRATER.com: eCRATER is a free market that offers customizable online stores to retailers.
- ArtFire.com: Like Etsy, ArtFire is a free marketplace geared toward sellers of handmade products.
- Offeritem.com: This free marketplace provides an online store and shopping cart to sellers.
- ShopHandmade.com: Like the name suggests, this marketplace is geared toward sellers of handmade items.
- Zibbet.com: Zibbet is a fixed-price marketplace for handmade goods, fine art, vintage items, and crafting supplies.
- Atomicmall.com: This marketplace has both set price and auction options.
- Sell.com: This platform is organized in a classified ad format.
Grow your business today
If you manufacture and sell goods, you need to enter the e-commerce marketplace. Online shopping has grown tremendously, and it’s expected to continue to do so in the coming years.
Even though starting your online business may be intimidating, it can be well worth the investment. With these tips and list of viable e-commerce platforms, you should have no problem getting started.
This article was produced by the Quickbooks Resource Center and syndicated by MediaFeed.org.
Image Credit: DepositPhotos.com.AlertMe