Although more and more people are making the decision to have their own online store, online sales through marketplaces are a great attraction for all those who start a business or are looking for an alternative that gives them more exposure.
This constantly growing sales channel has unique characteristics, and in this article we are going to learn about them. If it is still not clear to you what a marketplace is and how it works, let me explain more about these e-commerce tools and how to get the most out of these platforms.
Shall we start?
What is a marketplace?
A marketplace is a website that connects buyers with sellers to carry out a commercial transaction. They are usually managed through a third party and serve as a dissemination platform for different businesses and sellers, making it possible for them to advertise products, from a position of trust.
Imagine a marketplace as a large shopping center, where you can find various brands, multiple sellers as well as different prices. All managed through a company that takes care of the maintenance and performance of this space for a standard fee covered by the sellers.
This concept is not new in Mexico or in Latin America, since in 2012 we already had well-established marketplaces such as Mercado Libre, Linio or Ebay, only that in recent years we have experienced exponential growth, influencing the pace of e-commerce and buyers’ preferences.
How does a marketplace work?
The operation of a marketplace is quite simple. Usually you need to open an account on the platform. Hence, to sell on the site, photos, descriptions and other elements are required to create the publication.
The profitability of these pages, or how a marketplace works itself, is through sales commissions. To sell a product they can charge you a commission that goes from 9% to 30% depending on the category of the item, if it is new or used, among other conditions.
When making the sale, the money resulting from the transaction is retained by the platform until it is ensured that the customer has received their purchase. Upon confirming this, the profit is given to the seller, with previously accepted commission discounts.
What types of marketplace exist?
There are different types of marketplaces, such as vertical, horizontal, B2B, C2C or B2C, more than anything we can distinguish them by the type of articles that we find in them and the type of audience they are aimed at. Below I explain what each of them is about.
Types of marketplace by articles
Vertical or niche marketplace
A vertical or niche marketplace is one in which sellers or brands dedicated to a specific product meet. A good example would be GoTrendier, which is an exclusive marketplace for garments and clothing, or perhaps those like SoloAutos where they are dedicated to buying and selling vehicles.
Horizontal or general marketplace
A horizontal or general marketplace, unlike the previous ones, is one in which you can find various items, usually grouped by categories. Good examples of these marketplaces would be Mercado Libre, Amazon and Linio.
Types of marketplace by audience
B2B or corporate marketplace
They are classified as B2B (business to business) to those platforms dedicated to companies or groups of companies, often sales are for hundreds or thousands of units, having the advantage of acquiring products at wholesale prices. Alibaba would be a good example of this type of marketplace.
C2C or social marketplace
The C2Cs (consumer to consumer) they are platforms aimed at connecting consumers with consumers. The connection is much more social, helping sellers find customers interested in their products. Facebook Marketplace is one of the most used and well-known in Mexico belonging to this type of site.
B2C or global marketplace
B2C marketplaces (business to consumer) They are perhaps the best known by users, since they are spaces designed for brands to advertise their products and find new customers. Ali Express and Wish are some of the ones you can identify that fall into this category.
What are the most popular marketplaces in Mexico?
According to brand awareness when buying online, the most popular marketplaces include:
amazon marketplace
although to sell on this site you must consider the costs for being part of this platform, which at the moment are $600 MXN per month plus a commission for sale, which ranges from 8% to 20%, with jewelry being the category with the highest commission.
Free market
Mercado Libre is another of the fastest growing marketplaces in our country. While there is no monthly fee to post to this platform, they range from 8% to 22%. It is possible to sell without commission if you meet certain conditions, however it is more focused on users who sell used items or who only have one product in stock.
AliExpress
This platform of Asian origin has grown in notoriety in the Mexican market, in addition to being one with the lowest transaction fees, ranging from 5 to 8%. It is a good alternative for those dedicated to dropshipping, although there is strong competition, especially from Asian businesses with quite affordable prices.
Wish
Similar to the previous one, Wish is another great marketplace for Asian products and one that has positioned itself stronger in our country. Although it has diversified, most of the businesses that are advertised on this platform come from the East. There is no subscription fee to sell on Wish, but there are item-specific fees, which depend on the seller and the business.
Facebook Marketplace
Facebook Marketplace is the best known social platform in Mexico. There is no subscription fee or sales commission. Any user with a Facebook account can publish articles without any restriction, although the issue of shipping and payment methods are the responsibility of the seller. Sales are often scheduled for physical or parcel delivery. If this platform stands out in anything, it is in the geolocatable suggestions, showing users different products depending on the region they are in, giving the user the opportunity to select from one kilometer to 200 km around.
Advantages of selling on the marketplace
After having seen the different types of marketplaces, it is time to talk about their benefits, since if you are starting a business they can be widely recommended tools to accelerate your positioning. Some of the advantages of selling on the marketplace are:
you have a lot of visibility
For new companies, a marketplace can be the ideal channel to promote their products in the digital market. For those who already sell online, betting on this model is also very positive. Marketplaces like Mercado Libre, for example, receive millions of users daily. In this way, the chances of your products being seen and bought are very high.
Easy posting of articles
If marketplaces are characterized by something, it is that they have optimized their platforms not only so that the customer can easily find what they are looking for, but also that they have been concerned about how the sellers publish the articles, to the point of doing it so user-friendly that a person with no programming or design knowledge can upload their products in a matter of minutes. In addition to giving tips to users on how to have greater visibility by posting good quality photos or with a white background.
You benefit from cross-selling
In marketplaces, your customers can find complementary items that they are interested in. They usually have sections like “Other users also bought…” or “Items similar to your search” and so they may find you or improve the average ticket amount by suggesting other products available in your store that are related to the one they were looking for. originally. For example, if you are dedicated to selling cases for smartphonesyou may appear in the searches of users who are interested in buying a device.
Disadvantages of selling on the marketplace
Although a marketplace can bring many benefits, it also has certain disadvantages that you should consider, especially if your business is in a maturing phase.
There is great competition
Just as you can reach a large audience, there are also a large number of sellers on these platforms, with prices perhaps more competitive than yours. Just go to your favorite marketplace and search for an item like “flowery dress” and more than 12,000 publications will appear among which you will have to make your way. Standing out from the competition, in most cases, requires an additional cost or comply with the conditions that the platform demands.
You are subject to the conditions and commissions for use of the service
It may be that at the beginning the commissions do not seem so high to you, however it is possible that later they will lead you to increase your prices to cushion the cost of the service. In addition, they decide the order in which the articles are displayed, the commissions for free shipping, among other things. The rules of the game are in your hands and if you do not accept them, your publications may be removed or have less visibility.
Difficulty distinguishing yourself from other advertisers
If there’s one thing marketplaces have in common, it’s that all posts look similar. If you want to include your brand data, colors or even your logo, the spaces to differentiate your publication from the rest are relatively few. Therefore, although you can initially generate many sales, building your brand and generating recall is an extremely difficult task to do, if not impossible.
Clients are not entirely yours
Perhaps you saw this coming from the previous point, since it is something very logical, however the clients that you get to acquire are not really yours, but from the marketplace, since where they are entering is the platform site, it is there where brand awareness is created and when they talk to friends or family about their purchase they will probably say “Oh yeah, I bought it on Amazon”. The marketplace will be the one who manages the entire purchase process and will have the customer’s data, leaving your business in a relegated position.
How to publish in marketplace?
If you are wondering how to publish in a marketplace, actually, although the process can vary a bit from platform to platform, all these sites have a modus operandi similar, for which you must follow these steps:
Define what you want to sell and the price
Before publishing in a marketplace, we recommend that you choose the products that you will put on sale and do a search within the platform in which you are interested. So you can see average prices and what the competition is offering.
After this search, you need to define the prices. In doing so, consider the…
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