Are you worried about your competition? Does the threat of rival sellers perhaps keep you and your team up at night?

To an extent, all competition is healthy in business. It fosters innovation, encourages vendors to better serve their customers, and gives power to the consumer to determine who ultimately earns their loyalty.

But, staying too focused on outperforming competition in the short term is a nearsighted strategy. As critical thinker Edward de Bono said, “Companies that solely focus on competition will die. Those that focus on value creation will thrive.”

Related: A commissioned study conducted by Forrester Consulting on behalf of Mirakl and ChannelAdvisor found that marketplaces — when operated effectively — are likely to boost customer loyalty, increase average order values, and build trust.

The retail industry is a highly competitive space, especially given the rise of e-commerce and with it, the rising expectations of online shoppers.  Generally, shoppers have a multitude of options available to them, at their fingertips when browsing or making a purchase, putting pressure on the retailers to step up and meet these demands. It may seem counterintuitive at first, but that pressure is exactly why retailers must allow their competition into their online Marketplace.

Drive a broader selection, improve customer experience, and continue the cycle.


In a previous post, we explained why customer loyalty was the #1 reason to build your online Marketplace. Earning this loyalty is paramount to long term, sustainable growth. A key component of that experience is providing a one-stop shop for your category, allowing shoppers to find what they need by navigating conveniently to (and within) your Marketplace. This strategy requires allowing third-party sellers to compete with your own offers, on your own platform.

Sounds crazy, right?

Take Amazon, for example. The e-commerce giant has seen tremendous results from this strategy (virtually half of its annual sales volume!) Hosting additional sellers on its Marketplace gives shoppers the freedom to make the best decision possible. This move also increases Amazon’s product selection considerably, which is an important component of improving customer experience and keeping shoppers returning to this one-stop shop.

As Amazon grew, it lowered its cost structure by leveraging purchases, fulfillment infrastructure and logistics infrastructure, which consequently lowered the cost per unit of products. The lower cost structure allowed Amazon to lower its prices, which further satisfies customers, attracting more traffic and starting the virtuous cycle over again.

The company’s strategy aligns to Jack Welch’s famous three rules of business:

  • Number 1: Cash is king.
  • Number 2: Communicate.
  • Number 3: Buy or bury the competition.

If you’re staying up at night worried about competition, remember that you are presented with an opportunity today to bury your competition through a smart Marketplace strategy. Perhaps the best move you can make is to welcome your competition onto your Marketplace, owning the customer experience and reaping the benefits over time.

These benefits, according to Forrester, include:

  1. Capturing new revenue through commissions on sales, without the headache of storing and shipping items themselves
  2. Enhancing your customers’ shopping experiences by providing multiple, complementary products and services on a single website
  3. Building deeper relationships with consumers by increasing satisfaction and loyalty

To learn more about leveraging a Marketplace with third-party sellers, download the full report from Forrester Consulting.

Barry Murphy

Written by Barry Murphy

Barry Murphy is the Director of Content and Product Marketing at Mirakl. In this role, Barry leads the alignment of Mirakl's offerings to market needs for the next generation of online commerce. Barry previously ran product marketing organizations for X1 and Mimosa Systems (now part of HPE). Barry also had a highly successful stint as Principal Analyst at Forrester Research. Barry received a B.S. from the State University of New York at Binghamton and an M.B.A from the University of Notre Dame.

Subscribe to Our Blog:

Stay up to date with the latest marketplace news.