Last week Amazon announced that the Vice President of the Amazon Marketplace (a 12-year company veteran) would lose a number of his responsibilities to Doug Herrington, leader of Amazon's retail group. Amazon marketplace now makes up over half of the retailer’s total revenue, however the marketplace has been recently fallen victim to a surge in seller counterfeits and scamming tactics.
When using a PIM with your multi-vendor marketplace, quality standards can be embedded and automatically enforced, the performance of your vendors can be easily tracked, and non-performing vendors can be easily corrected or terminated.
Amazon and Alibaba have created massive marketplaces where buyers can purchase virtually anything they want from any location. To compete, many companies are looking to expand their product assortment and geographic reach by incorporating multi-vendor marketplaces into their existing eCommerce stores. There are risks to this strategy but most experts think the potential benefits outweigh them. For an in-depth look at both the pluses and minuses of a multi-vendor marketplace strategy, read on…
In January of this year, Gartner called out marketplace management as one of the hot topics in digital commerce for 2017. Marketplaces are a foundational element of any eCommerce strategy, underpinning and optimizing other projects such as omni-channel and personalization. Too often, though, retailers look at marketplace management as just another project, which is unfortunate when you consider the success other retailers have had with marketplaces:
Running online promotions can be a powerful way to boost sales. Having a Marketplace where 3rd party sellers can offer promotions to your customers will increase sales even further. Not only are online sales sensitive to pricing, but a Marketplace is unburdened by the constraints of retail. Without worrying about inventory stock, or the pressure of profitability, you can run Marketplace deals, sales, and marketing campaigns that drive real impact - surprisingly significant impact. The first time a Mirakl customer in the fashion space applied promotions on Marketplace products using the strategies outlined below, they realized a 272% growth in month over month sales revenue.
What would encourage one of your customers to switch brands?
The success of your Marketplace relies on your ability to not only proactively recruit a large number of sellers, but also maintain the quality of these partners. After all, they are an extension of your company’s brand and stewards of your organization’s promise to customers.
“Failure is success, if we learn from it!” - Malcolm Forbes
Learning from our mistakes is a surefire way to avoid making them in the future. When it comes to the world of online Marketplaces, there have been many examples of success. Just look at what Amazon has been able to create alongside Apple’s iTunes, Alibaba, Wayfair, or Jet.com (aquired this summer by Walmart for $3 billion).
The truth is, not all sellers make the cut. Some simply don’t have what it takes to perform well on Marketplaces. They either lack the internal structure or, in some cases, the willingness, to succeed.
Before you commit resources to training and onboarding, be sure to qualify the readiness of the seller. You should also leverage a rating system on your Marketplace.
Your sellers are a critical component of the virtuous cycle of your Marketplace. Without them, your product inventory remains limited, and your ability to grow is stagnated.