How An Online Marketplace Catalyzes Your Product Growth?
August 4, 2022
Post Views : 514 views
A website or application that enables buying from a variety of sources is known as an online marketplace.
The owner of the marketplace is not in the business of owning any inventory; rather, they are in the business of introducing users to other people’s inventory and facilitating transactions.
It has a lot wider selection than any retailer could provide.
The likelihood of them downloading an app that offers wider product selections than one retailer can provide.
This article covers a wide range of topics, including the nature of labour, benefits, and the potential of technology for online marketplaces. Let’s start now!
Let’s decode the online marketplace mechanism =>
Online marketplaces don’t have to maintain inventory, logistics, or product images, but they can shift this burden onto the seller. Sellers, on the other hand, get a dedicated area to manage their orders and sell their products. So how do these online marketplaces make money? Let’s explore.
Typical Earning Options of an online marketplace-
Subscription-based model: This is one of the most popular business models. This monetization model is characterized by the fact that a recurring fee is charged for access to the provider’s platform. This revenue model helps providers find new customers or reach out to potential customers and partners. However, the provider must receive sufficient compensation to continue the subscription.
Application fee: As the name suggests, in this model, vendors make a flat payment when applying for sale through marketplaces as application or registration Fees. Since the seller prepays, there is no need for complicated payment gateways. You can motivate vendors by highlighting benefits and offering incentives to buy early.
Commission model: Here you charge the seller a fixed fee or a percentage as a commission on sales. The platform can also charge both sellers and buyers for each conversion. In contrast to subscription-based models, parties work for free and only pay if they use the platform and make some kind of profit.
Product listing fee: This marketplace business model is commonly used in two-way marketplace platforms. In this model, vendors are charged a fixed or variable amount when they list their products. There are several ways to calculate the listing fee, but it should be easy for sellers to pay the fee. This can encourage you to list more products. Mixed Models: Depending on your industry, you can choose the revenue model that best fits your market. However, you shouldn’t follow the “one size fits all” approach. Multiple models can be implemented simultaneously. By combining multiple models, you can have multiple revenue streams.
Some large online marketplace providers successfully combine multiple models.
Advantages of an online marketplace –
Your sales will increase =>
In this digital era growing your product is not easy at all in the beginning. Depending on the industry, the time it takes for an online store to get off the ground is 6 to 18 months from launch. Therefore, it is not surprising that some sellers are attracted to large, immediate traffic markets.
A similar phenomenon can be seen in the offline world. There are brands and retailers with brick-and-mortar stores, but they are also paying for small spaces in shopping malls. They know they can reach thousands of more people by being there. Marketplaces act as online shopping malls. They open up a whole new world of customers for you and you can see it in your results. For example, Amazon claims that its business is growing in the market at the rate of 50%.
Reduced costs =>
Leading marketplaces take care of the platform, order fulfillment, SEO and even marketing strategy. Simply create your store, manage the products and prices you offer, and manage the orders you receive. However, if you are really successful, these fees may not seem so low. However you can always stop selling at no additional cost.
Grow your brand image =>
Establishing yourself as a seller in its market does not mean giving up your brand image. As a professional seller, you have your own brand name and logo.
This also makes life easier for customers: they can rate the shop themselves. Instead of choosing from other sellers in the same category, you can find our store on the marketplace and buy your products.
Payment is one of the most sensitive parts of online purchases. However, if the market has a good reputation, this prejudice can be overcome more easily.
Moreover, these platforms are well protected from all kinds of cyber-attacks, so security measures are superior to any online store. The market is also paying for sporadic fraud by fraudulent sellers and customers.
Go Global =>
If you try to sell overseas, you may not be able to sell it because the shipping cost may be double than product price. Another important factor in internationalization is the language barrier.
However, marketplaces tend to have lower shipping rates,in order to make sellers more competitive.
This is not a Marketplace issue. Because most of the multilingual platforms we deal with also offer customer support in their native language or English. On the other hand, the investment and effort required to reach these markets are enormous in terms of time and resources, thus reducing costs.
Future of Online Marketplace Technology
If you are still wondering if online marketplaces will thrive in the future or not. Let us assure you that Online marketplaces have a tremendous future. At the same time, online marketplaces are growing more and more. In the pandemic, drop shipping had already shown its benefits. Online marketplaces are like the dawn of the new age of technology. You can easily list the products online and hence your customers will receive the product finally at their doorstep. However, in the future, you will see more changes in the online marketplace technology.
The future of online marketplaces depends upon your perspective, and the kind of business you want to run. Drop shipping is perfect for those who are struggling to build their own digital infrastructure. So, listing your product online rather than drop shipping may be a better option if you care about the product. In this process, you can surely save a lot of time and effort.
How can we adopt online Marketplace Technology to grow rapidly?
Till now, we have understood that selling products through marketplaces is a smart strategy.
It is generally believed that the fewer constituent elements in a supply chain, the fewer entities taking a cut, and the greater the profits. Direct agreements with manufacturers are the most profitable supply chain for drop shipping businesses.
It is an order fulfillment strategy where products ship directly from a wholesaler or manufacturer to the customer, and the transaction happens in a multi-brand environment. There are numerous reasons to consider selling your product on cool marketplaces like Tooflee in 2022. The decision to sell on tooflee can grow your sales number in a very short time and effective if applied correctly.