15.03 – Founding Third-Party Digital Storefronts
Online marketplaces are now the go-to platforms for a significant share of global purchases. Leading the pack is Amazon, which had over 5.2 billion unique visitors in June 2020 alone. However, in terms of total sales, Chinese platforms Taobao and Tmall, operated by Alibaba Group, surpass Amazon.
Not surprisingly, Amazon and eBay are the two biggest e-commerce outlets used by U.S. retailers. Both platforms offer vast customer reach but operate differently. Amazon provides a structured retail environment and often handles fulfilment for a fee, while eBay is more of a marketplace provider, offering tools to help promote products. Each platform offers access to millions of shoppers but comes with its own set of challenges and competition.
Selling with eBay
Before deciding on a digital storefront, it’s essential to understand what eBay offers compared to Amazon. Here are some key differences:
- Market Atmosphere: eBay feels more like a marketplace, similar to an online farmer’s market, where individuals list and sell personal goods at discount prices. Unlike other sites, eBay provides tools and guidelines for selling, but you manage the rest.
- Product Variety: eBay hosts a vast array of products, often making it harder for individual items to stand out due to competition from both merchants and individual sellers.
- Lower Selling Fees: eBay generally has lower selling fees, allowing you to retain more revenue from sales.
- Trust Perception: eBay is sometimes seen as less trustworthy, akin to a large garage sale, compared to more customer-centric sites.
Tips for Success on eBay
- List in Multiple Categories: Increase visibility by listing your product in all relevant categories. For example, list a winter coat as both a jacket and a coat.
- Offer Free Shipping: eBay prioritises listings with free shipping in search results. Ensure your overall price covers the cost of standard shipping.
- Avoid Keyword Spamming: Only use relevant keywords to avoid penalties and potential removal from the site.
- Achieve Top Seller Status: Maintain high seller ratings by offering fast, responsive, and honest transactions. One bad review can deter potential buyers.
Selling with Amazon
Studies indicate that more than half of online shoppers start their product search on Amazon. As a retailer, you can either sell products with Amazon handling payment processing or become an Amazon seller, paying a monthly fee for listing and fulfilment services. Here are key strategies for success on Amazon:
- SEO Management: Continuously optimise your product listings with keywords aligned with Amazon’s search algorithm (A9). This will help improve your product ranking in search results.
- Buy Now Button: Ensure your product is eligible for the Buy Now button, which facilitates quicker purchases and increases sales.
- Maintain High Standards: Uphold high standards for product quality, pricing, and customer service to maintain top search result rankings and Buy Now button eligibility.
- Monitor Listings: Regularly check your product listings to ensure they haven’t been suppressed. Maintaining top scores for product quality, delivery times, and customer service is crucial.
- Seller Fulfilled Prime: Participate in this program to make your products eligible for Prime listings, which often translates to higher sales. You’ll need to manage two-day free shipping, but the increased visibility typically compensates for the cost.
- High-Quality Images: Use clear, high-quality images that showcase your products effectively.
- Compelling Copy: Write clear, compelling product descriptions with bulleted key features and specifications.
- Customer Reviews: Encourage and include customer reviews and answers to questions to build trust and improve search rankings.
By carefully selecting and managing your presence on these platforms, you can significantly expand your reach and boost your sales. Both eBay and Amazon offer unique advantages and require specific strategies to maximise success.
