Often, it may seem as if Amazon/Amazon Business is the only online rodeo in town. It’s not. This was made abundantly clear during OPI’s second Insights webinar – Monetising
the Online Marketplace Opportunity.
The webinar, held on 3 March, provided a deep dive into how to embark on the journey of selling on online marketplaces, increase efficiencies, and find the right balance between optimisation and price.
Looking specifically at the European online marketplace – worth almost €180 billion ($196 billion) in 2020 – Amazon commands a share of around 25%, or €44 billion. That’s impressive, but it still leaves a sizeable 75% from players such as OnBuy (UK), ManoMano (France), Conrad and Mercateo Unite (Germany), and Bol.com (Benelux).
How to get started
The one-hour, extremely well-attended discussion was hosted by OPI Commercial Director Chris Exner. It featured guests Bob Boekema, founder and Managing Director of TFE Agency, and Marc Kaashoek, Sales Manager at European office furniture company Sedus.
Being organised, Boekema explained, is key to becoming a successful player in the online marketplace sector, particularly in terms of appropriate pricing and content. Kaashoek added that employing a specialist agency such as TFE helps, as every platform maintains its own way of dealing with these two components and it can be a bit of a minefield to negotiate.
A top-down plan involving all relevant company departments is imperative too. As is managing expectations. Kaashoek revealed that Sedus chose to start in the relatively small Dutch market in order to learn from any mistakes. The vendor initially concentrated on figuring out which products were feasible to sell via a marketplace. It also investigated aspects such as optimal box sizes for logistical purposes, lead times, and eventually understanding which marketplace would fit best in each country.
Both webinar guests stressed the importance of content, especially concerning language. Kaashoek explained that traditional industries tend to still use B2B terminology. But this isn’t necessarily the most appropriate choice for the internet as it works through SEO – a different language entirely.
“It’s not how you want to be found, but how your customers are looking for a product,” he remarked. Boekema added that SEO is a critical success factor as up to 60% of traffic to marketplaces can be sent via Google.
In terms of building the necessary e-commerce infrastructure, Boekema suggested the inclusion of several features: a good product information management system; the proper technology to manage invoicing, admin, ordering, and track and trace, especially if you want to trade directly on a marketplace; and the right customer service and fulfilment facilities. Tying all these together requires a dedicated project leader and team.
Pricing considerations
Managing pricing online is tricky. E-commerce has no borders and prices need to be policed and checked on a weekly or monthly basis. Kaashoek also stated the importance of setting minimum pricing, including VAT, as consumers expect it. He further urged participants to be prepared to answer questions from existing customers if products are sold cheaper elsewhere online.
Invariably, pricing comes down to the type of company, current strategy and how it is executed. Depending on objectives, it could merely revolve around RRP to build exposure online. Or, as Boekema pointed out, some brands are increasingly looking for a firmer handle on the marketplace business – even building a direct-to-consumer approach – and are getting to grips with content, user experience and pricing.
Marketplace sellers always need to be aware that goods may incur various taxes which vary by country, and the administration of this component should not be underestimated. Then there are logistics costs to consider related to shipping, picking, packing and storage.
Finally, be mindful of the cost associated with returns. In our space, these are relatively low – about 5% – but it’s certainly something to bear in mind. Home decor marketplaces, for example, work with an average returns rate of 20%.
As Boekema concludes: “You’re allowed to make mistakes. If you get a calculation wrong with the pricing, it can instantly be changed. If an order is incorrect and goods are returned, learn from it. Adapt – it’s not the end of the world.
“Granted, most marketplaces are currently focused on B2C. But tomorrow it will be B2B and you need to be ready. So get involved.”
To be eligible to attend OPI Insights webinars at no cost, please contact OPI Commercial Director Chris Exner at chris.exner@opi.net for membership and subscription information.
