How to Extend a Marketplace Only Business to Sell on an Ecommerce Website

The biggest criticism of marketplace online retailers is that they are far too complacent.

I’ve seen it first hand, there are an abundance of powersellers on eBay who are stuck in their comfort zone and refuse to branch out.

It can be understandable though, you’ve mastered a specific marketplace, you have your customer base and you don’t have the time or resources to kick start your own webstore.

You may find yourself asking, what challenges will I face with setting up my site? How long does it take to generate sales? How big is the learning curve?

Throughout this article I’ll break this down for you and there’s some great first hand tips from retailers who have been through this process themselves.

Don’t rely solely on Marketplaces

It’s worth noting initially that setting up a website couldn’t be easier in 2016. Platforms like Shopify and BigCommerce have made it so simple, that even the biggest technophobes can follow through with it.

Site powering apps and website designs can be added in the click of a button. Otherwise complicated tasks such as site hosting and credit card processing are handled by the platforms themselves.

The biggest disadvantage for solely being a marketplace only business is that it is very restricting. Lisa Chu, owner of Black N Bianco admits “It’s really difficult to re-market to my customers in the marketplace shops, because there is no customer database or the capability to do that on a platform like Amazon or eBay”.

This is a point that is furthered by Devorah Neiger of Medshop. She initially started her business on marketplaces because of the “tremendous customer base it would bring us”.

Neiger would be right to think this, as Amazon especially receives more consumer searches now than Google. In fact 44% of all online shoppers now go directly to Amazon. However Neiger has experienced first hand the problem Amazon sellers face. “When an item sells well, Amazon will often start selling the product and compete with you and there is no winning against Amazon”.

Amazon has come in to much criticism from sellers for this very reason. It can also be difficult to build up a trusted customer base, which can’t be said for owning your own webstore. Neiger bemoans the fact that there are no “repeat business or branding capabilities” and that Amazon will predominantly favour companies who use Amazon FBA when it comes to winning the buy box.

When an item sells well, Amazon will often start selling the product and compete with you and there is no winning against Amazon

There are some upsides

It’s not all bad news with marketplaces however. Amazon 4x as many sellers make a million on the site as opposed to eBay. Whilst 10% of all eBay sellers make a profit margin of 50% or more.

It’s worth noting as well that you won’t have to pay a cent when it comes to site development, design, or any general rectifying of site errors with marketplaces.

When Jennifer Burt owner of Gypster Veil transitioned her eBay business to her own site, she recalled how the experience of eBay had helped her. “I had a greater understanding of customer service. Customers let me know that they loved free shipping, fast shipping, hand written notes, and nice packaging”.

Despite its pitfalls in regard to remarketing and competing against the marketplace itself, it does seem it’s a great place to start if you are new to online selling. Additionally there are now so many emerging marketplaces such as Etsy, Rakuten, Wanelo and Jet.

Patience is a virtue

Once you have chosen your favoured ecommerce platform, it’s worth noting that you have to remain patient in the early stages.

Roberta Perry of ScrubzBody admitted she had waited 2 months for her first sales when she decided to expand her eBay business to WooCommerce. Whereas both Chu and Neiger said it was more nearer the 6 month mark before they started to make sales.

Chu even goes as far to say that she “didn’t understand what a domain name was”. It’s understandable that the move from a marketplace to a website is a massive learning curve for anyone.

What Chu did to her advantage was to learn the topics herself, something that Neiger admits would have been great in hindsight “Do not depend on the ‘professionals’ and believe they will be the ones to grow your business. Nobody cares about your business like you do. You need to learn about marketing, Adwords etc so you can properly monitor what is going on with your company”.

Chu expresses all online sellers looking to learn about how Google ranks your site (and they should), could do much worse than check out Moz. She mentions how “the community forum is filled with users who are very generous with sharing their knowledge”.

It may feel in the early stages that there is far too much to learn, Burt notes novice sellers should register and listen to CreativeLive seminars. This cover a broad range of subjects and are great for putting on in the background while you work.

Driving sales to your website

So how did these retailers manage to convert people to their site and why would they want to? Chu explains “I would gladly take a 5-10% lost in profit to gain a customer acquisition on my e-commerce site. I can easily access all of my customer’s information and re-market my business back to them. Plus I can build customer loyalty through reward points, giveaways and discounts”.

Due to the competitive nature of marketplaces, prices tend to be very competitive. This can be difficult therefore to bring people to your site, but this is where you need to think outside the box. Burt says that included “a thank you card with an incentive to tag the website in a pic of them wearing their purchase, in exchange for a discount code”.

The benefit of a website, is that if you can send the right communication at the right time, you can convert buyers into fans or brand advocates. So impressing early on is essential for your business.

So what other great marketing tips did our retailers questioned have for budding sellers? Perry advises that retailers look into Animoto or VEED’s video editor, as she made several videos that were well received. Andy Flynn of Aspen Valley Vapes used LaunchRock to create a landing page, one month prior to his launch and “built an email list of about 1,000 people”.

Flynn is also an advocate of commenting in Facebook groups which he states had “head over heels the highest conversion rate”. This is a tactic the company I currently work for employed as well. What’s great about Facebook groups is that you can search for certain keywords within a group. In our example we integrate with Shopify and would identify people in these groups talking about the subject, using the search bar.

 

 

Burt said how she partnered with her local university whose internet marketing class were running a competition where “each group gets paired with a business and is given money to run the campaign”. So it’s worth checking if any local schools/colleges to you are running something similar to this.

The possibilities are endless

As we’ve established throughout this article, marketplaces are a great entry into the online selling and can work gloriously alongside your website as an extra source of income. However, they pale in insignificance when compared to the possibilities a website brings.

When I questioned our retailers how their marketplaces now compare to their websites, Perry summed it up perfectly. “There is no comparison. You can get lost in the noise of eBay, whereas our website keeps the customer there longer, which converts to more sales”.