Navigating E-Commerce Channels: Are You Missing the Boat on Marketplaces?

September 4, 2014

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With the assistance of Redshift Research, we conducted the Multichannel E-Commerce Study with more than 200 respondents — US and UK retailers that already sell products online. Respondents were e-commerce decision makers at companies that averaged $3-5 million in revenue in 2013. The survey was intended to pinpoint e-commerce trends, as well as help identify opportunities and challenges in the online market.

Online marketplaces are charging through the world of retail, drastically reconstructing buying and selling habits. In fact, according to our Multichannel E-Commerce Study, 90% of retailers surveyed are selling on marketplaces, and almost three quarters (69%) reported that over 20% of their revenue comes from online marketplaces.

Amazon

Are you wondering who’s leading this online marketplace stampede? Amazon. Amazon is the king of Online Marketplace Land. Amazon wears the crown, rules the masses and is dominating the world of retail.

We aren’t exaggerating. Of the retailers surveyed, 84% are currently selling products on Amazon. Emerging marketplaces are also on the rise, with at least 15% of retailers selling on Newegg and Sears.

Online marketplaces can provide a heaping amount of benefits for your business, but as with most new business endeavors, they can also come with challenges. Our surveyed retailers actually said that the number one challenge with selling on marketplaces is maintaining competitive pricing. However, standing out from the competition and managing product quantity followed close behind.

Fulfillment By Amazon (FBA)

Keeping your products’ prices in line with, or cheaper than, your competitors’ is a challenge that our survey results indicate that a lot of online retailers are struggling with. Well, here’s where King Amazon comes back into the picture. A key advantage of selling on Amazon is the option of using the fulfillment by Amazon (FBA) feature, which a third of the retailers surveyed are using.

With FBA, Amazon will handle your inventory, packaging, shipping and customer service. A retailer that uses FBA is even eligible for Amazon Prime’s free shipping option, but a retailer won’t receive the Prime label if they fulfill orders independently. Free shipping can be a heavy influencer in winning a consumer’s dollar.

In the widely popular world of marketplaces, Amazon is dominating the retail space, and pricing remains the largest challenge. Be sure to tune back in next week for an overview of how retailers are embracing cross-border trade to increase international revenue.

 

Blog post by Jordan Nowlin, social media and blog manager, ChannelAdvisor


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For a sneak peek of some of the Multichannel E-Commerce Study results, check out the overview, Navigating E-Commerce Channels: Is Your Online Business Sinking?