Digital Transformation: the challenges a brand must face to sell on marketplaces

Selling online on marketplaces means brands have numerous opportunities to reach a vast audience of online customers.

The Covid-19 pandemic has boosted online sales, especially on platforms like Amazon, Zalando, and eBay, where today 9 out of 10 users shop.

Marketplaces are increasingly oriented towards the use of the D2C (Direct-to-Consumer) model rather than the wholesale model. However, this aspect poses greater challenges for brands, not always easy to face.

They must, in fact: understand the functioning of each marketplace, take care of shipments and returns, create multilingual digital catalogs, optimize margins, manage accounting, and provide 24/7 customer support.

So, how can brands sell online on marketplaces and succeed?

Marketplaces are virtual spaces that connect multiple sellers and brands to millions of potential buyers. They allow users to browse through thousands of products belonging to different brands and categories.

To increase online sales, establishing a presence on marketplaces can prove to be an effective choice. Numerous studies indeed testify that an increasing number of users regularly purchase from these platforms for at least three reasons:

1. Wide variety of products
2. Frequent promotions and competitive prices
3. Fast shipping

For businesses, selling on marketplaces means obtaining three advantages, including:

1. Access to new customers: these platforms enable an expansion of the potential consumer base.
2. Internationalization: thanks to marketplaces, it becomes easy to reach customers worldwide.
3. Opportunities for growth: in the e-commerce world, marketplaces represent the segment with the most significant growth in recent years.
4. Greater control of profit margins: the Direct-to-Consumer (D2C) model allows brands to maintain more direct management of sales and pricing.

Selling online on marketplaces can represent a tremendous opportunity for brands, but the challenges to face are equally significant.

Some of the most common difficulties that brands may encounter when expanding their business on these platforms are as follows:

1. High competition: Marketplaces can be highly competitive, so brands must find ways to differentiate themselves from the competition.
2. Price stability: Intense competition on marketplaces can lead to price pressure on products. This can negatively impact the brand’s profit margin and require careful pricing strategies to balance competitiveness and profitability.
3. Managing multiple marketplaces: A brand choosing to sell on multiple marketplaces must deal with the use of multiple platforms, each with its own characteristics and complexities. This may require additional resources.
4. Coordinating inventory and order delivery: Selling on multiple marketplaces demands careful management of inventory and orders to ensure timeliness and efficiency.
5. Handling returns and refunds: Marketplaces have different return and refund policies than brands. Customers request returns and refunds through the marketplace, and brands must adapt to its policies.
6. International exposure: Selling on international marketplaces brings challenges of visibility, communication, logistics, and sales management in different regions. Understanding the needs and preferences of foreign customers is crucial for success.
7. Customer support: Brands must provide prompt and effective customer support on marketplaces, responding to inquiries, offering post-sale assistance, and managing any issues or complaints.

We recently conducted a survey on LinkedIn to explore the challenges and opportunities represented by marketplaces.

The survey posed a key question: “Leveraging the opportunity represented by marketplaces. In your opinion, what are the main critical points?“.

78% of the voters indicated “low profit margins” as the primary challenge in seizing the opportunities offered by marketplaces. This response highlighted concerns about internal competition and high fees imposed by the platforms, which can negatively affect the profitability of businesses.

11% of the votes identified “too complex to manage” as another critical aspect, underscoring the operational challenges sellers may encounter while managing their presence on various platforms.

Finally, another 11% of the participants opted for “other“.

In conclusion, the survey has demonstrated that it is essential to proactively understand and address the challenges of selling on marketplaces to maximize the benefits.

Yocabè is committed to providing innovative solutions and successful strategies to help businesses thrive in the dynamic world of multichannel and Direct-to-Consumer (D2C) e-commerce.

If you are looking for a secure, effective, and hassle-free way to expand your online presence, Yocabè is the perfect partner for you!

Our platform allows you to multiply your online sales on marketplaces worldwide with a simple click, thus implementing your business on an international level.

Yocabè will take care of everything: supporting you 360 degrees in marketplace selling with its expertise and technologies.