8 reasons why marketplaces are great for your brand

8 reasons why marketplaces are great for your brand

Marketplaces are popular with consumers because they offer an increasingly broad and rich product offering, where availability is often greater than on an average retailers website. In some instances, customers view marketplaces as product search engines in their own right.

However, marketplaces also offer huge value to brands. These benefits span new product development and customer acquisition opportunities, through to better payment terms and, most importantly, better margins.

Here we list the top 8 benefits to brands:

1. A new channel for customer acquisition:

With marketplaces topping the most visited websites in retail, brands can introduce their products to new audiences, at home and abroad.

2. Improved payment terms:

Selling through marketplaces can provide immediate and consistent revenues rather than up to 60-90 day payment terms associated with wholesale.

3. Increased margins:

Selling through marketplaces, where the average commission rate is 15%, is significantly lower than a typical trade discount of around 40 - 65% off RRP (depending on the retail vertical/category).

4. Easy access to global markets:

Marketplaces provide a lower risk approach to entering new markets. You can test products on global audiences without the need for upfront investment into marketing your own site. The only caveat being you will still need a clear plan behind the logistics and customer service aspects to service these new audiences.   

5. Better brand management:

Brands with a dominant wholesale focus are often already listed on marketplaces via their stockists. Moving into this channel provides brands with the opportunity to decide on their stock width, depth, pricing, imagery and tone of voice to officially ‘own this space’ without compromising their messaging.

6. Exclusive product opportunities:

Through the analysis of sales data, brands can often identify product opportunities, such as reviewing pricing of existing products or developing new products to attract a new set of customers.

7. Off-site discounting:

Many retailers have stock to clear but sometimes want this experience to sit off-site. A road commonly travelled is the release of product to one of the private sales platforms, at often a significant margin impact. Marketplaces can also lend themselves to this model and with minimal brand impact.

8. Target new product areas:

You can now use niche marketplaces to help focus growth in key categories, such as accessories, footwear, jewellery or ethical products. This focused approach can work well to increase brand recognition in new range extensions or non-core product. It can also help cement a brand’s credibility in their core range.

To find out more about the marketplace opportunity, download our free eBook: