Wondering If An Online Marketplace Is Right For Your Brand? We've Got You Covered.
Are you considering working with an online marketplace to sell your product? Skeptical about why it sounds too good to be true? Well we dove into some things to consider when deciding on the best online marketplace for your brand.
For starters, what even is an online marketplace?
An online marketplace is a webpage that offers different vendors an opportunity to make the most out of their brands and products by taking advantage of an existing infrastructure and market. The most common examples of this are websites like Ebay and Etsy which both sell a variety of products to different audiences. Such marketplaces allow resellers and hand-made crafters an opportunity to sell to a following that is already at the conversion stage, having already been acquired and engaged by the larger marketplace. By bypassing the initial stages of a sales funnel, it is much easier to sell your product.
These marketplaces are similar to brick-and-mortar stores like Walmart and Target, which both stock products from a variety of brands while taking advantage of existing foot traffic and brand credibility. It ultimately gives startups and other small businesses an opportunity to compete with established brands. These stores - which also take advantage of the wealth of data offered by existing customers - can make intelligent decisions regarding product placement and timing in order to maximize sales and customer satisfaction. All leading to an increase in profit for vendors.
Consumers prefer to shop at one place for their products. Rather than visiting 100 different sites to find the best products and sellers they'd rather shop on one site with a variety of products from brands they know and trust. Secondly, using one app or website to find products is significantly and convincingly more convenient than using a search engine to find the various options for each desired product. The marketplace satisfies convenience and quality of product for its consumers.
Online marketplaces do face their own unique set of challenges. With so many different products it's hard to tell the story of each and every brand - ignoring the one marketing strategy that trumps all; brand loyalty. It is much more difficult for online marketplaces to tell a comprehensive branding story about each of their brands. This is why at Street2Ivy we spend time developing each vendor's collection pages to not just show the product, but to give insight into the entrepreneurs behind those products. This helps build brand loyalty, and invited consumers to grow with your brand.
There are multiple types of marketplaces, ones that market certain types of products, ones that market to certain types of customers, and ones that do both. The respective names for these types of marketplaces are vertical, horizontal, and global. These varieties allow marketplaces to target various customer segments, or dominate certain product markets depending on the industry that works for their product. There are pros and cons to both types. For vertical marketplaces they have chosen a type of product that they know they can market well too, so they focus their efforts on finding the consumers that will buy that product. On the other hand horizontal marketplaces know what type of consumer they want to attract, so they spend their time finding the right vendors and products that they know their consumers would be interested in buying. In both cases they lose the opportunity of the other, but by choosing a single focus they are able to double down on their marketing efforts and enhance the marketplace for vendors and shoppers.
An example of a vertical marketplaces is a site like Ruby Lane or 1stdibs, which both focus on specific types of items. Ruby Lane sells products like antiques, art, vintage collectables, jewelry, dolls, and other products along those lines. Most of its users tend to be women over 40 who are interested in collecting unique items. Similarly, sites like 1stdibs.com sell curated furniture, art, and jewelry to clients with high net worth and interested in culturally prevalent art. Determining if these marketplaces meet your needs depends on whether or not their specific customer segments are interested in the products you offer.
A horizontal marketplace on the other hand is a store like Newegg, which advertises itself as a leading technology retailer. Selling products like electronics, computers and computer parts, entertainment systems, smart home products, and gaming systems it attracts a deal-seeking technological enthusiast crowd. For vendors looking for a technological oriented audience and fulfillment service, along with account supervisors and advisors, Newegg is a useful option.
Finally an example of a global marketplace are sites such as Amazon.com or ebay.com. Both sell all types of products to all types of customers. Their benefit is in their volume, which allows them to be profitable with smaller commissions on each product, and by being established as the main marketplaces, allowing them to easily attract new business and maintain their existing hold on the industry. However it also pushes brands to compete with one another when there are multiple sellers of the same product solely on product quality and price, rather than brand story. Vendors with a small niche market on the other hand compete with Amazon itself and their Basics products, a tough competitor in any sense of the word having the benefit of credibility, price, and infrastructure integration.
Street2Ivy is a marketplace instead focused on supporting their vendors through knowledge, finances, and brand awareness. It sells products at the same cost as its vendors, hoping to help develop the brands working with it. In this way the success of a Street2Ivy vendor directly results in the success of Street2Ivy ensuring that the financial motivations for such a marketplace are the same as the vendor it represents. Street2Ivy believes in a different way of doing business, one that supports the communities and businesses it represents. It believes wealth can be created and supported by all participating parties, rather than just the biggest player.