Have you heard about online marketplaces and wondered whether the hype is commensurate with reality? The buzz surrounding the sector has been hard to miss these last few years, and it's easy to see why.
Online marketplaces now account for half of all eCommerce sales globally, with established behemoths like Amazon sharing the category with a host of smaller players, including homegrown success stories like Kogan and MyDeal.
Businesses that establish their own online marketplace stand to achieve a 30 to 50 per cent increase in turnover in the first year.
They do so without having to risk the capital traditionally associated with an expansion gambit on that scale because the additional lines they can offer on their sites are owned, stored and handled by third-party sellers who assume the costs on their behalf. Indeed, this is a two-way exchange of value as, in return, sellers gain access to a highly engaged and often incremental consumer base without the acquisition cost associated with marketing.
That's a compelling value proposition in anyone's book and part of the reason online marketplace platforms now comprise one of today's hottest technology categories, according to a 2021 report from high tech research house Forrester.
Come for the products, stay for the experience
But augmenting your usual range with an array of complementary products from third-party sellers doesn't just mean the opportunity to supercharge sales and branch into additional categories, or own those where you currently play.
If you're prepared to invest resources in relevant marketing collateral and human resources – think helpful articles, how-to guides, blog and vlog posts and moderated forums where your customers can share feedback and experiences – you may be able to transform your site into the hub of a customer community. Somewhere potential shoppers in your target market come to view as a destination in its own right.
Local bicycle parts and accessories importer BikeSportz provides a primer for other marketplace owners to follow. Its online marketplace does much more than sell frames, wheels, tools and a plethora of other cycling paraphernalia.
With a blog covering a wealth of topics, from helmet size guides to on-the-road reports from Tour de France competitors, an advice line and a well-curated social media presence, it's become a one-stop-shop for anything and everything bicycle related.
Make your sales much stickier
Yes, it can be a lot of work. But investing the resources to create a customer community that dispenses trusted guidance and advice and stocks and ships every conceivable product in your category is a great way to raise your brand's profile and keep customers coming back, again and again.
Those ongoing interactions generally translate into more frequent, 'stickier' sales, particularly if you stock the virtual shelves with repeat purchase items that regularly find their way onto the family shopping list.
That's a boon for any business, particularly one whose customers might otherwise make large one-off buys then drop off the radar until the next purchasing occasion rolls around.
Joining the marketplace gold rush
In the wake of the COVID-19 crisis, consumers spend more time and money than ever researching their options and purchasing online, as our collective bill for last year attests. Australians dropped more than $52.24 billion on online shopping in the 12 months to October 2021, according to the NAB Online Retail Sales Index: October 2021.
Against that backdrop, an investment in time and resources to create an online marketplace that's a go-to destination for browsers and buyers in your bracket is likely to pay you back in spades.