the best marketplaCes

fOr 2017

A platform where several sellers are brought together to facilitate the display and sales process, in exchange for different rates or commissions, although there are marketplaces that don’t charge any commission or allow some products to be uploaded

onto the catalogue free of charge.

Users can access these ‘electronic markets’ to search through the multi brand catalogue, to search by product type, price, a multitude of keywords, and make quick comparisons.

WHAT IS A marketplaCe

?

Every business must search for their ideal niche

from where products can be offered to the audience that actually searches for them in a

specific way

The great advantage of a marketplace is that the initial investment is less than preparing a website

and to hire all the services, tools and maintenance of

an eCommerce platform.

A marketplace is also a fantastic scenario to practice SEO, to check keywords used by other

sellers in the same niche, which searches are carried

out the most and which ones work better, since

many marketplaces provide metrics that you will

be able to interpret, in order to vary your action and

supply strategy.

There are 5 kinds of marketplaces:

• On demand: They respond to needs of the moment like an Uber style rented car.

• Managed: A third party intervenes in this model to guarantee the smooth running of the marketplace, and to provide support, logistics analysis and maintenance tasks.

• Community-driven: In these marketplaces, there is a dominant feeling of belonging among all the members who share a buying,

selling and manufacturing philosophy, like in the Etsy community. • SAAS: This system offers users a user-friendly tool for building

their own website inside the network of the marketplace.

• Decentralized: There is no operator controlling the situation in them, and they follow a P2P operation: anyone can enter to buy

and sell.

Among other advantages, the marketplace automatically deducts commissions from the total sale for you, without the need to issue subsequent invoices, and they pay between 7 and 15 days after the transaction.

In that sense, you will find yourself with two methods:

• Commission per transaction: Sellers are only charged for each individual sale. It’s the most popular and

most used variant. • Commission by listing: Sellers are charged a fixed rate in the marketplace, which scares away many

who think that it’s unfair to charge all sellers the same, regardless of whether they sell a little or a lot.

Other marketplaces also charge buyers a subscription to check their catalogue, and charge sellers advertising commissions.

Also remember that from the moment you want your business to combine its catalogue in various channels at the same time, product information management software will be essential,

such as a PIM system that guarantees all your catalogue information to be homogeneous among your operations centre, your online shop and any marketplace you choose.

the best marketplaCes fOr 2017

The subscription boxes are a current trend which are taken advantage by companies that also

offer a conventional catalogue, and initiatives that base their sales on

selling periodical subscriptions, which are usually each month. Crates of fresh foods, books with

surprising titles, collectors objects from pop culture… The imagination

(and the real demand) is the limit. Cratejoy facilitates this process, and has a 10% commission on each sale.

Up and running since 2002, the

iOffer business model is based on the possibility of haggling between buyers and sellers. It’s

free to show products, but they charge a minimum commission

per sale and some standardized rates if you want your products to appear highlighted on the main

page or in sections of categories.

A French proposal on handmade products which covers a wide range:

clothes, furniture, accessories, stationery, accessories, art, jewellery and costume

jewellery. Their commission margin is low at 5%, but they charge a fixed rate of €0.50 for sales under €10.

Specifically for women’s, men’s and children’s second hand luxury clothing, although they charge a high sales

commission (15%).

Another variant of the P2P applied to the strong fashion sector, which is

based on evaluating the quality of products and to buy them from the sellers. Then the marketplace puts

another price on the products and sells them to users. Through this system,

sellers are spared the sales process, but they will receive much less of a pay-out: usually between 5% and 40% of the

value for standard products, whereas luxury items can offer sellers up to 80%

of the final price, since they are more sought-after.

The alternative to the sale of men’s second hand luxury clothing, which is the same as Farfetch. The attraction of these proposals is

based on very well designed platforms that do away with the

old prejudice of buying used, worn out, or roughly treated materials in small shops or flea markets. They

charge a 6% sales commission, and another commission of 2.9% for

PayPal.

If your business is based on

heavy equipment, this platform brings together multiple options to rent

construction materials, such as cranes, vehicles, diggers or

steamrollers, and guarantees users to compare rates and to get the best ones. They carry

out marketing in name of the brands, they include an

insurance policy and charge a percentage for each rental.

This company brings together domestic chores, reparations, personal, physical, mental or lifestyle training, and educational lessons. Their system is based on compiling a report on the customer’s needs, before showing it to

the seller, who will then prepare a quote. Their commission system is a

little more complex, which is based on credits obtained by the seller.  Taskrabbit presents a similar operation

applied to services in the neighbourhood, while Udemy and

Skillshare stand out in the marketplaces focused on educational lessons.

Although practically every

supermarket chain already offers online sales and home delivery, there are those that

stand out among the food marketplaces like Instacart,

which searches for products in local shops. However, their profit margin is obtained by

increasing the price on the seller’s base product, which

is sometimes up to 30%.

Allows searches of local florists including a multitude of variables by type of flower or gift, and assures that the photographs of each seller are 100% original. They charge 10% on sales, excluding taxes.

An extensive sales catalogue of

gift cards from different shops, although the company

also offers the curious alternative that users can sell cards they have received and

don’t want to use. They charge a sales commission of 12% and

a rate of 1% for each product listed in the marketplace.

Following the trend of local promotion, this young marketplace lets you discover products in a city, and in a way that is ideal for small shops or artisans with a

physical shop, although it also includes wholesalers’ warehouses. Citify charge a sales commission of 5%, and Scott’s Marketplace is their direct competition with rates at 4.99%. The same idea but

with experiences and activities is offered by Headout, AirBnB for accommodation, Storefront for short-term space rentals,

Dogvacay for pet sitters, and StyleSeat for hairdressers and beauty sessions.

Especially orientated towards sales made through mobile phones for a

wide range of products. They charge a 10% commission, 3.4% for payments

made through PayPal, and 2.5% for transactions processed through depop itself, including credit cards

and Apple Pay.

In this mixed case of selling fashion, furniture and accessories, it’s possible

to save the expense of commissions, as they charge 10% if the purchase is

made through the marketplace, but they don’t charge anything if the user is redirected from the marketplace to

the online shop and the purchase is made there. It’s interesting to

combine both vias and to check which works better. eCrater is similar but more expensive (with commissions of

up to 30%).

As not all e-commerce is

destined for B2C, there is also a marketplace for B2B, like this

one orientated to equipment and materials. It particularly protects small businesses, that

mustn’t pay any rate or commission for hiring services,

but they charge suppliers through a monthly subscription and some fees per transaction.

Focused on the sale of electronic products, Newegg it’s a giant that

receives less publicity than other marketplaces, even though their number of visits is enormous. The

commissions vary between 8% and 14% according to the type of

products,  but the registration process isn’t direct, and each seller must pass a quality control before receiving an

approval to sell on Newegg. In this category of electronics, Shopclues is

also included, but their commissions are identical or a little more expensive, and up to 17% according to

the category of the product.

As its name suggests, it’s the great

online bazaar without commissions that works as a gigantic network to put sellers

directly in contact with interested buyers. The reason for the omission

of rates is that there is no parent company or business behind it to control the process. Their payment

system is Bitcoin, which is prohibited in some countries.

One of the most well known platforms is based on a membership. That way users

have access to the catalogue, and more competitive prices

than in other marketplaces, in exchange for an annual fee. Only brand products are included

and the company has established a fairly high level of

commission of 15% on the majority of products.

Focused on artisans, independent sellers and artists, but only produces

results if the brand has already built an audience, since it’s difficult to

stand out in the marketplace. They charge a monthly rate and their commissions on sales through PayPal

or Stripe are 2.9%.

The great American commercial chain

opens its catalogue to third parties in exchange for a monthly rate of

$39.99, but it’s susceptible to increase if the sales made by the member don’t exceed $400 per month. They also

include commissions for products and for the sales and delivery process.

In response to the transactions made by individuals who have been selling for years from

private profiles, the largest social network in the world is added to the

world of marketplaces with a system of classified advertisements to facilitate sales in local areas. Given

that the transactions are carried out among those involved, and that the

objective of Facebook is to make profits through advertising, they don’t charge commissions or rates on

transactions.

The large marketplace for handmade products (although some sellers don’t fulfil

this starting point and sell vintage products). Their rate list is extensive: $0.20

for each product listed, 3.5% on the price of each transaction, 2.5% for foreign currency conversion, and variable VAT, payment

system and advertising fees. There are alternatives like Zibbet, which doesn’t

charge commission and allows up to 10 products to be uploaded free of charge (a good idea for starting and testing), and

there’s Bonanza, Shopandmade, Folksy in the United Kingdom,

Custommade, DaWanda or Shapeways where products are only created using 3D printers.

The great introducer of the classic buying and selling system via bidding, although they also include fixed price sales. Their volume of visits

is gigantic but their system is complex and includes commissions on sales, as

well as rates to list products. Catawiki is a similar option.

India main marketplace, which has experienced rapid

growth over recent years. The commissions vary according

to the kind of product and reach up to 15% of the total, on top of which shipping fees

are added, a fixed rate and 15% tax. Sellers with the best

results are favoured and paid earlier.

The giant Japanese company based on high levels of competitiveness

among sellers is essential for entering this market. However, their commissions are high and up to 15%,

according to the type of product, the sale price, as well as the shipping and

processing fees, plus a standard fee of $0.99 per product sold.

The Asian market equivalent, which

contains other massive marketplaces like AliExpress and 1688. Their main

trump card is that they don’t charge any hidden commissions or rates, but obtain profits from commissions in

other marketplaces within their group, marketing fees, their payment system

Alipay, and from the memberships.

The chinese versions of eBay and Amazon, controlled by Alibaba.

Possibly the most famous marketplace in the world, and the

largest in many countries. Going against their popularity, suspicious

company policies have been discovered, there is a difficulty to appear highlighted among thousands

of products in the same category, and they charge a high percentage of sales

(between 10% to 25%).