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BizReport : Ecommerce archives : March 09, 2017

What small retailers need to know before 3rd party selling

Over the past five years, creating a store within the Amazon, Shopify, or Ebay infrastructures has become a popular trend for mom-and-pop type retailers. As more people shop online, this trend is continuing to grow, but no all will be successful. There are three tips to consider prior to launching a store within a store.

by Kristina Knight

First, understand the fee structure

"Fees can take lots of new marketplace sellers by surprise, particularly if they come in waves--for example, eBay insertion fees, followed by eBay final value fees, followed by PayPal fees, and so on. To stay on top of margins and ensure profitability, SMB sellers need to do their homework and understand how much it really costs to sell each unit--otherwise they could end up losing their shirt," said Aron Hsiao, Head of Communiations, Terapeak.

Second, understand the policies of the larger marketplace

"Policies are important because the marketplaces tend to be very strict about them. Independent SMBs may be accustomed to setting their own policies for just about anything, but the marketplaces have clear policies in place already for refunds and exchanges, fulfillment quality and speed, shipping costs, what product listings and images can and can't contain, and so on. Sellers that don't know the policies going in or that don't take them to heart can find themselves banned from marketplaces quickly--and it isn't always easy to return to a marketplace once they've excluded you based on policy violations," said Hsiao.

Third, understand the competition will be fierce

"The level of competition can be intense. On the marketplaces, you're not in your own sandbox--other sellers that sell what you do are offered to shoppers on the very same page. Shoppers can immediately compare prices, policies, and the experiences of past customers and choose who they want to buy from. It's a buyer's market. So it's terribly important to be competitive on price and service, to know what makes you different and communicate this to shoppers somehow, and to make sure that what makes you different from other sellers are all positives, rather than negatives," said Hsiao.

Tags: 3rd party selling, ecommerce, ecommerce trends, marketplace ecommerce, Terapeak

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