What small retailers need to know before 3rd party selling

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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.

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ABOUT THE AUTHOR

Kristina Knight-1
Kristina Knight, Journalist , BA
Content Writer & Editor
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Kristina Knight is a freelance writer with more than 15 years of experience writing on varied topics. Kristina’s focus for the past 10 years has been the small business, online marketing, and banking sectors, however, she keeps things interesting by writing about her experiences as an adoptive mom, parenting, and education issues. Kristina’s work has appeared with BizReport.com, NBC News, Soaps.com, DisasterNewsNetwork, and many more publications.