What is an Online Marketplace?
Before we hop right into who should be utilizing Online Marketplaces, let’s run through a quick refresher on what exactly an Online Marketplace is.
“Simply put, an online marketplace is an e-commerce site that connects sellers with buyers. Traditionally in these electronic marketplaces, transactions are managed by the website owner.
Companies use online marketplaces to expand their customer base and offer their products to buyers all over the world.
Online marketplaces have been evolving and thriving since 1995 (the birth year of eBay and Craigslist.) When eBay first launched, it quickly became a place that brought sellers and buyers together in an auction-style setup. Today, you can find countless online marketplaces of every style and size.
Most people have come to understand online marketplaces as enormous entities like Amazon, Walmart, and Alibaba -that stock anything and everything, regardless of quality.”
But in recent years, the idea of an Online Marketplace has developed and expanded –making room for new strategic applications. These strategies can now be applied to businesses of every size and industry, by creating a Lifestyle Marketplace centered around your pre-existing products. You have the customers, and you know what they want. Why leave it to the “big guys”, when you could sell it yourself?
Who Should Create an Online Marketplace?
Now that we have a comprehensive understanding of what qualifies as an Online Marketplace, we have to consider WHO can actually benefit from creating one.
Like we touched on a bit earlier, the idea of an online marketplace has graduated and evolved from its “big entity” roots. This graduation has left open doors for DTC brands of all sizes to expand their own stores into functioning Online Marketplaces. But who should be doing it?
The short answer? -Any real brand who makes at least one excellent product. You know your customer base, and you know what else they may want/need when they purchase something from your store. Now imagine if you could be the one who sells those things to them. You may sell top-tier hammocks, but do you sell carabiners and tents? What about sleeping bags? Hiking shoes?
It’s important to understand that when someone makes a purchase from you, they more-than-likely will need to purchase something additional in order to use it. It’s easy to see the value in a cycle of sales perpetuating new sales, but it’s crucial that your business is able to capitalize -and retain those new sales for itself.
Why Some Good Brands Don’t Make the Jump…
There’s one glaringly obvious hurdle quality DTC brands face when constructing Online Marketplaces, and that’s finding additional products that emulate the quality and ethos of their own. Until recent years, product fulfillment for OMs has been captained by less than trustworthy wholesale manufacturers.
“Wholesaling is the act of buying goods in bulk from a manufacturer at a discounted price and selling to a retailer for a higher price, for them to repackage and in turn resell in smaller quantities at an even higher price to consumers.
The main problem with that? Traditional wholesaling relationships are littered with inventory management obligations and upfront purchasing.”
Online Marketplaces remove those upfront costs and management responsibilities.
But they also remove the risk of doing business/supplying products from less-than-exceptional sources. Instead, you can connect directly with other top-quality brands who are already looking to sell their products in new marketplaces. This way, you can source innovative products to upsell or cross-sell on your own site, from brands who share your same love for what you do!
Not only does this allow you to build out extensive collections of quality add-ons for your customer, it gives you the opportunity to sell your own products in other top-tier brands stores as well. Just think of it as “friends with benefits”, ecommerce-style.
Someone out there is already making all of the auxiliary products your store needs, and they’re doing it to your standards. All you need to do to evolve into a Lifestyle Marketplace, is find them.
Carro’s Brand Partnerships connects top-tier brands looking to cross-sell each other’s products on Shopify.
Making Your Online Marketplace a “Lifestyle”
As a smaller business, it’s always important to consider how you can build a “lifestyle” around the use of your products or services. Make sure you’re telling your brand story honestly and openly.
Let people know what you and your team are all about! What do you support? Why do you do what you do? What environmental causes are you passionate about? Identifying and communicating these things will not only help you target and identify your customer base, it’ll align you with like-minded brands (and the chance to build strategic cross-selling relationships with them).
Like we touched on earlier, you know what your customers love best. In fact, you’ve played an important role in helping them determine what they love. So why not be the one to sell it to them? With top-tier products at your fingertips, you can command your buyer’s journey from start to finish.