With the economy remaining stubbornly flat, many online retailers are embracing other online channels in order to drive growth. One fast and cost-effective way to diversify your sales channels is by embracing online marketplaces, such as eBay or Amazon. With a huge existing customer base and great reputation, these online giants are the logical place for retailers to start selling.
However, both eBay and Amazon have their own rules and norms and it is vital that retailers understand these if they are to make each marketplace a profitable channel. Here, we examine some of the most important things for retailers to consider when selling on both eBay and Amazon.
eBay: Five things to think about
eBay embraces brands. With more than 17 million unique visitors per month (Nielsen Netview March 2012) to eBay UK and 60 million live listings on the UK site (eBay internal data (Daily Live Listing Count)), eBay offers a huge potential market for retailers. Historically however, eBay’s auction-style listings were less attractive to big brands. EBay has recently lowered its listing fees and moved toward a fixed-price marketplace, which makes it a far more viable marketplace for more established retailers. Furthermore, eBay’s decision to reorganise its fee structure to focus heavily on a fixed-price format gives retailers a low-risk opportunity to list their full catalogue and only pay a commission to eBay when a sale is complete.
It’s all about the inventory. EBay is working hard to encourage large retailers to push their full catalogue to the marketplace. Again, with upfront fees at a lower cost it’s in the best interest of the retailer to list all available products. Managing thousands of products across eBay and other channels can be challenging but the more of your inventory you are able to list on eBay, the larger your potential returns. Effective inventory management is therefore vital, particularly if you are operating in multiple sales channels.
Focus on fulfilment. As with any marketplace, there is a need to incorporate eBay orders into an existing order-fulfilment process. Of course, managing orders and shipping products to buyers in an efficient and timely manner is important to the success of any online programme but with eBay it really is vital. EBay shoppers place a high value on seller ratings and, with your competitors just a click away, it is crucial that you are able to deliver as promised.
Owning your brand. Unlike some other channels, eBay does offer retailers the chance to recreate much of their brand within their own seller account. With many eBay shoppers wary of fake branded goods or sellers, this is a real advantage for retailers. Posting your own branded, authorised listings on eBay gives you greater control over your brand and helps to boost sales.
Look for daily deals. If you have the luxury of having a deep inventory in certain products (combined with a good price for that product), you could be part of eBay’s Daily Deal programme. The Daily Deal is highlighted on eBay’s homepage and can move large amounts of product, resulting in significant spikes in revenue. Definitely one to consider!
Amazon: Five things to think about
Amazon owns the experience. Amazon takes great pride in managing the entire shopping experience for its buyers. The company has designed a channel and experience that shoppers know and return to time and time again. The company is understandably very protective of this customer experience and, if it feels that marketplace sellers are not delivering the level of service that Amazon expects, they will terminate that account. If you are going to sell on Amazon, you therefore need to respect these simple rules.
Shoppers must stay on site. A fundamental part of the Amazon experience is that customers should not be directed away from the site. For marketplace sellers, this means that any sales transactions, advertising or other means of communication with Amazon shoppers that would direct them off Amazon are strictly prohibited. Even having a link to your webstore on a product listing or description field can be viewed as grounds for being dropped from Amazon.
Keep costs transparent. It’s always best practice to have clear shipping prices but, with Amazon, they really are essential. If Amazon thinks a retailer has misled shoppers into purchasing an item and then tacked on extra fees, including excessive shipping rates after the checkout process has been completed, they will in all likelihood terminate that seller’s account.
What’s in a name? Your Amazon “business name” is your seller ID – it must accurately reflect your business and cannot infringe on another company’s trademark or other intellectual property. Furthermore, it cannot contain .com, .net, .biz or other such suffixes to discourage sellers from tempting users away from Amazon and on to their own URL.
Respect the reviews. You are welcome to solicit feedback from buyers to help your seller history; in fact, this is pretty vital. However, you must allow the buyers to freely express their opinions. Any attempt to manipulate ratings and reviews for your products will result in a loss of selling privileges.
These rules might seem harsh or restrictive but the fact is that Amazon has worked hard to create a winning formula that its customers love. And, with third party sellers now accounting for 39% of Amazon’s total sales (WSJ), it is only sensible that the company should look to protect its customer experience.
With any marketplace, the important thing is to take into account the individual requirements of each channel. The retailers that thrive on eBay and Amazon will be those that can best adapt their approach so make sure you do your research and create a tailored offering for each marketplace.
Contributor
Julia Priddle is Head of Account Management, EMEA at ChannelAdvisor. Since joining ChannelAdvisor in 2006, Julia has overseen the management of key corporate and SME accounts using multichannel and digital marketing strategies.
