Marketplaces ChannelAdvisor By ChannelAdvisor

The Marketplace Effect

The Amazon Effect is a well-known phenomenon. The ongoing disruption of the retail market and boom of the e-commerce industry is still being felt, and is evolving with Amazon’s expansion. Yet marketplaces themselves are still changing leading to another shift felt by both retailers and consumers: the Marketplace Effect.

Consumer spending habits have changed. Smartphones and super-fast mobile networks, combined with competitive pricing, limitless choices and more shipping options have shaped consumer expectations and kept retailers on their toes. But what’s often overlooked is the way marketplaces now shape retail business models.

Online marketplaces allow consumers to search for almost anything in one place. The reverse of this is that merchants are able to sell their products to almost anyone, anywhere in the world, at any time, in any volume. A small start-up can become a potential powerhouse. A small business currently selling a small number of products locally can become a global force selling multiple SKUs across multiple continents.

With marketplaces, prior hurdles such as limited capital or supply chain logistics no longer hold back a company from scaling. Marketplace platforms can take care of the costs and other factors that online retailers normally have to deal with. A well-functioning e-commerce platform? Secure payment? Analytics? SEO? Marketing? Sales reporting? Product categorisation? Marketplaces carry the burden of all these elements. Even warehousing and logistics can be carried out by third-party marketplaces. This gives retailers the opportunity to expand their product range, trialling new or adjacent categories without the need to invest in warehousing or the need to carry limitless stock that may or may not sell.

Retailers have already reaped the rewards of eBay. Catch has now entered the market and has yielded excellent results for consumers and retailers alike. With Amazon’s expansion to Australia, it’s an exciting time to be a part of this new wave of e-commerce.

For more information about marketplaces and how you can leverage your business, download ChannelAdvisor’s Essential Checklist for Selling on Online Marketplaces.