Last editedMay 20222 min read
In recent years, particularly in the wake of the Covid-19 pandemic, online channels have started to overtake physical retail outlets in popularity and revenue. Selling online opens up your market substantially to a global marketplace of potential customers, a market that will be made up of over 2.14 billion people by 20241. That’s essentially the entire developed world.
With online sales accounting for around $870 billion in 20212 (an increase of 14.2% from 2020), even the smallest business would be foolish to ignore the online marketplace. But while digital marketplaces are far from a new concept, having been around for as long as the internet itself, they can still prove daunting and overwhelming for new players.
So, if you’re considering making your first tentative steps into the world of e-commerce, here’s a quick guide on how to sell on marketplaces without losing the bones of your business.
Online marketplace basics
Even the largest online marketplaces, such as Amazon and eBay, started life in a garage. The former was little more than a humble bookshop at first before Jeff Bezos discovered the potential of e-commerce when it came to the economy of scale.
Today, Amazon is one of the world’s most recognisable brands and one that sells everything from entertainment and groceries to garden products and musical instruments. But you don’t have to be on Amazon to sell from your own online marketplace or someone else’s.
Selling online for free
If you’re nervous about venturing out into the world of the online marketplace, a logical place to start is an existing platform such as Craigslist. However, there are caps to limit how much you can sell through these platforms. Some, such as eBay, take a substantial cut of your profits.
So, if you mean business, we’d always advise against using these platforms unless you have zero aspirations for growth. Thankfully there are dozens of options available to help you sell on marketplaces that will gladly hold your hands through the entire process.
The difference between a hosted and a self-hosted marketplace is like the difference between renting a house and buying a house. Just as most of us start by renting before progressing to buying, the same is true in the e-commerce world. That’s why you might want to consider starting on a hosted platform.
These are platforms that lay the foundations and set the ground rules but allow you to sell your own products with minimal fuss. This includes online payment system solutions such as Shopify, which offers pre-built front ends from which you can sell your wares. The drawback, however, is that you can’t modify the platform itself, so it’s a solution you’ll want to evolve past once you start to scale.
If a hosted marketplace is a rental property, then a self-hosted marketplace is the first house you lay down a mortgage for. You have the freedom to choose how your online marketplace looks, what it can do and how large it is. You also don’t need to take the training wheels off as there are plenty of platforms, such as WordPress, that allow you to design and build your marketplace with the help of third-party tools.
The scope for customisation and scaling offered by a self-hosted online marketplace is almost limitless, and with enough time and growth, you might get to a point where your marketplace becomes its very own sales platform. However, if you have little experience with coding, it might feel a little like running before you can walk.
Promoting your online marketplace
Setting up your online marketplace is only half the battle. Once you’re online and trading, you’ll want to invest in SEO (search engine optimisation) to help drive customers to your store. Marketing and branding are also significant considerations, but it’s important to have strong foundations before starting an aggressive social media campaign.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.