Pros and Cons of Selling on Marketplaces

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Benefits of working with marketplaces:

High "passability" of buyers . Large platforms have a fairly serious flow of potential customers. And the more popular the marketplace, the more unique visitors it has. It is impossible for small and medium businesses to attract such traffic on their own.

Working with a marketplace, you don’t have saudi arabia mobile number digits to create your own website, which requires considerable investment at all stages of work (creation, promotion, hosting payment) . For those who are just starting their business, this is a great opportunity to save money. Having signed an agreement with the platform and posted the goods on the website (and if necessary, shipped to the warehouse), you can start trading right away.

Increasing sales through marketplaces is possible thanks to serious marketing, popularity and general awareness of the sites . Sellers do not need to think about advertising the store and invest their own finances in it.

Wide technical capabilities . Such serious projects as marketplaces are serviced by huge teams of professionals.

Wide geography of target audience . Thanks to the global system of logistics, warehouses and pick-up points in many cities, marketplaces give companies the opportunity to work with buyers from different parts of the country/world.

Fulfilment . The supplier signs a contract with the platform, transferring the goods and all powers to sell them. All that remains for him is to receive money for the sold product.

Pros and Cons of Selling on Marketplaces

Negative aspects of working with sites.

Dependence on the platform . Of course, marketplaces do not operate on altruistic principles. Each platform has its own terms of cooperation, which the supplier is obliged to comply with. They may include mandatory promotions, price reductions on selected products, launching a loyalty program, etc. Violation of these terms may entail penalties for the seller. There are commissions for additional services, and most marketplaces operate on a deferred payment system. A seller who, after some time, decides to work independently automatically loses a large percentage of customers shopping on marketplaces.

High competition within the marketplace . Today, there are a large number of sellers working on the platforms. The same product can be offered by different stores, and it is quite difficult to advance in particularly popular niches.

Dependence on ratings . Ranking systems that exist on all platforms force sellers to constantly monitor their ratings, motivate buyers to leave reviews and rate them.

Lack of opportunity to develop your own brand and build long-term relationships with customers . For consumers, the seller is usually the marketplace, not a specific store, even if its name appears somewhere.

Not every product can be sold on marketplaces . For example, it is simply unprofitable to sell very cheap items on these platforms. It also happens that a product, due to its specificity, will not find its buyer there.

Some goods and services can only be sold if they have licenses and certificates .

Return of illiquid goods . This often happens on Wildberries. The platform is not interested in storing the remains of goods that are difficult to sell, and they are returned to the seller.