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4 Digital Marketplaces Becoming a Viable Small Business Channel

Marketplaces have been with us for centuries. Around the time people started trading inside and outside of their village two models developed.

marketplace

photo credit: Bert Kaufmann via photopin cc

You either took your stuff on the road and sold it door to door or you showed up somewhere near the center of town and rented a stall in the market or bazaar.

Even today’s shopping center is based on the marketplace concept – lots of people go to one place where they can go to lots of stores at one time.

You could make a case for the fact that the Internet in general is little more than a really, really big marketplace – containing everything that has ever been made along with everything that’s ever been said.

Unfiltered as it is though, the Internet is a bit like going down to market and finding that if you walk through the stalls for about fifteen years you wouldn’t even make a dent in what’s there.

eBay was one of the first to crack the marketplace code online. eBay aggregated buyers and sellers of stuff, mostly stuff in the attic and garage, and took a fee on the sale.

In recent years others have entered the digital marketplace business and the model, including eBay’s model, has evolved to the point where it represents a significant distribution channel for businesses large and small, B2B and B2C and is no longer limited to physical products.

Today sellers can find viable marketplace distribution in places like Amazon, Buy.com, Newegg, Ariba as well as eBay. Even traditional retailers like Sears and BestBuy are getting into the marketplace game. And, it’s pretty obvious that Facebook has plans to fall into this category as well.

Marketplaces are not limited to sellers either. Marketplaces like Alibaba are making it easier than ever for business to find and source suppliers and manufactures of products from around the globe.

As small businesses consider digital marketplaces for additional distribution, they must weigh the advantages and disadvantages, learn best practices and specifications and tricks of the trade in order to stand out.

Advantages of digital marketplaces

  • Pre-built market – some marketplaces have millions of customers visiting on a daily basis.
  • Shoppers with intent – people often come to a marketplace ready to buy something if not a very specific item.
  • Convenience – Shoppers love the convenience and one stop shopping approach with one login.
  • Niche markets – Some marketplaces build communities interested in very specific types of items.
  • Fulfillment – Marketplaces can become a fulfillment center. Amazon’s Fulfillment by Amazon program is a huge boost for some companies.
  • Credibility – Smaller, lesser known brands can benefit from the trust built by a marketplace.

Disadvantages of digital marketplaces

  • Competitive proximity – Sure there are lots of shoppers, but your competitor might be in the next stall, so to speak, offering a lower price or better options.
  • Commoditization – Some marketplace shoppers are simply looking for the best price on a comparable product.
  • Loss of brand – What makes someone want to do business with you based on an awesome experience can be lost in the matching specs of a marketplace.
  • Listing idiosyncrasies – Every marketplace has it’s own way of getting your stuff listed, priced and highlighted.
  • Order management – Some small businesses don’t have the IT infrastructure to handle order management systems required to play at a high level.
  • Hard to stand out – Winning the digital marketplace game takes a lot of work – uploading your products via a data feed and calling it a day is not going to cut it.

Best practices

If you decide to test a marketplace there are a handful of musts in order to make a go of it.

  • Start slow and build – Unless you’ve got a full time IT staff it’s best to pick a marketplace and try to build your chops one at a time rather than jumping in and distributing your resources in ways that will dilute your time and attention.
  • Go for Gold seller status – Every marketplace has some algorithm that rewards the best sellers. Some of this is sheer volume, but things like ratings and response times play a huge role. Gold status usually affords better placement. (Yet another argument for starting slow and working out the kinks)
  • Need for speed – One of the quickest ways to rise and fall in the ratings game is quickness. Get your products in the customer’s hands as fast as possible.
  • Provide tracking (Holidays!) – Provide lots of communication. Let people know if they can get something by a looming Holiday date. Exceed expectations.
  • Grow with automation – Once you hit any level of volume in one or more markets you’ll need to find and employ tools that help you list, track, manage and reprice your listings based on the real-time activity going in a market. Some suppliers move the price of items up and down multiple times during a day making it tough to stay on top with a spreadsheet as your only tool.

Digital marketplaces can open up a world of opportunities or they can become a fast way to discount your products. The key is to establish your distribution in other places, refine your processes and then look for additional opportunities in the growing world of online maketplaces.

6 Social Networks Will Become Marketplaces

For the last few years I’ve been promoting the idea that social networks are like outposts, in many respects, best suited to point the way to your hub or main content site.

Product for sale on Shoply.com

While I still believe this to be a fundamentally sound way to view social media use, I see a future that contains a shift in this thinking as well.

As the level of social behavior continues to evolve and social networks grow more important in the lives of their users, they will become much more than outposts – they will move increasingly towards self-containment and wholly functioning marketplaces.

There is a growing mass that simply sees the Internet as Facebook and Facebook is really okay with that. Other marketplaces such as Amazon, Etsy, Buy.com and eBay are moving to socialize your product search and sort and become decision engines. These online destination are making moves to merge this behavior with pop up offline presence as well.

As mobile users depend upon apps like Siri (personal assistant on iPhone 4S) and Yelp and gain access to large amounts of research via QR readers, search engines will play a diminishing role in how buying decisions are made.

Buy.com just launched a feature that allows you to connect and shop collaboratively with friends making social shopping a real-time phenomenon. Paypal just released an app called Send Money that makes sending money to friends on Facebook a snap. As trust in doing business on these platforms merges with increasing levels of content and engagement, expect people to do more and more in these marketplaces.

What this behavior signals for small business marketers is the need to begin to view some outposts as destinations. In other words, it’s time to start looking at building a store on Facebook, Shoply, Amazon, Buy.com, Etsy and eBay.

I know many business sell in these places already, either as a primary distribution channel or as a supplement to their own online or offline store, but it may be wise for all businesses, regardless of what they sell, to set up shop in one or more of these destinations.

You may not see an immediate profit from your eCommerce enabled Facebook store, but it’s time to make that an option and start teaching those that interact with you there how and why they might also want to buy from you there.

The key, as it has been so clearly for the last few years, is to also up your engagement, education and participation in these markets rather than simply look at them as transaction enablers. These are growing major cities and you need to claim and grow your holdings there before it becomes overcrowded.

Facebook ecommerce solutions

Marketplaces

79 How to Deliver an Experience

For a lot of businesses, taking the order is where marketing ends. For smart marketers, it’s the starting point for the next order and the referral. If you stop your marketing thinking at the transaction, you’ll find it harder and harder to build real marketing momentum.

How you conduct the transaction is marketing, how you deliver or present the product or service is marketing, how you continue to educate and make additional offers is marketing, and how you stay in touch to measure results is marketing.

I’ve done some work with eBay and Etsy sellers and those businesses are great examples of how a company can either struggle or thrive based on how well they see purchases as customers rather than transactions.

The series of photos below represent what I believe is a great example of how to deliver an experience with your product. I’ll add my thoughts to the process of steps that make this a nice case study. This comes from Etsy seller Katie Blair Designs.

Plain padded envelope, but with special hand drawn doodles - this isn't an Amazon package - it's just what I would expect from my hand made purchase

The full contents of the package - wow, very nice looking presentation and look, a business card. Not that innovative, but strangely rare.

And what's this? A free sample of another product - now I want to buy some of those note cards

On the back of the business card Katie has hand written a special offer for my next purchase - I'm feeling pretty good about this and I haven't even opened the actual product

On to the purchase - I bought this for myself, but it's like getting a gift. Note the added branding with the sticker.

The product revealed and note the subtle band of branding on the actual product - how will I ever forget Katie Blair Designs now.

The actual product, found online, is what attracted me, but it was the overall experience that has me referring this business and wanting to buy more because I have a lot of, hmm, brilliant ideas

3 Consider eBay as a Small Business Sales Channel

Marketing podcast with Lin Shearer (Click to play or right click and “Save As” to download – Subscribe now via iTunes

I spent a significant amount of time with eBay sellers this year as I participated in a four city event called eBay OnLocation. One of the things that became abundantly clear during my interaction with eBay sellers is that the myth that eBay is just a bunch of folks selling stuff out of their attic is just that – a myth.

ebay prostoresWhile there certainly are people that look to eBay for selling the odd treasure, the focus of eBay of late has been on equipping the professional seller – including businesses that are turning to eBay as a new sales channel for their products and services.

One of the nicest services that eBay offers its sellers, that is also available to anyone wanting to start an ecommerce store, is ProStores.

For this episode of the Duct Tape Marketing Podcast I interviewed Lin Shearer – Senior Marketing Manager of eBay ProStores.

ProStores is pretty much a turn-key store, with real time payments and tons of interactive functionality with the push of a button. Obviously, eBay data and product feeds integrate easily but, so does any product data or Excel file.

If you’re looking for an easy way to add ecommerce or looking for a way to get started with eBay as a sales channel, ProStores might be one of the best

10 eBay and Hearst 30 Days of Green

eBay and Hearst, the magazine publisher, have teamed up to create a the 30 Days of Green Challenge to coincide with Earth Day 2010.

ebay green teamThe Challenge asks participants to consider a variety of ways to act in ways that are friendlier to the environment. The associated web site offers tips and advice as well an opportunity to win $10,000 and a host of other prizes throughout the campaign.

Disclosure: I am a presenter for the eBay: On Location series and witnessed first hand some of eBay’s commitment to environmentally friendly practices first hand.