Ep 5: Will Selling on Marketplaces Help or Hurt My Website Sales?

Tucker Bentley

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May 8, 2020

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Turns Out that Selling on Marketplaces Could Give Your Webstore the Boost It Needs...

The Question

Can selling on marketplaces like Amazon help to grow my webstore? How can I be sure that marketplaces won’t steal sales away from my site? 

The Short Answer

The data overwhelmingly supports the opinion that selling on marketplaces can have a positive impact on your webstore. Seventy-five percent of sellers we studied at least tripled their webstore sales after launching to one or more third-party marketplaces.

(In case you missed it, last week we looked at benchmarks to understand what the road to success looks like on Amazon versus Walmart Marketplace versus eBay.) 

The Long Answer

Our study looked at sellers who were webstore-dependent—that is, only selling through a Shopify, BigCommerce or Magento site—before onboarding to Zentail. These sellers were doing at least $1,000 a month in webstore sales and had been selling for at least three months prior to expanding to a new marketplace. 

Of this group, a whopping 92% saw some type of growth in their webstore sales within the first year of launching a new channel. Twenty-five percent tripled their sales. Fifty percent quadrupled their sales (if not more). 

chart showing how many sellers saw increase in webstore sales after going multichannel

Merchants who saw the greatest uptick in their webstore sales (4x or more) had, on average, a total of four marketplaces after one year. They saw the greatest growth after being on marketplaces for at least six months, and generating a consistent flow of at least 500 monthly orders on those channels. 

The biggest needle-mover was, unsurprisingly, Amazon. It was the first destination for a majority (85%) of our sellers, who sought an audience with its 105 million U.S. Prime members. (eBay was the second most popular channel after Amazon.) 

So, despite the fact that more than 78% of Amazon searches are unbranded today, sellers seem to be benefiting from buyers’ willingness to purchase from a brand they’ve never heard of before. Since marketplaces have already earned the trust of their customers, there’s far less pressure on the brand itself to establish a relationship before landing the first sale.

A good number of buyers seem to be returning to a brand’s webstore after this first purchase to discover similar products and make follow-up purchases. 

Of course, many brands are doing their part to keep this momentum going. Some are enhancing the branding on their listings (via tools like Amazon Enhanced Brand Content), packing slips and merchant-fulfilled packages. Others are actively remarketing customers through ads and/or emails. 

It’s also worth noting that even as brands drive visitors to their site, it’s not uncommon for marketplace sales of those same products to jump up. Buyers regularly require six touchpoints before making a purchase, and the same people who visit your site may be returning to marketplaces to cross-check prices and options. 

Amazon expert, Daniel Tejada, from Straight Up Growth sums it up well: “[Buyers] are going to purchase where they want to purchase…[by] giving yourself the ability to be found on those other marketplaces, it really gives you a chance to take as much market share as possible through product discovery there.”

Watch: Our Full Interview with Daniel on YouTube

Webstores vs. Marketplaces During the COVID-19 Outbreak

Something interesting happened at the beginning of 2020. Amid FBA’s freeze on non-essentials and delays in Prime shipping, several sellers reported a massive spike in their webstore sales.  

“Our website sales are going through the roof,” said Ken McCombs III, vice president of McCombs Supply, which generates multi millions in annual sales across five marketplaces and a webstore. During the first four months of 2020, webstore sales grew 47% YoY and outperformed every other channel in McCombs’ portfolio.

Read More: How One Ecommerce Retailer Is Still Thriving Amid COVID-19

Similarly, another multimillion-dollar Zentail user saw Amazon take a backseat in early 2020. While in normal times, Amazon accounts for more than half of the company’s sales, Amazon came in as the minority sales channel following COVID-19 impacts. The company's Shopify store hit a record high, outperforming Amazon with three to four times more sales. 

chart showing how webstore sales outperformed amazon sales during covid19 pandemic

How to Take a Multichannel Approach to Ecommerce

In summary, today's data suggests that it's very possible for webstores and marketplaces to coexist. Being present on multiple platforms will, in fact, help you from leaving money on the table. 

My parting advice is that you know the strengths of each channel and how to use them to your greatest advantage. If you’re looking to go multichannel for the first time, make sure to:

  • Understand that every channel has its quirks, ranging from various commission rates to listing requirements
  • Be aware of pricing policies that require your products to be sold at the most competitive price (marketplaces will monitor the price of your products on other sites)
  • Study brand control techniques to thwart counterfeiters and other risks 
  • Automate tasks that are prone to human error, like cross-channel inventory management 
  • Automate redundant tasks, like listing, and leverage SMART Types, the only AI-driven solution that can auto-categorize your products to each marketplace
  • Consider advertising to build up momentum on new marketplace listings
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