After launching a section for handmade products in the US last year, Amazon is now rolling out its Handmade portal in all five Amazon European marketplaces (Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.it and Amazon.es). Soon customers can buy and sell handmade products online, similar to websites as Etsy and German marketplace DaWanda.
Whenever you ask someone what comes up in his mind on hearing the word ‘ecommerce’, there’s a big chance he’ll come up with eBay or Amazon. And can you blame him? These marketplaces are amongst the biggest and most successful ecommerce players in the world. Marketplaces are very popular among consumers as they often offer a very wide range of merchandise, all on one site.
The impact of marketplaces
An online marketplace is a platform on which multiple retailers sell (part of) their assortment. There are literally thousands of online marketplaces around the world and these players gain more and more market share. The result is a changed ecommerce industry: online sales happen increasingly from these marketplaces instead from retailers’ ecommerce websites.
The reason behind this shift is clear: consumers can find almost everything they are looking for and for retailers an online marketplace offers them lots of opportunities. Because why would you restrict your market to your neighboring countries, while you can sell just as easily to consumers in Vietnam, Greenland or Brazil using a marketplace connection. Yet, marketplaces don’t offer significant added value by definition. If you’re operating in a very specific niche industry, chances are (potential) consumers could have already been able to find their way to your products.
Why are marketplaces so popular?
The fact online marketplaces have become so popular is partly due to their urge for innovation. Amazon for example is clearly not focusing on profits, but on growing through innovation. The company is continuously investing in the latest technologies and developments, while keeping the future in mind. For an average retailer these kinds of investments aren’t financially feasible. But by joining such platforms, these same retailers can profit from the existing innovations.
Another reason is retailers just don’t want to miss the boat. As soon as a marketplace is popular among consumers and competing retailers, retailers are afraid they are missing out. And there should be a good reason why these consumers and competitors are on that platform, right? So, as a result, more and more retailers will join, which makes the platform even more interesting for other players.
Additionally, the fact retailers can also use online marketplaces to try out quite easily whether there’s enough interest for their product is another popular reason to join such a platform.
What are the down sides?
While joining a big and popular marketplace could lead to an increase of your reach and online visibility, it doesn’t necessarily mean you get rich of it. There’s a big chance one (or more) of your competitors is also active on that platform, which means a strong competition that’s based on who has the lowest prices. And even if sales go well, the commission you need to pay to the marketplace often has quite the impact on your profit margins.
The forced urge to perform is also something not every retailer feels comfortable with. In order to sell your products through an online platform, there are often many requirements one needs to qualify. Many platforms demand a certain kind of velocity: retailers need to deliver within a certain time period or they need to answer consumers’ questions within a couple of hours.
And, by joining an online marketplace, you also offer lots of valuable data to that same marketplace. Imagine, for example, you’re selling a product that’s hugely popular among a certain customer group. The marketplace could decide one day to (manufacture and) sell that same product itself for a much lower price.
Examples of market places
It is no longer just American ecommerce giants such as Amazon and eBay that have left their mark in the global ecommerce industry. Asian and European giants are also increasingly making name for themselves. Think for example of the German fashion companies Zalando and Otto, the Chinese companies Alibaba and JD.com, the Japanese player Rakuten and the Dutch retailer Bol.com.
Whatever the assortment, chances are there’s a (specialized) marketplace that fulfills your needs. According to the European Commission, in Europe alone there are over 7,000 online marketplaces and platforms. To better protect retailers who joined these platforms, the Commission came up with a set of rules.
For example, the need to explain the most important parameters that form the internal ranking of retailers. They also need to tell which data they gather and how they will use these. And the European Commission also wants these platforms to set up an internal complaint-handling system to better assist business users.
Amazon has announced it will open a new and bigger Spanish headquarters. This 12,000 square meters building will be located in Madrid’s upcoming business district of Méndez Álvaro. It will host Amazon’s current 400 corporate employees as well as provide capacity for over 1,000 employees.
In many countries, Amazon is the first stop for online shopping. In Switzerland, there is still no corresponding counterpart. A recent survey shows that three quarters of retailers think that a strong Swiss B2C online marketplace would be good for the country, so Amazon can’t gain more market share.
Allegro has opened its doors in Germany. The Polish ecommerce leader made a quite entrance in its neighboring country. The ecommerce service should help Polish sellers with marketing their products in Germany, Europe’s third largest ecommerce country.
Rakuten is closing its marketplace in the United Kingdom in August. The online platform will also cease its operations in Spain and move customers and merchants from the Austrian website to the German website. The Japanese company wants to focus fully on France and Germany, where its websites have the scale and potential for sustainable growth.
In some countries in Europe, you will use eBay or Amazon if you want to trade your goods via an online marketplace. In Poland, you might get fewer customers than you would expect if you use these American websites. That’s because Allegro is the leading marketplace in Poland. Did you know you must have a Polish website if you want to trade via Allegro?
Fyndiq, an online bargain marketplace from Sweden, has decided to quit its business in Germany. After less than a year, the Swedish company hung a “Sorry, we’re closed” sign on its German ecommerce website. Now Fyndiq is only active in Sweden again.
In 45 days, the best European soccer countries (minus the Netherlands) will decide which country will succeed Spain as the European champion. To get fans in the mood, Amazon France opened a dedicated online Euro 2016 shop, containing more than 134,000 items for soccer fans.
WeMarket has today officially launched its B2B marketplace. International buyers and sellers can do business with each other on this online platform, without having to deal with private customers. The Dutch website is an initiative of one of the founders of file transfer website WeTransfer.
Swiss Post has started in Bern an online marketplace for small businesses. This platform, called Kaloka, will take care of the entire ecommerce value chain, from online store to logistics. The postal service of Switzerland will also integrate local startups into the project and offers a SMS-butler.
Slightly more than half of active traders on Amazon’s German marketplace actually come from Germany. In absolute figures, it concerns about 27,000 German retailers. For comparison: on eBay Germany, there are about 122,000 German suppliers active. One in five retailers who sell via Amazon come from the United Kingdom and more than 9 percent comes from Asia.
Running an online marketplace from somewhere in Europe used to be very complex, with all the different tax rules. But since the beginning of last year each company that sells digital goods is forced to collect VAT based on the country of residence of each buyer. This didn’t make it easier. A European startup explains why.
PrivatBank, the largest commercial bank in Ukraine, has launched its own online marketplace, called PrivatMarket. Buyers and suppliers come together on this platform that was been in the works for quite some time. PrivatMarket is aimed both at private and business clients from the Ukrainian bank.
The British company Fancy Me has received many complaints after one of their costumes went viral. The UK online retailer sells ‘wartime refugee’ costumes and many customers are now furious. The outfits are said to be insensitive in the light of the ongoing migration crisis in Europe.
Marketplace solutions provider Mirakl, has launched its business-to-business solution. The French company developed Mirakl Marketplace B2B to help distributors and manufacturers create their own online marketplaces.