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Are marketplaces your friend or your competition?

Amazon Marketplace is an extremely useful tool for selling products online, especially for finding new customers. But is it also your competition?

Taking batteries as an example, a simple search for a pack of AAs returns all the familiar brands: Duracell, Energizer etc. But among the top results – and often at the very top – are Amazon’s own batteries. It’s the same for a growing number of products.

Now, Amazon makes a small profit whenever any product is sold through its website. But they also gain something just as valuable: the data. Holding information such as who buys a particular product, and how they buy it, and when, and why, is all vital information to know. It helps future positioning and marketing.

When you sell through Amazon, Amazon gets all this data. They learn all about selling products just like yours. And maybe one day, that’s just what they’ll do, competing directly with you.

So as an independent retailer, what can you do? Crucially, I wouldn’t recommend avoiding Amazon Marketplace altogether. Marketplaces are a great way to make your brand visible, to appear in the search results of people who don’t yet know you.

But once an individual has bought from you, it’s important to encourage them back to your own site, at your own domain, carrying your own branding. You can do this by including leaflets when you mail out the goods, or following up on purchases with a friendly email. Discount codes and new product announcements work well.

If you only ever trade through marketplaces, you’ll forever be up against competition with greater resources (remember, the man who owns Amazon is the richest man in the world and has his own spaceships) as well as rivals willing to sell at lower prices and smaller margins than you. You won’t win either of those races.

Where you can succeed is by building a brand, becoming the company customers love to shop with. Use marketplaces to increase your visibility, then win their loyalty so that you’re able to do business on your own site, on your own terms.

 

If you’d like to learn more about setting up your own online shop, you can speak to our ecommerce experts on 0333 004 0333 or request a callback here.

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