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Are online marketplaces right for you?

September 23, 2016

Indirect selling or third party online marketplaces, such as eBay, can be a great way to broaden your reach, trial new products, and test different regions with lower costs compared to setting up a new storefront.

Groupon, eBay, Etsy and Zazzle are just a few examples of third party websites being used by Australian retailers to maximise the digital space.

Some benefits:

  • Relatively easy to setup and manage
  • Pre-existing traffic on the site
  • Ideal for testing new products, regions and demographics
  • Ideal for clearing sale or discounted items
  • Potential for international exposure
  • Requires less staffing than bricks-n-mortar storefront
  • Technology & specific software tools are widely available
  • Niche retailers that master the ranking system can do especially well

Some risks:

  • Online branded shops require more extensive setup and maintenance
  • Consumers can easily compare prices and deals with competitors
  • You need a robust logistics or drop-shipping process in place
  • Your margin needs to factor in shipping & handling costs
  • Fees are usually percentage of sale value rather than a flat fee, and can be applicable at multiple stages of the sale (eg. eBay, PayPal)
  • Feedback from every single sale is visible and comment moderation is limited
  • Lack of control over the interface and its policies

Ready to try indirect selling but not sure where to begin?

Things to consider when setting up an indirect selling strategy:

  • Does the website or online marketplace have a good reputation?
  • Is there where my customers are already shopping for similar goods?
  • Are my main competitors here too?
  • Is my product something people like to buy online?
  • How labour intensive is the set up process?
  • What fees do they charge?

To learn more about indirect selling visit the NRA Digital Business Kit for Retailers here.


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