E-Commerce Seller Financing   •   March 17, 2021

Regardless of whether you are an established vendor or are only starting out as a merchant, online marketplaces can help you break into the e-commerce market as well as significantly expand your reach and customer base.

For new sellers, online marketplaces can offer a quick way of starting a business in the e-commerce world. You may not necessarily be eligible for all of the best online marketplaces, though. For instance, Walmart is an invite-only platform. This means that you need to be approved to be able to sell. So, new sellers with no satisfied customer reviews are unlikely to qualify. Meanwhile, platforms like Amazon, eBay, and Etsy allow you to set up a seller account and start selling right away.

If you are an established seller with your own online store and a solid customer base, joining online marketplaces can help you significantly expand your reach and potentially reach millions of new customers.

Let’s take a look at a few of the top benefits of selling on online marketplaces.

Benefits of Selling on Online Marketplaces

1. Possibility to Start Selling Immediately

Starting an online business on online marketplaces like Amazon is relatively easy and straightforward.

You can upload your assets to your platform of choice and use their templates instead of needing to invest tons of effort and money into branding, creating a storefront, and more. Marketplaces are user-friendly and there is no need to know how to code or be an expert in marketing.

In addition to the above, you can opt for programs such as Amazon FBA or eBay Global Shopping. These can help you ensure fast delivery as the marketplaces become responsible for packing and shipping your goods.

2. Massive Customer Bases

Amazon, eBay, Walmart, and Etsy aren’t just some of the top online marketplaces. They are also widely popular and have large customer bases of users who shop on the platforms regularly. So, by listing your products there, you could theoretically put them directly in front of the eyes of millions of potential customers.

3. Established Reputation

Online marketplaces have an established reputation. Therefore, many shoppers prefer to search for and buy products there before opting for an unknown or lesser-known independent online store. In fact, about 56% of Amazon users start their product searches on the Amazon marketplace.

Since the retailer does not have control over customer reviews on Amazon and other online marketplaces, they are usually also reliable sources of customer feedback.

4. Inexpensive Way of Managing an Online E-Commerce Business

Online marketplaces either charge monthly maintenance fees or small fees for listings, transactions, or similar. Either way, this usually requires a very small investment from the merchant. If you opt for fees charged when your products are sold, you won’t even pay until you make sales.

5. Secure Payment Handling

Lack of trust in how secure payments are is one of the top reasons for customers abandoning their carts. Customers may fear that their card information may be stolen or the website may be a scam.

This is not true about online marketplaces. Since they process payments in a secure manner, shoppers can rest assured that their financial information is safe.

Online Marketplaces Have Their Drawbacks, Too

Despite the advantages and benefits listed above, there are also drawbacks that can prevent you from reaching success on online marketplaces. These include:

• Large competition: online marketplaces do not only have massive customer bases. The number of online vendors is large as well. So, even if your products potentially show to millions of shoppers, they need to compete against similar or identical products from other vendors.
• Lack of customization options: Since you must follow the guidelines, rules, and templates of the online marketplaces, this leaves you with very few customization options. This can limit your creativity, prevent you from being able to stand out from the crowd, and require you to invest in advertising your products to gain sales.
• Preference to more successful merchants: marketplaces tend to offer preferential treatment for merchants that are more established and popular. This can limit your reach, exposure, and profits.
• No access to customer data: Having our own online store and customer base enables you to reach out to and market directly to these buyers. If you sell on online marketplaces, they are the ones keeping customer data such as their e-mail addresses.
• Delay in receiving profits: While marketplaces and buyers can benefit from your activity and efforts almost immediately, you may need to wait weeks or even months to receive your cut for the sales you have made.
• Your store can be terminated: Online marketplaces can terminate your operations on their platforms at any time for a range of reasons, making you lose everything that you have worked for.

Final Words

There are impressive benefits of joining and selling on online marketplaces and you may be missing out if you do not list your products there. However, there are also drawbacks that you should be aware of. Therefore, it is essential that you assess the situation of your e-commerce business to decide what the best option for you is.

Are You an Established Seller Looking to Grow Your Business on Online Marketplaces?

If your online store is bringing in income and you are looking to expand your reach, E-Commerce Seller Financing is here to help. We offer easy and straightforward financing to established vendors so that you can invest in expanding your inventory, adding new products, improving your marketing efforts, and more.

We offer easy terms, no hidden fees, and fast approval times. Learn more about our financing options.