Is selling online on marketplace sites a secure way to grow your sales? What are the risks of selling on Amazon, eBay or Sears? Read this article and find out!
Did you know that 90% of the retailers in the US sell through marketplaces like Amazon, eBay, Etsy, Newegg, and others? We suppose there is a good reason why so many retailers use these websites, right? They are after all an easy way for you to get your products in front of millions of people.
The marketplace websites have their own challenges that can put your business at risk. In this article, we will discuss the risks of selling online on marketplace sites:
- Low-Profit Margins: One of the biggest obstacles to selling online is low-profit margin. Every online marketplace has its own seller fees, for example, monthly seller fees, shipping fees, per-item fees, referral fees, and closing fees. This is all part of the cost of running a business online. For some sellers and online stores, the risk of low-profit margins is real.
- Running a store on a rented land: The online marketplaces offer an already established platform for you to sell on. This means you don’t have to worry about branding, maintenance or anything else. But, what happens when the ecommerce platform makes a major change? You will have to pay higher fees. In case you make a mistake, the platform has the right to kick you off the website for good. In other words, you are not in control of what happens.
- Competing against the marketplace: Most of the popular marketplace websites have their own products for sale. As you can conclude by yourself, one of the biggest competitors is the platform itself and this is a tough competitor to fight against. If you have just started selling online and you are doing well, the marketplace could start selling the exact same products. A lot of people think that the marketplace is a rival that they will never beat.
Sometimes is easy to notice the benefits of selling online on marketplace websites. You can build your own online store in just a few minutes and you have a group of people who will purchase your products. It is easy to overlook the risks. Knowing both the pros and cons can help you decide what is best for your business.