‘Once you are established on one or two marketplaces, the infrastructure is set up,’ says Paul Sonneveld, CEO of Merchant Spring. ‘There are lots of things you can reuse to launch on others, the cost of which then becomes quite marginal.’
There’s hardly any doubt the lure of selling on online marketplaces has ballooned in recent years. This has, in part, been driven by the relative ease of expanding to additional ones after having a steady and reliable framework in place. In fact, by Paul's estimates, a retailer that's present on three to four marketplaces today is likely to be on twice as many in just three years.
But where there's increased marketplace sales potential, there are exponentially more new challenges – something Paul understands better than anyone else.
As one of the top full-service marketplace operations agencies in Australia, Merchant Spring has an impressive track record of leading brands to success. On average, they help brands to a sales uplift of more than 400% within the first six months.
How is Merchant Spring able to do that?
To answer, we need to first understand their story, what they do, as well as the challenges businesses face on marketplaces.
Merchant Spring: Turning Marketplaces Into Meaningful Sales Channels
Merchant Spring was started by four founders in 2017, just as online marketplaces’ popularity in Australia started to surge. The opening of these new windows of opportunities for businesses remains a vivid memory for Paul.
‘All of a sudden, brand owners and retailers in Australia that want to do business in ecommerce went from only having their own websites to having six or seven other marketplace options before them,’ recalls Paul.
This is where Merchant Spring came into play. Targeting mid-sized businesses with relatively little experience with online marketplaces, Paul and his team facilitated their launch and solved all the pain points that came along with it.
‘That includes consulting, technical integrations, launching, and running their storefront.’ In doing so, they also created their own marketplace management software.
Today, the company is made up of a team of approximately 30 and operate on over 80 marketplaces. In addition to mid-sized companies, their portfolio includes big names like L’Oreal, Brita, PETstock, and Jeanswest.
Challenges Faced When Entering New Marketplaces
“Using integrators, they pushed their ecommerce listings onto eBay and other marketplaces and stood back, waiting for the sales to roll in. ”
As the popularity of online marketplaces in Australia rose, ecommerce businesses rushed to grab a piece of this lucrative pie.
Using integrators, they pushed their ecommerce listings onto eBay and other marketplaces and stood back, waiting for the sales to roll in.
Instead, not much happened. As it turns out, there were several challenges they hadn’t anticipated:
1. Optimising for the Platforms
As Paul explains, pushing your listings onto these various platforms is just the basic plumbing, but more is required to get results.
‘Certainly, on places like eBay and Amazon, that just doesn’t get your products ranked. It is important to invest the time to optimise them, whether it be titles, attributes, or other aspects, to make sure you get the best possible rank.’
2. Rising to Higher Standards
It didn’t take long for companies new to selling on eBay and Amazon to realise that these platforms prioritise the full shopper experience over short-term sales.
“The expectations of someone on Amazon or eBay is certainly way higher...”
‘The expectations of someone on Amazon or eBay is certainly way higher than their internal expectations that they might have put on their own website,’ says Paul.
‘Our clients had to get used to the expectations of marketplaces around the end customer and in shipping things out of your warehouse and being delivered quickly.’
3. Complying With Product Listing Requirements
Just as it is important to optimise product listings to rank high, Paul explains “Businesses also need to meet the platforms’ minimum requirements to prevent their listings from being potentially deactivated. And the minimum requirements on these marketplaces tend to be much stricter than what they may be used to on their own ecommerce stores.”
4. Familiarising Themselves With the Different Mechanics
But by and far, the biggest challenge is in understanding the intricacies in how each marketplace works.
‘All of them have sets of terminology that are unique only to them, not to mention tools to drive sales as well, which require different approaches,’ explains Paul.
‘Understanding each of the platforms specifically so that you can really make the most out of them and generate as many sales as possible as possible is key.’
Assessing the Marketplace Opportunity - Is it Worth It?
The value of online marketplaces isn’t always immediately apparent to businesses, and this is exactly where Paul and his team turn to ShelfTrend.
“ShelfTrend gives us lots of great market insights around the size of potential categories, the sales velocity, the level of competition in certain categories, and also the level of investment that competitors are putting into the platform.”
Large brands, fast-moving consumer goods companies, and big retailers ask Merchant Spring to size the marketplace opportunity, understand its landscape, and create their strategy, which can then be implemented in-house.
‘For us, ShelfTrend plays a big role because ShelfTrend gives us lots of great market insights around the size of potential categories, the sales velocity, the level of competition in certain categories, and also the level of investment that competitors are putting into the platform,’ explains Paul.
Through ShelfTrend, Paul’s team can swiftly identify which Australian retailers aren’t paying much attention to their eBay listings.
‘When you pull the listing characteristics through ShelfTrend, you can very quickly see they are not optimising any aspects and are ranking very poorly in terms of keywords.’
This, in turn, allows Merchant Spring to demonstrate whether their clients’ competitors are putting enough effort into their eBay operations, the lack of which presents a clear opportunity for them.
‘Using ShelfTrend as a data source and extracting the relevant analysis out of there to build a strategy for our clients has been really useful and valuable,’ says Paul.
Identifying eBay Listing Issues - and Upside
Paul’s team use eBay analytics in their pre-sales process when selling their content optimisation services.
‘With ShelfTrend, we can very quickly run a diagnostic and score potential prospects and their eBay stores across 12 different dimensions,’ says Paul.
The diagnostics help to quantify answers to questions like:
How well are you ranked?
What’s the length and quality of your titles?
What’s the quality of your item specifics?
How do your images and pricing compare to the top listings?
With this data in hand, Paul’s team benchmarks their listings against key competitors’ and best practices. This way, they help brands or businesses to understand why they may be falling behind.
“ShelfTrend gives us a pretty good indication, based on a ranking, the potential sales uplift from investing in store and listing optimisations.”
ShelfTrend’s data also enables them to estimate how much more sales these businesses can have if all these problems were fixed.
‘The other thing with ShelfTrend is that it gives us a pretty good indication, based on a ranking, the potential sales uplift from investing in store and listing optimisations,’ says Paul.
eCommerce and Marketplaces: The Road Ahead
Even as the global coronavirus situation continues to tether on uncertainty, one thing is for sure: With the pandemic accelerating the shift to ecommerce by as many as five years, online marketplaces are where the action is.
The numbers say it all: Amazon’s 2020 revenue grew by 38% and eBay’s by 19%.
‘A lot of foot traffic will be declining and will never come back, pushing brick-and-mortar stores into unprofitable territory,’ says Paul.
One of the biggest advantages marketplaces offers is the massive pool of untapped audiences.
‘Marketplaces have huge audiences who are very loyal. They don’t tend to shop anywhere else,’ explains Paul. ‘There is also very little overlap with buyers on ecommerce websites. In other words, there’s only an upside to be had.’
That said, for ecommerce companies, now’s a better time than ever to move into online marketplaces.
ARE YOU LOOKING TO GROW YOUR ONLINE SALES?
SIGN UP TO SHELFTREND FOR FREE
We’ve got the data to monitor your competitive position.
By using ShelfTrend, you can:
Get visibility of what over 170 million buyers are purchasing from the world’s largest marketplace - the product range, pricing and sales performance.
Watch competitors and get to know their selling strategies.
Discover an untapped niche with proven sales.
Troubleshoot business issues by checking yourself against others selling in the same space.
Get to know your online buyer and their product preferences.
ShelfTrend is the go-to-market research tool used by over 35,000 online businesses, both large and small.
We deliver real-time eBay marketplace data - where over 170 million people buy - so that you can research products, prices, sales and your competition.
Know more. Sell more. ShelfTrend.