A guest article by Katrina Yeo
Ahhh. The world as an online marketplace.
Are you considering expanding your business and taking it one step further? Are you hoping to gain access to a much larger shopper base? Should you take your business to an online marketplace?
Let’s discuss the general pros and cons of using an online marketplace, followed by a run through of the different marketplaces available.
Pros vs. Cons of selling at an online marketplace
Online marketplaces have established a customer base that you might not otherwise have access to. A larger customer base that you can market to translates into more sales and thus more revenue.
Customers on online marketplaces search for what they want via product listings. They don’t search for a particular seller. Hence, if you prove your products to be a bang for the buck, customers are sure to notice. And of course the ultimate aim here is to convert them into loyal customers of your brand.
Most marketplaces charge you on a per transaction basis. Of course the details and rates differ on each platform. However, the outcome is the same: all these undeniably drive up your costs.
Buyers on the marketplace are often price sensitive since they can instantly compare thousands of products. In addition, what really attracts buyers are sales and discounted items. Therefore, unless you are selling items that are unique in nature, you might inevitably find yourself making razor thin margins.
Inventory is another issue you need to think about. Do you allocate a fixed quantity of products to the marketplace or risk double selling your inventory? Is your production/acquisition of product time short enough to cover such potential situations?
If you have weighed the pros and cons and decided that the online marketplace is for you, then here are some online marketplaces that you can consider!
The online marketplace
Lazada is probably one of the leading marketplaces in Singapore and the South East Asian region. It is generally well known locally and has even partnered with Taobao to introduce Taobao Collection at a flat shipping rate of $2.99. Lazada is an option I would personally recommend should you decide on entering a marketplace.
Benefits of selling on Lazada include:
- No registration and item listing fee
- Market & Data Analytics support
- Up to 560 million buyers
- Generally easy to use and navigate for both sellers and buyers
Rather, Lazada charges you per transaction made for:
- shipping, starting from $2.99
- 2% payment gateway charge
- 1-7% commission fee.
You can find out more about Lazada here.
Qoo10’s shoppers are more spread out across the globe, with majority of its’ sellers originating from China. Because of this, the site is not very localised and the language used is often strewed with errors. It is important to keep this in mind as it could indirectly affect your brand’s image. In addition, I personally feel that the site is messy and challenging to navigate.
Benefits of selling on Qoo10 include:
- No registration and item listing fee
- Qoo10 Sales Manager (QSM) to help manage your store
- Global sales, including countries like Malaysia, China, Hong Kong, Indonesia and Japan
- Able to have promotions such as seller coupons, group buy and timed discounts.
In terms of transaction fees, Qoo10 charges based on your seller grade and corresponding item price:
You can find out more about Qoo10 here.
ezbuy is another local marketplace that targets the South East Asian region. Although smaller and less well known than the previous 2, the site is simple and user-friendly, and has stronger local roots here in Singapore.
Benefits of selling on ezbuy include:
- 1 Million active users
- Access to their 6 local warehouses
- Guided help to use their system from their Operations team
- Dispute mediation from their Customer Service team
However, ezbuy does not publicly publish their fees for sellers. It seems to be on a case-by-case basis as they require you to contact them and submit relevant documents. This might also mean that it takes a longer time to set up a seller’s account.
You can find out more about ezbuy here.
With over 150 million monthly unique visitors, Amazon targets the American, Mexican and Canadian markets. This marketplace is very well-established since it was founded back in 2004. Some say that Amazon was what kick-started the online marketplace.
Benefits of selling on Amazon include:
- Fulfilment by Amazon (they pick, pack, and ship your products and take care of customer service and returns)
- Sponsored Products keyword-targeted advertising
- Customisable shipping rates (for Professionals only)
However, selling on Amazon is generally more expensive:
Referral fees range from 8%-45% depending on the category of the product sold. (Don’t be too shocked by the 45%, those are for Amazon products. Majority of the referral fees range from 15%-30%…Which is still quite a bit to swallow.)
You can find out more about Amazon here.
eBay is unique in its’ approach to selling since the company offers 2 formats of selling: by a fixed price or through an auction. So if you have a very unique item that is in high demand, eBay could prove advantageous for you. The site is also easy to use and has a well-written Help section.
Benefits of selling on eBay include:
- Aforementioned unique way of selling
- Very affordable fees
- Large customer base, with customers from US, UK, Australia and Singapore
Selling on eBay Singapore is practically free, however, charges apply should you wish to list on other eBay paid sites such as eBay US, UK or Australia.
You can find out more about eBay here.
A truly home grown online marketplace, Carousell is an informal marketplace widely used by many Singaporeans. Using the platform itself is completely free, but do keep in mind that there are a lot of users who are there to sell their second hand items (that’s what the app is for, actually), so your store may not seem like a legitimate store. Nonetheless, I have decided to add this as an option to consider. Meet-ups are also commonly requested for (which you may have to politely decline).
Benefits of selling on Carousell include:
- Transactions are completely free (ie. no marketplace fees)
- Used by many Singaporeans
- Has a great community (the few nasty people aside)
- More informal in nature, if that’s your thing
In order to boost your listings, you may also choose to purchases bumps with Carousell coins. Prices range from 148 coins to 1498 coins.
You can find out more about Carousell here.
That’s it from me! Though there are some cons that weigh down the pros, the online marketplace is still very much vibrant and alive. You are encouraged to do a bit of homework before hopping on one of these sites. I wish you all the best!