What is a Marketplace? Get to know another popular online selling channel.
A marketplace is an online platform that acts as an intermediary between sellers and customers, helping to provide an opportunity for stores to build new customer groups and increase sales effectively.
Currently, there are various channels for business owners to present their products and services. The Marketplace is another channel that is rapidly gaining traction and meets the behavior of modern consumers who want to choose products from multiple vendors in one place online. For this reason, the Marketplace has become a crucial option for owners of online businesses who want to give their brand access to a wide range of consumers quickly and efficiently.
Article Contents
- What is a Marketplace? An Online Selling Channel Business Owners Must Know
- Marketplace VS. E-Commerce: How Are They Different?
- What are the Advantages of a Marketplace?
- Limitations of a Marketplace
- What to Know Before Selling on a Marketplace
- Examples of Popular Marketplaces in Thailand
- What are Some Techniques for Selling on a Marketplace?
- A Marketplace is Another Channel for Building a Customer Base and New Revenue that Entrepreneurs Shouldn't Miss
What is a Marketplace? An Online Selling Channel Business Owners Must Know
A Marketplace is a channel that acts as an intermediary connecting stores and customers. A Marketplace is a place that gathers products and services from various stores in one location, allowing customers to search, compare, and choose to buy products or use services conveniently. This benefits both buyers and sellers; sellers have the opportunity to generate more sales than by selling only in their own small space.
As times have changed, Marketplaces today can be divided into two types:
- Offline Marketplace: This is a physical place where buyers and sellers meet directly, such as a market or a shopping mall.
- Online Marketplace: This acts like a virtual shopping mall or market where buyers and sellers gather online. Sellers do not need a physical storefront, and buyers do not need to travel to shop for goods.
Online marketplace platforms have come to play a more significant role in the current market. With many advantages, an Online Marketplace is another channel that can help a business grow effectively and is another tool that business owners should not overlook.
Marketplace VS. E-Commerce: How Are They Different?
Both Marketplace and E-Commerce are part of online marketing that helps increase revenue opportunities, but they have clear differences as follows:
- Marketplace: This is a platform that acts as an intermediary for various brands to present their products and services in one place. The Marketplace is not controlled by any single product brand, and stores that sell on the Marketplace must comply with the platform's policies.
- E-Commerce: This is an online sales channel operated by a specific brand or store. It is a single store that has the freedom to sell its own products and services, but the store must have its own back-end management system, build credibility, and have strong marketing to help customers access the business more easily.
Choosing a business channel depends on the business's planning and goals. If you are starting a small business or engaging in C2C (Consumer to Consumer) sales, selling on a Marketplace is a more suitable option. However, if you want to build a stable brand with a clear image, a private E-Commerce site might be a more interesting long-term answer. Nevertheless, brands that want to expand their customer base, generate more income, and grow in the long term can use both a Marketplace and E-Commerce concurrently.
What are the Advantages of a Marketplace?
A Marketplace is another online selling channel that offers many advantages for businesses, as follows:
- Access to a large customer base: Similar to a shopping mall that can attract a large number of shoppers to view and purchase goods, many Marketplace platforms also have a large customer base ready to buy products available on that platform.
- Increased opportunities for advertising and participation in promotional activities: Many Marketplace platforms often organize various campaigns to stimulate sales on the platform. Selling products and services on these platforms may allow your business to benefit from those campaigns.
- A low-cost sales channel: Selling on a Marketplace has lower costs than building an E-Commerce website or application, or renting sales space in a market or shopping mall, yet it can offer greater visibility due to a massive number of users.
- Conveniently collect insights for business planning: Many Marketplace platforms have analysis tools for sellers, allowing them to see insights such as sales figures, buyer behavior, or engagement on their storefront or products, which helps businesses easily leverage this information.
- Convenient to use, reducing back-end workload: Most Marketplace systems are easy to use for both buyers and sellers. Simply uploading product and service information to the system allows you to start selling without needing technical knowledge or building a website yourself. In addition, Marketplaces also help reduce back-end work, such as having an online payment system that supports a variety of payment channels.
- Increases business credibility: Even for sales via chat on Facebook Marketplace, you can use payment services through Meta Pay or a Payment Link. The KGP Payment Links+ service is a highly secure payment channel, and you can customize the payment link to match your brand's image, further increasing the store's credibility in the eyes of the customer.
Limitations of a Marketplace
Although the Marketplace is a popular online selling channel, there are still limitations to consider, including:
- High competition: Because anyone can start a business on a Marketplace, there are a large number of competitors.
- Less flexibility: To ensure that sales on the Marketplace platform comply with rules and regulations, stores need to have a good management system for both inventory stocking and timely delivery.
- High chance of refunds: Since many platforms allow for easy product returns, stores have a higher chance of encountering refund requests than when selling on their own E-Commerce site.
- Fees and commissions: Although selling on a Marketplace may have low initial costs or no listing fees, there are often hidden costs, such as transaction fees or sales commissions, which can reduce profits.
- Limited access to sales data: Selling on many Marketplace platforms may provide limited customer and sales data. Additionally, the sales data belongs to the Marketplace, which means there is a chance the Marketplace could use that data to create a business that competes with yours.
What to Know Before Selling on a Marketplace
Before deciding to sell products and services on a Marketplace, sellers need to understand the following information, as it may affect their long-term sales on the platform.
Marketplace Platform Rules
Each Marketplace platform has different rules, policies, and regulations. Before deciding to do business on a Marketplace, you should be aware of the platform's limitations to see if your business is a good fit. If a store cannot comply with the platform's rules, it may face penalties that could affect sales and business credibility.
Marketing and Advertising Costs
Although opening a store on a Marketplace may be free, to reach more customers, you will need to buy advertising or participate in various campaigns organized by the platform to increase visibility. These activities will incur costs. For this reason, business owners should understand and carefully plan for expenses related to marketing and advertising.
Brand Control or Reduced Visibility
For brands with a clear CI (Corporate Identity), using a Marketplace may have limitations in storefront design, preventing your brand from displaying a clear identity and standing out from competitors. In addition, the platform can reduce your store's visibility if the store does not cooperate with the platform or receives low ratings from buyers, which directly affects sales.
Examples of Popular Marketplaces in Thailand
There are various popular platforms for selling goods and services on Marketplaces in Thailand. For example:
- Facebook Marketplace: This is an online selling channel on social media with a large customer base from Facebook users, which is one of the top social media platforms both in Thailand and globally. Selling on Facebook Marketplace helps products reach many customers, and there's no need to create a store; you can start selling immediately with just a Facebook account.
- Shopee: This is a very popular Marketplace today, with strengths in strong marketing, frequent promotional activities, and ease of use for both sellers and customers. This makes Shopee an important platform that businesses of all sizes should not miss.
- Lazada: Another major competitor to Shopee with a large customer base and numerous sellers. Its strengths are a robust back-end system and logistics network. Currently, Lazada also has promotional campaigns that help create opportunities for sellers to increase their sales.
- TikTok Shop: A newer Marketplace that is growing rapidly, leveraging the strengths of video content and live selling, which can highly motivate purchases and reach customer groups very effectively.
What are Some Techniques for Selling on a Marketplace?
To increase sales and succeed on a Marketplace platform, you can apply these techniques:
- Sell products with high demand: The more a product is in demand, the higher the chance of a successful sale.
- Have few competitors: If the product you sell is in demand and also has few competitors, it's an even better opportunity for the business to generate more income.
- Beautiful and outstanding product photos: Since selling on a Marketplace has the limitation that customers cannot physically touch the product, taking beautiful and striking photos will help attract attention and increase the chances of a sale.
- Complete product details: To build credibility and help close sales faster, providing complete product details from the start is important. Additionally, you should include the product name and related keywords in the description field to make it easier for customers to find the product.
- Quick chat responses: Providing fast and friendly service will help create a good customer experience, can close more sales, and increases the chance of repeat purchases.
- Attractive promotions: If there are other products like yours on the Marketplace, having an attractive promotion is what will make customers choose your product. This could be a discount, a limited-time Flash sale, or a loyalty points system, etc. These things will help attract customers and close more sales.
A Marketplace is Another Channel for Building a Customer Base and New Revenue that Entrepreneurs Shouldn't Miss
A Marketplace is a sales channel that helps buyers and sellers meet more easily through intermediaries like various Marketplace platforms with a large number of users. Doing business on a Marketplace, therefore, increases the chances for customers to see and decide to buy products. However, selling on a Marketplace is highly competitive. To be a winner in this market requires appropriate techniques and strategies, including increasing credibility and creating a good customer experience, to gain an advantage and grow sustainably in the online market.
For business owners who want a tool that helps make money transfers on Facebook Messenger more secure and faster, KGP provides online payment services that make selling on the Facebook platform secure and reliable. This includes Meta Pay, which can accept payments in many forms, including QR Payment, credit cards, debit cards, or mobile banking. Additionally, there is a P2P Transfer service for receiving money through Facebook Messenger with no service fee. The recipient simply sends their bank account number via chat, and the system automatically creates a transfer button. When the sender presses the button and completes the transaction, a slip is automatically sent to the Facebook Messenger chat, making receiving money on Facebook easier and more secure than ever.
KGP, Payment. Make It Smooth.
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