A Short Guide to Major Online Marketplaces (Pt. 2)

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Marketplaces 2

Image credit: KamrenB Photography

Click here for Part 1 of this series about Amazon, eBay and Etsy

Click here for Part 3 of this series about Bonanza, CafePress, Roozt

The universe of online marketplaces certainly doesn’t end with Amazon and eBay – there are plenty of others that might be smaller and a little more demanding for starters, but provide a better chance of long-term business relationships and, usually, a slightly better profit in the long run as well. Today we will go through why you should (and shouldn’t) start selling on three very different online marketplaces: Rakuten, Sears and Newegg.

Rakuten – a Japanese Alternative

Rakuten was founded in 1999 and was primarily a marketplace intended for Japanese sellers and customers only, but now it’s one of the major worldwide online marketplaces. Most of the customers are still from Japan though, so at least a minor understanding of the country’s culture is needed to do business here.

Pros:

  1. Different customers. People who buy at Rakuten usually are not the same ones who use other marketplaces. Such loyalty might bring some long-term relationships in case the customers’ needs are fully satisfied.
  2. The marketplace is not a competitor. On Rakuten, you will only compete with other merchants. The marketplace doesn’t sell anything by itself and encourages its users to compete not only by price, but by their hospitality and customer service as well.
  3. Selling more with higher prices. The above mentioned type of competing is important to the customers as much as to the marketplace, so if you shine with your ability to please the customers, they’ll buy from you again even if your price is slightly higher.

Cons:

  1. Cultural differences. It might be hard to appeal to customers who are used to different service than you’re used to provide. To successfully sell on Rakuten, you’ll need to do some cultural research at first.
  2. Shipping costs. While a large part of your customers might be in the same country when you’re selling on eBay or Amazon, shipping costs to Japan might cause some difficulties if you use Rakuten. And it doesn’t matter who pays for shipping, the final price of the item still increases.
  3. Strong competitors. As Japanese customers and sellers alike value long-term relationships, it’s not easy for new sellers to carve their way into this market unless you sell something that is either rare or unique.

Sears – the Online Department Store

Sears is best known as a department store chain, but it certainly has an online presence, with thousands of transactions taking place every day. You can flawlessly list your items to be sold here, and the marketplace offers a B2B2C service, meaning you can send your items to Sears and they’ll take care of the rest.

Pros:

  1. Worry only about selling. Sears provides a picking, packing and shipping service, so the only thing you’ll have to do is make your items stand out from the crowd.
  2. Building trust. Customers tend to trust large entities such as online department stores more than they would a small private online store. As all the transactions are guaranteed by Sears, you should expect some additional sales for those customers who are familiar with online fraud.
  3. Simple cost structure. You pay only for the services you need, so you can plan much further ahead using this marketplace than you would if you had to market your own online store.

Cons:

  1. No reselling. If you have a reselling business, Sears is probably not the place to sell your goods online. Although exceptions apply, in all likelihood you won’t be able to resell in this marketplace.
  2. Additional costs. If the profit margin is low for the items you sell, the shipping and storage costs of Sears might prove to be more than your business can handle.
  3. Competing with the marketplace. Sears sells thousands of items by itself and might be your main competitor when trying to appeal to customers. You probably can’t offer such prices and discount structure as they can, so competing with Sears can be quite a difficult task.

Newegg – the Prime Choice for Technology

While the other reviewed marketplaces have an enormous range of merchandise on sale, Newegg is here for technology. You can sell computer hardware, software, other electronics, sporting goods, watches and jewelry in this marketplace, and it attracts customers who are looking for these things exactly.

Pros:

  1. An educated audience. The ordinary customer who comes to Newegg knows exactly what he or she wants, so you don’t have to blow bubbles when marketing the item – the price and customer service (including warranties) are the main factors that drive the customers to buy or not.
  2. Low commission rates. Newegg offers to sell your products for some of the lowest commissions in the market. Although they’ll still make up quite a sizeable portion of your earnings, this is a great way to reach much more customers than you would on your own website.
  3. Additional services. Newegg can pick, pack and ship your items if you can’t follow their strict 72-hour delivery policy. It might be costly, but you might still be able to save if you manage to sell in larger quantities.

Cons:

  1. Limited categories. If you don’t produce the items in the categories listed above, you won’t be able to sell on Newegg. Unless you have something exceptional to offer, they won’t create a new category just for your merchandise.
  2. Marketing still necessary. As Newegg’s customers are rather educated about what they’re buying, they’ll hardly purchase something that they haven’t heard about before. Thus you can sell on Newegg, but you’ll still have to make your products known on the Internet to be successful.
  3. Everything adds up. If you add the commission fees and the shipping service costs, there’s not much left to you unless you sell exclusive luxury items. So if you want to sell here, you’ll probably have to try and save elsewhere.

As you can see, these three online marketplaces are very different from each other. Rakuten is a great choice if you’re ready to enter a new market, Sears will provide their highly-rated name under which you can sell your own goods, and Newegg is a top alternative if you produce items that have something to do with technology. It’s hard to imagine a business that would successfully sell on all of those online marketplaces, but it’s possible – there are hardly any limits in the world of e-commerce!

Click here for Part 1 of this series about Amazon, eBay and Etsy

Click here for Part 3 of this series about Bonanza, CafePress, Roozt