Champion Small Business Sellers to Transform your Online Marketplace
In aid of Independent Retailers Month 2021, it’s time we take a closer look at the role of the small business on online marketplaces, and how this has changed in recent years.Marketplaces have started to pay more attention to independent retailers, recognising the many benefits that come from stocking their products. eCommerce giants such as Amazon and Ebay are even offering accelerator programmes and seller schooling in order to make their platform more desirable and accessible for small business venors onboarding.
So the question is, what is the driving force behind this new focus?
The Rise of Small Businesses
The pandemic had a huge effect on small and medium-sized businesses in various ways. Whilst many existing businesses were struggling to stay afloat, there was also a dramatic increase in start-ups and new businesses being created: the United Kingdom alone saw a year-on-year increase of 29%.
As we enter a new digital era, it’s no surprise that many of these new businesses found a home on an online marketplace. An outstanding ten years’ worth of online deliveries were made in the US alone in the first 8 weeks of the pandemic. For small business owners, there was never going to be a better time to start out on their selling journey.
Not only this, many consumers’ shopping priorities shifted. People were drawn to the idea of supporting small businesses during this time; avoiding larger brands that they knew would survive the pandemic regardless.
The stats reflect this. Amazon recently released a report, stating that small and medium businesses accounted for more than 60% of all units sold on the online marketplace throughout 2020, with these sales easily outpacing first-party listings.
Notonthehighstreet - a B2C online marketplace renowned for retailing small, creative businesses - also saw an increase in EBITDA by 13% in 2020, with 220 small businesses making sales of over £1 million through their platform.
In their annual report, the CEO Claire Davenport openly anticipates a rise in competition for this market as a result of the pandemic, stating that ‘the vibrancy and creativity of UK small businesses makes our sector an attractive prospect, so our market has, and will, become more competitive.’
If small businesses are now proving to be a fundamental contributor to online marketplace growth, then the next question is: why should small businesses choose to sell on your marketplace?
Leaving D2C Behind and Taking a Direct-To-Marketplace Approach
Taking a Direct-To-Customer approach has historically been considered the surest path to eCommerce success. Any new business would simply set up their own website, and use paid advertising through Google and Social Media to drive traffic to their products.
Questions are now being asked as to whether this is still the best strategy to drive growth, when looking to the future of eCommerce. If convenience is the ultimate key to success and consumers are drawn to this ‘one-stop’ shopping experience, then taking a D2C approach may very soon be outdated.
It is not only this seamless purchasing journey that makes an online marketplace so appealing. As a new seller, you can position yourself on a platform that already has millions of monthly visitors, saving both money and time - you do not have to invest money into a website or pay for advertising.
Consumers are more likely to trust a lesser-known brand through a well-known marketplace, and the AI-powered personal shopping experience means that if you list your products well, they will be optimised much more effectively.
Marketplaces made up 55% of the global eCommerce market in 2020, and they are showing no signs of slowing down any time soon. This means that if you are not selling on them, you are competing against them, which is a dangerous game for a new business in a considerably saturated seller market.
Attracting Small Sellers to Your Online Marketplace
There’s never been a time when so many tech, social media and e-commerce marketplaces are trying to draw small businesses and independent retailers to their platforms. As the statistics have shown, they are extremely valuable and a huge contribution towards the rapid growth seen in recent years.
In order to attract these businesses to your platform and drive growth, you will want to make your online marketplace as desirable and accessible as possible for first-time sellers or independent retailers.
Equally, when onboarding sellers with little to no reputation, it is important that you truly know they are trustworthy and valuable before granting them access to your business.
Both elements are key for any online marketplace that supports small business success.
If you would like to find out more on why building trust is so vital in eCommerce, download our Whitepaper now.