Why Growing Marketplaces Can't Ignore Seller Verification
eCommerce is an exciting and growing sector, but competition is rising. The industry's fast pace puts pressure on marketplaces to onboard sellers quickly and reduce friction during the onboarding process.
But online marketplaces must know who a seller is and whether they are legitimate. Not only does this ensure regulatory compliance, but seller transparency helps drive buyer loyalty and improve the commercial health of eCommerce platforms.
Despite this, many marketplaces struggle to manage their seller data. It is an enormous challenge that can seem both daunting and expensive. But it doesn't have to be that way.
At detected, we help growing marketplaces implement seller verification and management every day. Compliance, of course, must be adhered to. But many upsides of seller verification go far beyond regulation and improve the future growth prospects for marketplaces.
Here are our top 5 reasons why growing marketplaces can't ignore seller verification:
1. A dynamic and ever-changing regulatory landscape
For online marketplaces, staying on top of compliance requirements is critical. Current and upcoming regulations include:
- eIDAS. The Electronic Identification and Trust Services regulation ensures electronic signatures, contracts and documents are authenticated.
- AML5. The Anti-Money Laundering standard for the prevention of money laundering came into effect in January 2020. AML5 requires businesses to follow KYC (Know Your Customer) processes to verify the identity of those they deal with.
- PSD2. The Payment Services Directive regulates payment services and payment service providers to enhance consumer protection.
- GDPR. Marketplaces need to ensure they are compliant with the UK General Data Protection Regulation. This applies to storing, accessing, protecting and controlling consumer data.
- Reporting seller income to HMRC. In the UK, there are plans to make digital marketplaces report sellers' incomes to HMRC as early as 2023.
Staying on top of your legal responsibilities and reporting deadlines is crucial. At detected, we accept unstructured seller data in any form and turn it into a clean, de-duplicated and error-free seller database.
What’s more, you only need to do this once to have dynamically updated seller data for life via our web application or API. So you can rest assured that you’ll always be audit-ready.
2. Seller onboarding and business efficiency
The seller onboarding experience should be as smooth as possible. Many marketplaces fear that enriching data collection and seller verification will slow the onboarding process, create inefficiencies and, ultimately, put off sellers.
But with the right technology, the opposite can be true; marketplaces can save valuable resources and attract higher quality sellers.
Gathering extra intelligence doesn't mean more manual steps anymore. At detected, our ID verification technology is the same as used by banks - it’s robust yet fast. And our automated solution means your seller database is constantly refreshed and fully populated - it takes just one step to achieve lifetime management of a seller.
3. Buyer trust in sellers
Trusting relationships between buyers and sellers can be difficult to build and maintain for marketplaces. This is evidenced in the statistics:
- Lack of trust. 40% of surveyed UK consumers said that their trust in brands had declined over the past three years.
- Fake reviews. This is a common and growing problem for marketplaces, which contributes to a lack of consumer confidence. However, there are plans to crack down on this, making fake reviews unlawful and harder for sellers to get away with.
- Buyers are being scammed and deceived. One in five marketplace listings shows signs of fraud, according to an analysis by Besedo. And a quarter of UK consumers have accidentally bought a counterfeit product online in the last 12 months.
Seller verification is the key to unlocking and restoring trust. The transparency of seller data and a detected verified badge on seller listings helps buyers purchase from marketplaces with confidence.
4. Increase conversion and boost revenue
While a lack of buyer trust can harm business and decrease revenue for marketplaces, the opposite is true when you have a clear sign of trust. A massive 98% of consumers surveyed would be more likely to buy from a business online if they knew more about them.
Our research shows that displaying seller credentials at the point of sale boosts buyer confidence and can help increase conversion rates.
Repeated positive buyer experiences with high-quality sellers improve the reputation of a marketplace. This leads to increased word-of-mouth referrals which, over time, attracts new buyers and drives more revenue through the platform.
5. Scaling and international growth
The ability to scale quickly is vital for growing marketplaces. But operating a marketplace with global sellers and expanding across borders comes with its complexities and challenges.
Robust seller verification in each region will ensure local compliance and maintain quality control globally. The key for marketplaces is to use a seller management system that standardises data and can verify business information worldwide.
At detected, we provide marketplaces with access to over 250 million businesses in over 160 countries. In addition, sellers can be automatically verified at the point of onboarding or retrospectively updated if you’re already operating in the market.
Will seller data become your competitive advantage?
Tackling seller verification can seem like a daunting task. But in reality, an intelligent solution can turn this data headache into an opportunity for marketplaces to gain a competitive advantage.
For growing marketplaces with big ambitions, seller verification can’t be ignored.