As a seller, your website or ecommerce webstore can bring you a good amount of traffic and sales. It offers a great way to attract new customers and increase the reach of your products and brand. However a small company typically may not have the resources to create a comprehensive website, set up a payment gateway, or invest on online marketing efforts. Even an existing seller could face a roadblock when it comes to increasing reach, as online marketing spends become progressively higher. This is where alliances or relationships with online marketplaces can help.
Strategic alliances or relationships with online marketplaces are very effective for increasing reach. An online marketplace is a type of e-commerce website where product and inventory information is provided by multiple third parties, and the transactions are processed by the marketplace operator. The product offered could be a physical product, such as clothing, furniture, books, or electronics. Or it could even be an intangible product, such as an online training course, downloadable game, or streaming video.
The marketplace processes consumer transactions and the participating retailers or wholesalers fulfill and deliver the products and services; thus, the online marketplace or site is really the middle-man. Some marketplaces may also handle order fulfilment and delivery management services, for which they typically charge a premium. Because marketplaces offer products from many providers, they offer a wider selection and more competitive prices than those offered by the e-commerce sites of individual businesses.
For a small manufacturer that does not have a large enough brand to attract brick-and-mortar retailers and does not have sufficient money to gain and manage a critical mass of visits on its own website, partnering with an online marketplace makes perfect sense. It helps the manufacturer save the costs involved in online marketing and enhancing customer experience. For the online marketplace, it means an additional product or brand available for its customers to choose from, thus becoming a win-win relationship for the marketplace operator and the small manufacturer.
These companies benefit by paying a small percentage of their revenue to the marketplace operator who can provide those services. Since the marketplace operator typically has multiple—sometimes thousands of associated parties promoting their products on the website, it is cost effective and scalable. These online marketplaces are often the primary destination people choose to purchase a particular product. If you’re looking to increase reach, marketplaces offer you a quick and easy access to new markets.
Small publications and authors often use the online marketplace (companies such as Amazon) to sell their books. These small publications do not have the resources to reach a global audience on their own. Thus, strategic partnerships with online booksellers or websites that have a huge reach will help them promote their books effectively.
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