Amazon, eBay: On Diversifying Sales Channels
The competition in eCommerce is hard as the presence of smaller niche brands becomes overshadowed by big omnipresent marketplaces such as Amazon, eBay, Etsy, Rakuten, etc. How do you compete with such companies which in comparison have superior resources, higher budgets, more employees, and of course, more conversions? It might seem a bit unfair, right?
It might feel easy to give up and suggest that maybe SMBs shouldn’t try to compete at all, and instead consider expanding their listings into these bigger markets. The question is, are these sales channels worth your time and money?
No matter whether you run an online store built on an eCommerce platform, use an open source solution, or have a custom-made cart, by now you will have encountered the immense competition brought in by bigger marketplaces. Established marketplaces like Amazon and eBay are worth considering, as they offer fast access to millions of potential customers and an additional revenue stream. Amazon has more than 300 million active users while eBay’s users number around 170 million. In terms of increasing the visibility of your brand and further business growth, this can be a worthy investment.
The point here is that you don’t necessarily have to compete with big marketplaces — consider implementing these sales channels yourself and add more possibilities for your customers to find you. You can “simply” diversify. There are many pros and cons to using this strategy and it’s completely up to you whether to go for it or not based on your preferences. Here’s a brief infographic to show you some advantages and disadvantages of not / selling on marketplaces.
When all is said and done, our verdict is simply this: between Amazon and eBay, when it comes to marketplaces to sell on, it really depends on what you’re selling and the scale of your operation. It might be very beneficial for established businesses in terms of sales channels diversification, but on the other hand it can seriously hurt small and starting businesses that don’t have that stable infrastructure. Take it or leave it — it’s up to you and you only.
What may work well for one merchant, may not work for another. The key is to test out different models, and then adapt according to the needs and nature of your online company. For example, try listing a few of your best sellers to start, and if this ends up being successful, expand your offering from there. Definitely take local marketplaces into consideration as well, or try a different popular approach which is tried and tested: social media.
To sum things up, we want to leave you with a positive piece of information: independent eCommerce is thriving despite sites such as Amazon thanks to smaller niche brands. There’s a number of reasons for this. For one, SMBs are focused on doing what marketplaces cannot — exclusivity, experience, and personalization — mainly thanks to social media platforms such as Instagram, Pinterest, and Facebook. In contrast to the generic brands found on huge marketplaces, SMBs are more capable of convincing consumers that they offer the best value irrespective of the price. It just goes to show that it’s important to have faith in the discerning tastes of your customers.
