It’s critical for all businesses to diversify their sales and marketing channels. You’re probably tired of hearing about the omnichannel shopping experience, but it really is that important.
One of the most discussed sales avenues is eCommerce. Online sales continue to grow at an incredible rate each year and retailers need to keep up. For some, this means developing and opening an online shop. Adding an eCommerce store to your brick and mortar presence is a great way to boost your brand and sales. But for many, opening an independent online store is too much to start with. Many retailers go to existing online sales platforms to conduct their business.
Of course, Amazon is the most popular option. Amazon’s sales account for about half of all eCommerce sales. Many of those are sales from Amazon itself, but approximately half of its units sold are from third-party sellers. While it’s the world’s most trafficked marketplace, the competition on Amazon is fierce. Additionally, the rules and regulations are strict and small issues can easily lead to suspended accounts (to clarify, this is not a pock mark on Amazon; it simply makes it more risky to rely too heavily on the marketplace).
So, while it may still be advantageous for your retail business to sell through Amazon, it’s imperative that you find other outlets, too. Don’t find yourself vulnerable with only one sales channel. So let’s look at some of the most popular retail marketplace alternatives to Amazon.
While Amazon gets all the attention, Walmart has quietly been growing an impressive eCommerce sector of their brand. Their website receives over 100 million every month and their online sales grew about 40% in 2018 (as a whole, Walmart only grew by 3%). It has a way to go before catching Amazon, but is now the second largest e-tailer in the United States.
You must apply to sell with Walmart and it takes time to get accepted as a seller with Walmart, however. Unlike Amazon, a vast majority of their units sold come directly from Walmart, so they are more wary of inviting in competition.
They don’t charge any listing fees or account subscriptions, but do charge for referral fees of 6-20% upon the sale of any item. The percentage varies based on the category of item.
Walmart’s eCommerce will almost certainly continue to rise. Their online marketplace accounts for just a fraction of its total sales at this point. So it’s worth testing the waters. With an economy the size of Sweden’s and a workforce that would rival the world’s largest army, it’s a hard retail opportunity to ignore.
There are a few hurdles to get over in order to sell on Walmart’s platform, however:
- You must offer free shipping.
- All tax codes must be set up beforehand.
- Competitive pricing is a must – items priced much higher than similar products will be removed.
- There is no in-house fulfillment program; you must handle all shipping labor and costs.
- You must be an established online seller.
Despite its downsides, Walmart is a great option to explore for established eCommerce retailers.
Acquired by Walmart in 2016, Jet continues to operate as a separate entity. Jet’s main goal is to offer its customers the lowest prices available. The larger the purchase, the steeper the discount. Shoppers can also qualify for additional savings by agreeing to final sales, using a debit rather than credit card, and entering personal information/signing up for emails.
The marketplace is largely anonymous for sellers. Shoppers rarely know who they’re buying from. Jet will offer a product if it’s sold directly by them, and if not, will find the best third-party seller based on a number of factors, including price, location, and other items in the shopper’s cart.
Like most eCommerce marketplaces, each seller must first apply. Jet’s acceptance rate is much more friendly than its parent company’s; most U.S. based sellers will be accepted.
Like Walmart, Jet charges a simple, per unit commission. There is some variance with the percentage, but most items are charged a 15% fee.
Jet’s platform offers retailers a huge opportunity. The company is growing fast and estimates that it will surpass $20 billion in revenue in 2020. Even better for retailers, Jet has high average cart values and units per purchase. Plus, consumers are looking for alternatives to Amazon, too. Jet is a popular option for many of those shoppers.
The biggest downside to Jet is that you’ll need a third-party inventory management due to the fact that you must use their API. This can be a substantial extra cost and logistical headache. Additionally, you’ll need to offer very competitive pricing. Jet is known as having some of the cheapest prices online.
Update! An even bigger downside of Jet is that Walmart announced they will be phasing out the eCommerce platform beginning in May 2020. While they may bring it back in the future, they have decided to focus on their own platform going forward. Despite the decision to wind Jet down, Walmart’s CEO, Doug McMillon, credits the $3.3 billion acquisition for helping to “jumpstart” their online sales.
The Newegg marketplace is known primarily for their electronics, including gaming equipment and computers. It’s a catalog-based market, helping to keep its prices low. Newegg was actually founded in 2000, so it’s been around longer than most other online stores. But that doesn’t mean it’s antiquated; Newegg has adapted to changes in web retail and continues to be a major sales platform. Newegg lists over 10 million products and has a presence in 50 countries.
Again, retailers must apply to sell on Newegg. Once you’re accepted, you have total authority over your catalog. Sellers can upload as many products as they like.
The biggest positive of selling on Newegg is that retailers don’t need to worry about order fulfillment. They have five fulfillment warehouses in the U.S. Sellers simply send a quantity of their product to the fulfillment centers and they take it from there.
Newegg takes 10% for most products and pays its sellers each week, keeping it simple and straightforward.
Fruugo is a European-based online marketplace that now sells globally to over a million customers. Started in 2008, Fruugo has expanded their catalog and their reach, launching a business-to-business marketplace in 2015.
Fruugo is still relatively new but growing steadily. It’s an exciting online opportunity for retailers because there is less competition than many other platforms. Fruugo also reaches a wide audience: products are sold in 23 countries and payment accepted in 11 different currencies.
To sell on Fruugo, start by completing the registration form. The approval/rejection will typically come within 5 business days. Integrating product data is easier with Fruugo than with most other online markets. They integrate with popular eCommerce platforms, such as Magento, Shopify, and WooCommerce. Just make sure that your retail point of sale also integrates with whichever platform you use!
Commission on sales is set at 15% with an additional value-added tax (VAT) on all applicable transactions. There are no monthly subscription fees and you will only be charged for products that are sold, making it a low-risk venture to explore.
To sell with Fruugo, you must ship internationally and must work with one of their platform integrations (or update product information manually, which is far too time-consuming for most retailers). Fruugo also has an extensive list of products that it will not allow to be sold on their marketplace. They also do not operate in several large international markets, including all of South America, Africa (aside from South Africa), and Asia (aside from Russia).
Rakuten may not be on everyone’s radar in the U.S., but it should be. The global web marketplace is open in 29 countries and boasts over 100 million shoppers. It was founded in 1997 in Japan, and continues to be the largest eCommerce website in the country. They have made great efforts to expand globally over the past decade, with 15,000 employees and nearly 50,000 online sellers/shops. And like Amazon, they’ve expanded into various other businesses including internet services, banking, credit, and video streaming.
Rakuten attracts small sellers and local businesses with a simple platform and few restrictions, much like Etsy. But it’s much much bigger, and only expanding. Rakuten also offers more advanced customization for its sellers. Each business is able to design their store with unique features, layout, and structure. You can choose your own photos, deals, and design, making the shopping experience feel more personal. This gives online retailers the opportunity to build stronger brand identity and relate to their customers on a deeper level. Indeed, Rakuten adheres to the Japanese concept of “omotenashi,” which is behind the culture’s high level of service. In sum, they want to mimic the in-store experience that brick and mortar provides.
Rakuten expanded to the American market in 2010 when they purchased Buy.com. They even changed the official language of the company to English in an effort to appeal to a broader international market.
Setting up a shop on Rakuten is incredibly easy. But this doesn’t come without drawbacks. The freedom allowed on the platform has led to numerous scams. Though they constitute the vast minority of sellers, scammers can easily ruin it for everyone else, leaving behind a smaller, cynical customer base.
For now, watch for opportunities on Rakuten. They are working hard to improve security and trust in their marketplace. Set yourself up so that when the time comes you’re ready to expand to this dynamic eCommerce market. When it comes to online trends it’s always important to prepare ahead of time so you never find yourself behind the curve.
To learn more about how your business can expand into the eCommerce world, reach out to us at KORONA. Our POS software integrates with many of the largest eCommerce platforms out there, keeping a seamless stream of data between your brick and mortar and online stores. Sign up for a free trial and see how it all works for yourself!