The Growing Power of Marketplaces for Online Retailers

Online marketplaces, big and small, are thriving. In fact, retailers plan to spend 32 percent more to sell their products in online marketplaces in 2016.

Think of marketplaces as an online “mall.” Instead of paying rent for a physical space in a brick and mortar building, you are paying a percentage of your sales for a virtual space on a website. And that virtual space can widely expand your customer base.

Amazon is the top e-retailer in the United States – with over 294 million active customer accounts all over the globe. Looking at Amazon’s third quarter in 2015, their net sales rose 23 percent from 2014 and their sales in North America alone rose 28 percent totaling over $15 billion.

eBay has also experienced its own growth in both their active user base – 21 percent in 2014 – and year-over-year revenue growth of 12 percent resulting in just under $18 billion in sales worldwide.

Because online marketplaces are so popular and valuable, even Walmart is breaking into the scene with their own offering. Walmart Marketplace – in direct competition with Amazon and eBay – is allowing certain retailers to sell extra products through their website, which adds almost one million new items to its catalog.

Online marketplaces are expected to continue their growth, which is good news for all retailers – even those of you with your own online store – because you can leverage the popularity of these marketplaces to reach more shoppers. But how can you do this?

You can take advantage of their high website traffic.

Last year, Amazon had over 190 million monthly visitors to its sites. Additionally, sellers have reported an average increase in sales of 50 percent once they’ve joined the Amazon Marketplace. eBay is also gaining ground, with over 98 million monthly visitors as of August 2015.

By featuring your products on these marketplaces, you are able to capitalize on the higher traffic without additional work on your end. This is an easy and effective way to get more views and purchases of your products.

You can reach new, global audiences.

An online store already allows you to reach customers in other states, countries and continents, providing a truly global experience. Featuring your products in marketplaces can only extend this presence, allowing you to reach specific sets of global customers that may be less familiar with your brand, but are comfortable shopping in a well-known marketplace.

You can improve brand recognition.

A customer on an online marketplace may never have heard of your store. But they may be searching for a particular product that you happen to sell and then discover your brand. Once a customer purchases one of your products through an online marketplace, they’re more likely to seek out and shop at your store again as long as you have good products, quick fulfillment and great service.

You can use it to test selling online.

If you currently have an online store and want to expand your business, an online marketplace is a great way to do this. Not only will you reach new audiences, but the time, effort and resources it takes to get set up on many third party marketplaces is minimal, meaning an efficient new revenue stream. Volusion even has integrations with Amazon and eBay that make it easy to connect your store with these markets to drive growth.

If you are new to selling online, a marketplace can be a great way to test the waters and see if your business is a profitable venture before investing your time and resources. However, a unique website offers an invaluable element to your online store and brand that can build customer loyalty and drive revenue. The final choice will ultimately depend on your business, but keep in mind that both marketplaces and company storefronts are important for online success.

Now that we have an idea about the benefits of online marketplaces, let’s look at some of the most popular and up-and-coming options that you can leverage for your business.

  • Amazon: As mentioned above, Amazon is the top e-retailer in the United States. In addition to being extremely well-known and having a huge customer base, Amazon also makes it easy for third-party sellers to join their marketplace by providing helpful tools like Fulfillment by Amazon, which allows you to ship your inventory to Amazon so they can handle the shipping for you.
  • eBay: eBay used to be an auction site, but it’s now taking on Amazon as a full-fledged online marketplace that makes it easy to feature your brand and sell your products. Unlike Amazon, it doesn’t own goods or serve as a direct competitor to the retailers selling on its site. Instead, its goal is to be a partner to retailers and brands which shows in the features available.
  • Rakuten: Rakuten is the largest e-retailer in Japan. It launched its U.S. brand in 2013 and has expanded worldwide to offer over 90 million products from 38,500 global sellers. In 2012, Rakuten’s revenue sales totaled $4.6 billion, indicating its marketplace rank is on the rise.
  • Newegg: Newegg has over 10.5 million products in its marketplace. Although Newegg focuses on selling computer hardware and software, their marketplace launched in 2010, which resulted in $2.5 billion in revenue sales that year.
  • Sears: Sears, a typical brick and mortar store, has gotten in the marketplace game as well. Statistics from 2014 reveal that Sears gets about 2.4 billion page views each year and has well over 10,000 sellers in its marketplace targeting their customer base.
  • Houzz: Houzz exclusively sells all sorts of home products, so if your business specializes in this area, you’ll want to take advantage of their highly targeted audience of over 35 million monthly visitors.
  •’s online marketplace allows its over 3 million customers to shop from over 2,000 merchants, generating more than $3.8 billion in sales annually.
As you can see, there are numerous opportunities available for both you and your business in online marketplaces. Because the risk to enter these channels is generally low and can yield fantastic results, it’s definitely worth trying out to expose your business to a wider audience and higher sales.

What are your favorite online marketplaces? Tell us in the comments below!