Why you should stop selling on marketplaces
Many small businesses have realized the potential of online selling, and have chosen to sell their products on others website/marketplaces or even via their social media page but many experts have realized “These marketplaces can be harmful over time for the sellers“!!
Below are few reasons, why you should stop selling on marketplaces:
1) Overcrowded with sellers, impact on sales – Multiple sellers are selling similar products like yours. Since customer is getting lot of options, low chances to order from you. There may be quality difference between low cost products offered by other sellers and your products but not all customers aware about this. Most of the times customers get cheated with low quality products but at the end, your sales has been affected.
2) Low margin – Since same products are being offered by multiple sellers, to improve your sales performance and to beat the competition, you need to down your price.
For example, if any seller have branded products by price range Rs 1500 – Rs 2000, but other sellers is selling similar product (may be with low quality) below Rs 1200. Who will get more sales? No one will know about your quality until unless they buy your product. To increase sales, sellers will be forced to down his price.
3) No repeat sales, no customer loyalty – In marketplaces, customers never loyal to any particular seller, they are loyal to marketplace. For example, if any customer bought LED TV from seller X and next time if he wanted to upgrade product or wanted to buy any other electronic item, he will visit same marketplace and search for options. No seller and customer contact.
4) Market places launch own brands – Not everyone know this, once marketplaces start getting good traffic, based on demand they (marketplaces) create list of best performing products and directly source products in bulk from market and sale by own brand name. You must understand, if any marketplace has launched own brand, whom product will be visible in top when customer search for that and who will get increase in sales.
5) No long term vision – Your sales performance on marketplaces is based on your recent performance in orders. There are many factors to take in to consideration when it comes to your seller performance, such as order cancellations, returns, customer rating, etc. Along with competitive price if you have good feedback and reviews, your products will be promoted in top of the search list but assume if you have received any negative feedback? By the time when you will get multiple sales, few customers will be happy and few may not be happy. Few will be leaving positive feedback and few may be leaving negative feedback. If you have negative feedback, your sales will affect and sales will down and after couple of weeks, you will not get any new sales.
6) Marketplaces policies – If you are selling on marketplaces, you have to obey marketplaces policies. Marketplaces force sellers to follow their promotion policy, sales policy, order cancellation policy, returns policy, or refund policy. If customer is not satisfied with product, seller has to afford product return transit cost. Marketplaces may increase their commission any time.
I would request all sellers to share their experience in comment.