The quickest way to increase sales is often to meet your potential customers where they are. And right now, online marketplaces are gaining tremendous momentum. Consumers flock to marketplaces like Amazon, Alibaba, eBay, Walmart, and Rakuten. Brands who are not present on these sites risk leaving substantial profits on the table.
Selling your products on marketplaces can help grow your brand fast. There are great opportunities in doing so, but expanding through online marketplaces also comes with complexities.

In this article, we’ll look at the pros and cons of selling on marketplaces and give you some valuable pointers on this topic.

Related reading: Digital Commerce Business Models – The Current Landscape

What is an Online Marketplace?

Marketplaces present an important revenue opportunity for ecommerce brands. By connecting you to buyers that would not have otherwise encountered your brand, marketplaces can open the door to new audiences and markets. But before we dive into the dos and don’ts of selling on marketplaces, let’s define what we mean by this term.

Ecommerce Marketplaces are digital shopping platforms, kind of like virtual shopping malls, that connect sellers and buyers. The companies operating the marketplaces, such as Amazon or eBay, are not selling the products. The products are sold by independent brands, who in turn don’t have to deal with any of the ecommerce platforms and logistics.

What are the Top Online Marketplaces?

When you think of online marketplaces, Amazon, eBay, and Ali Express are usually the ones that come to mind. But there are actually close to 150-200 significant online marketplaces around the world. So if you are only aware of or using some of them, it could be time to expand

Below we list some of the largest ones, but there are many, many more:

  • Amazon
  • Etsy
  • eBay
  • Facebook Marketplace
  • Wish
  • Newegg
  • Rakuten
  • Walmart
  • Target
  • Zola
  • Houzz
  • Wayfair
  • Sears
  • Fruugo

You will not be able to be everywhere, so you’ll need to decide which marketplaces are the best fit for your brand. This will depend on your business and factors such as fees, requirements, and top categories.

Once you know where to start, you can slowly move on to include more and more marketplaces – and reach a growing number of people. It may seem daunting at first, but once you get some momentum and start seeing the potential of selling on marketplaces, you won’t look back.

Selling on Marketplaces as Part of an Omnichannel Strategy

If you’re an omnichannel brand, you want to be available in every channel your customers use. This is why an omnichannel strategy often includes expanding through online marketplaces – since that’s where a significant portion of today’s consumers hang out and look for products. In 2020, almost 62% of ecommerce online sales happened on online marketplaces, which shows how popular they are.

Selling on Marketplaces – an Untapped Revenue Channel For Ecommerce Brands

Marketplaces currently command 40% of the growth in the D2C sales market and are growing rapidly in the B2B space with an expected drastic shift in the next few years. The advantages of online marketplaces are constantly increasing, and platforms and tools that support marketplace capabilities are getting easier to use and implement. The ability to evaluate ecommerce strategies, like pricing and AI, can be tested against your own experience or scaled to the width of the marketplace while your site plays a more brand-focused role.

Related reading: Reimagining the B2B Buying Experience


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Benefits of Selling On Marketplaces

The benefits of joining a marketplace are many, and the barriers to entry have gotten quite low based on the state of marketplace technologies. Below we list some of the benefits:

A New Source of Revenue

Aside from being a new source of revenue with turnkey time to market, marketplace electors get the ability to take advantage of cutting-edge fintech, martech, and user experience while advancing immediately and having a 24/7 presence.

A Built-In Audience

Online marketplaces come with a built-in audience, which means you need to spend less money and time driving traffic. Listing your products on eBay, for example, connects you to a customer base of 187 million people. Walmart has around 410.5 million monthly visits, and Amazon has more than 2.4 billion visits every month.

A Quick Way To Expand Globally

Online marketplaces allow you to expand globally with minimal effort. You immediately reach an international audience without having to navigate complicated compliance, payment solutions, and security strategies. With an online marketplace, you access cutting-edge infrastructure, performance, and tools without large investments.

Related reading: 5 Things to Plan for in Global Ecommerce Development

A Trusted and Predictable Customer Experience

A key benefit of online marketplaces is trust. Buyers know exactly what to expect, what the rating system consists of, and that the pricing will be competitive and the shipping and return process frictionless. Even if your main channel has all of those attributes, getting that across to a new user can be a challenge. On marketplaces, buyers can compare your products side by side to others and make informed decisions based on cost, quality, ratings, and options.

Frees Up Your Time and Allows for Testing

Marketplaces free up the supplier from the pains of implementing infrastructure, fintech, payment, supply chain, order management, and security. It’s also a great testing ground for everything from pricing to new product offerings and messaging.

Drawbacks of Selling on Marketplaces

While there are many benefits of selling on marketplaces, there are also some challenges to be aware of.

Less Personalization

When selling through a marketplace, you are very much at the mercy of the marketplace’s processes and interface. The room to personalize the shopping experience in a way that makes your brand stand out from the competition is limited, and this can make differentiation harder.

A Less Branded Buying Experience

When your product is sold on a marketplace, you don’t have the same opportunity to control the narrative and brand the buying experience. When you’re selling on your own site, only imagination limits the ways you can use technology to create unique and immersive shopping experiences. This is much more difficult on an online marketplace.

Less Control Over your Brand

If your brand has a clear story and aesthetic, that will likely be difficult to fully convey in a marketplace. Things like brand values and back story are much easier to communicate on your own site, where you can leverage everything from blogs and landing pages to newsletters and email drips. That said, marketplaces based on value sets are popping up to allow for brand consciousness to be included in the experience. Hive is just one example of a marketplace that curates products that are sourced in a sustainable, socially conscious way. When you elect to list your product in a value-based marketplace you can enjoy the best of both worlds.

Key Takeaways

There is no shortage of online marketplaces for ecommerce brands to leverage, and the potential in doing so is enormous. Selling on marketplaces can help you increase brand awareness, reach new markets, and drive online sales. But expanding globally does take planning and requires you to consider some challenges that the process entails. To sum things up, the benefits of selling on marketplaces include:

  • A new source of revenue
  • A built-in audience
  • A quick way to expand globally
  • A trusted and predictable customer experience
  • Frees up your time and allows for testing

On the other hand, selling on marketplaces does come with some drawbacks, such as:

  • Less personalization
  • A less branded buying experience
  • Less control over your brand

Navigating the different options and taking the first steps can be complicated and feel overwhelming. At Vaimo, we have extensive experience in helping clients all over the world take this step to grow their businesses to the next level.

We’re constantly exploring new strategies to help our clients build new revenue channels to complement and even further their current ones. And as always, the key to getting ahead is getting started. Deciding to start selling your products on marketplaces is one of the quickest ways to see rapid growth. If you start now, you’ll most likely look back in a couple of months and wonder why you didn’t take this step even earlier on.

We’d love to help you get started with selling on marketplaces – get in touch with our team of experts to explore the opportunities.

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At Vaimo we help brands, retailers, and manufacturers all over the world to drive success in digital commerce. Reach out to us if you want to hear more about how we can improve your customer experience strategy, go to market plan or explore how technology can enable success.