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The Crucial Role of Marketplaces In eCommerce

Rohit Khatri

Gone are the days when entrepreneurs needed to break a sweat about acquiring a customer base, establishing a reliable distribution network, or financing options for their customer. Marketplaces have allowed them to focus singularly on developing great products, while they take care of the rest. 

What does an eCommerce marketplace do?

Provide a solid & sustainable customer base

Even a few years ago, it would be impossible to become a 100cr brand without significant investments in marketing and brand building. Today, a sizable proportion of brands are choosing to sell exclusively on marketplaces instead of going D2C. These brands are achieving the 10cr milestone in 2-3 years, whereas the norm was close to 10-15 years(Source). Marketplaces provide startups with a steady flow of customers. Moreover, entrepreneurs can tap into the existing trust these customers have on the marketplace and leverage that for their own brand. 

Reliable Logistics & Supply Chain Solution:

Services like ‘Fulfilled by Amazon’ allow businesses to ship their products to customers in a timely and safe manner without a massive spend on constructing a supply chain. They’re even able to offer one-day deliveries, superior customer support, and easy returns which go a long way in augmenting the customer experience. Entrepreneurs no longer need to worry about warehousing, delivery, transport and other logistics. They can simply plug their products into the already established supply chain network of the marketplace. 

Robust Financing Options:

The sheer largesse of these marketplaces allow them to form partnerships with financial entities and offer benefits like no-cost EMIs, Buy-now-pay-later schemes, and credit-card specific discounts. While these associations are created by marketplaces, the benefit is passed on to the sellers who get access to a larger customer base. 

Access to cutting-edge technology:

Marketplaces have the headroom to invest heavily in technology, and the benefits often get passed to the sellers on the platform. From complex product recommendation engines to 3D try-on of apparel and eyewear, to seamless payment gateways - these innovations contribute significantly to the customer experience. 

Effective CRM:

eCommerce relies more heavily on customer relationship management (CRM) than any other business model. These platforms need positive reviews and feedback. They also need to be able to provide 24*7 customer support and flexible payment options. Marketplaces are as invested as businesses in maintaining a positive CRM, and they allow businesses to use the same architecture, saving a chunk of costs for the brand. 

Greater time for product enhancement:

Having been provided with a reliable customer base, credible supply chain network, warehousing options, end-to-end CRM facilities and more, the business owners have more time to focus on improving their product. Furthermore, most marketplaces provide businesses with a platform to genuinely make their products stand out through innovative digital marketing and advertising. Businesses can also use customer behaviour data and metrics to analyze where they need to improve. 

Increased accessibility for smaller brands:

Marketplaces have also made it more accessible for sellers to transition to an online avenue. They have worked hard to make the process smooth and quick for brands looking to make their mark as industry-leading e-commerce brands. Furthermore, the presence of roll-up e-commerce businesses like UpScalio has also enabled smaller brands to gain traction and feature on top online search pages. Their help comes in the form of capital, but more importantly - a dedicated team of e-commerce experts who have the know-how to build and grow online brands that perform successfully on these marketplaces.

Businesses constantly need to experiment, and marketplaces enable that in a low-cost manner. They are encouraging product innovation by taking a massive load of customer acquisition and logistics off the entrepreneur. Entrepreneurs can now realize their dreams with considerably fewer steps and start generating profitable revenue as soon as possible. 

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