Online marketplaces: Lucrative sales channel including professional marketing measures

Placing an online store on the Internet in such a way that it can be found by potential customers requires a wide range of marketing measures in view of the enormous competition. Smaller retailers are likely to be overwhelmed - both professionally and financially. The big players have so far dominated online retail unchallenged. A clever alternative is to use the highly frequented online marketplaces as an additional sales channel. Online marketing can be booked at the same time.The situation in online retail: dominance of the big playersAmazon, Otto and Zalando - the top 3 online stores in Germany alone accounted for more than 40 percent of total German online sales in 2016: Amazon generated almost 8,123 million euros, Otto 2,743 million euros and Zalando almost 1,122 million euros. Amazon's flexibility is exemplary when it enters the grocery trade and devotes itself intensively to the development of suitable logistics concepts in order to meet the self-fired demands of customers. In the face of this competition, it is becoming increasingly difficult for newcomers and small online retailers to even present themselves to an interesting customer base, let alone generate sufficient sales, and the issue of search engine optimization alone presents small retailers with enormous challenges: If their own store is not displayed on the first page of the results list, the chances of searchers finding their way to the website dwindle. What is needed here are not only modern online stores that meet the high requirements of search engine algorithms in terms of the quality of the web presence, the content presented and the offers, but also professional measures to constantly adapt to the changing criteria, but the bar is also set very high in the analog world: which online retailer can keep up with Amazon's delivery conditions? Shipping via a logistics service provider may still be feasible, but not only does it incur costs, it also comes with an extensive returns policy. It is not for nothing that smaller online retailers are switching to online marketplaces - despite all the associated disadvantages.Realistically assess opportunities: Using online marketplaces intelligentlyThe potential is certainly interesting, even if the marketplaces incur costs: Amazon charges around 15 percent, AllYouNeed and eBay around ten percent and Rakuten five to ten percent of sales for the use of IT infrastructure and logistics. Of course, the respective guidelines of the operators make it more difficult to act independently, especially as violations can result in sanctions ranging from a reduction in visibility to expulsion. But the bottom line is the bottom line - and the obstacles are offset by a whole range of advantages: - Start-up capitalFirst and foremost, the savings on investments must be taken into account, as the creation of a high-quality online store, including billing and logistics, requires a lot of start-up capital and effort. - AcceptanceCustomer behavior should not be underestimated: As relevant studies show, the majority of searchers do not start with Google, but directly with Amazon. Presenting yourself as a retailer on this marketplace, at least in parallel to your own store, can boost your own sales. Over 50 percent of retailers represented on such a marketplace generate more than half of their sales via this channel.- ReachThis is no coincidence, as the large online marketplaces achieve a reach that will remain utopian for many small retailers due to their massive advertising and high customer frequency. This not only benefits online stores that specialize in certain market segments and can thus significantly improve their visibility.Select and use targeted marketing offersHowever, there are a few rules to follow if smaller retailers do not want to cut themselves off from the market with such a commitment. For example, only selected products should be presented on the marketplace in order to receive positive reviews from satisfied customers - and to direct them to your own online store. Own brands are perfect for this, especially as the comparatively higher margin optimally absorbs the costs. Quality should always be the top priority - not only in the product images, which should attract the attention of potential customers, but above all in the product data feeds. These should be comprehensive, up-to-date and attractively compiled in order to provide prospective customers with all relevant data. Investments in these marketing tools, which should be taken for granted, are also rewarded by the search engines: relevance and added value for the customer improve the ranking, as does the combination with suitable keywords.The established online marketplaces also offer professional marketing measures, such as Amazon SEO, which is based on concise company and product descriptions including striking headlines and also includes customer review management as well as many tips and tricks for technical search engine optimization.In the next step, online retailers can use some interesting advertising functions with Amazon Search, such as headline search ads, product targeting or display ads. Retailers reach the pinnacle of possibilities with Amazon Display and the associated use of the Amazon Advertising Platform (AAP). The potential of automated advertising is particularly interesting when retailers serve multiple channels: The sheer volume of data generated makes automation indispensable.Of course, it is important to weigh up the pros and cons of a presence on the major marketplaces: On the one hand, they are geared differently - extensive research in advance is therefore recommended. On the other hand, the big player remains the winner in the end, as the growth figures clearly show. However, viewing this opportunity as an additional sales channel and using it in a targeted manner can definitely help your own store to get ahead.* Marco Englert (MSc, MBA) is a manager, coach and consultant. As Chief Marketing Officer (CMO) and Executive Director at Motodox GmbH, he is responsible for modeling and implementing management strategies. He has excellent research and leadership know-how and is a certified specialist for brand communication, online marketing manager, digital sales manager, employer brand manager and manager for agile organizational development (Quadriga University).** Prof. Dr. Anabel Ternès is the founder of several tech companies and is committed to future orientation and digital competence. As Managing Director, she heads the Institute for Sustainable Management (IISM), is a mentor, speaker, expert and author on digitalization and holds a professorship in e-business. Anabel Ternès has many years of management experience in marketing and business development at international companies.