International eCommerce, as the name suggests, is the practice of selling products to buyers in foreign countries using eCommerce sites. As the utilization of digital tools and internet availability expands globally, companies can sell their products and services online without any hurdles. Thus, global eCommerce marketplaces are flourishing like never before.
For typical retailers, eCommerce can provide a testing surface to control, regardless of whether they are new to the international markets. This article is for you if you want to develop an eCommerce marketplace. You will then require a few strategies and an eCommerce web development company to create a website for your online global eCommerce business. This will serve as your guide whether you are moving your existing business to the global market or starting a global eCommerce marketplace from scratch. Before we start with the advantages of going international and the steps to follow, let us look at the numbers around global eCommerce.
Global eCommerce Statistics
Following are some global eCommerce statistics for you to be aware of :
As per a survey conducted by eMarketer, the sales of retail eCommerce increased by around 24% from $2.3 trillion in 2016.
Nasdaq‘s research showed that about 95% of buyers are supposed to make online purchases by 2040.
According to a survey conducted by Kinsta, most shoppers from all around the globe choose to make payments using credit cards, debit cards, and digital payment systems.
Advantages of International eCommerce
eCommerce presents various challenges for any business. These involve discovering a suitable market, attracting the faith of the target market, magnifying sales, and maintaining everlasting growth.
Businesses must choose the most reliable and conventional eCommerce platform because it ensures that the entire data is combined for more functional management and decisions. After all, global eCommerce marketplaces can offer many advantages to customers and businesses.
Benefits for Businesses
1. Expanded brand visibility
Setting up your brand in several countries lets more customers become aware of the services you provide all across the globe. It successively increases the visibility of your products and brand as it ultimately expands your sales.
2. Increased customer base
Launching your services into the domestic and international markets expands the brand visibility and magnifies the prospective customer base for your business.
How to Develop an eCommerce Marketplace
Follow the below steps for successful global eCommerce marketplace development:
1. Explore the target market
Market research is the most crucial step, whether you are switching from regular eCommerce to marketplace eCommerce or creating a new one from scratch. As per the CBInsights, “No Market Need” is one of the top reasons more than 40% of startups break down or cannot grow.
Establishing an online marketplace without awareness or thorough knowledge of the target market can be agonizing. You must first know the requirements of the users appropriately, which gives rise to the need for market research. You must be familiar with the target market concept, which includes deep knowledge about users, their requirements, and the solution they expect.
1.1 Assess the market
A thorough understanding of what you are getting into is crucial, especially when you want to establish a business.
1.2 Understand the industry
Exploring the volume and size of the market provides better knowledge about the business model you are looking at. Make sure that the business model you choose makes sense. Capturing the smaller market may sound easy, but if you are planning to charge a selling fee and barely have sufficient transaction volume, you should go for a different business model.
1.3 Define the genres for your target market
The more understanding you have of market segments, the more chances you have to pick a better genre. Several gigantic online marketplaces started from a minor genre. For example, Amazon initially started as an online book store.
Irrespective of the industry you belong to, the competition in the market will always be there. It would help if you found out who your competitors are and know when they started setting foot in the market. When you research your competitors, you will get a chance to explore several business models and market strategies.
1.4 Be attentive to market trends
Research about the fluctuations in the market. If you can recognize the trends, such as changes in customer behavior and technology breakthroughs, you will be able to exploit them for your profit.
1.5 Connect to your users
The marketplace you are building is for the users. Hence, only when you know your users will you be able to meet their requirements and get a solution to their problems more efficiently.
For this, identify your target market, do competitor analysis, list potential customers, and survey them. To do so, answer the below questions:
Who are the users you need to target?
What are their challenges and goals?
From where do they buy, and why do they purchase specific things?
What influences them, and what is their motivation?
Answers to these questions will provide an initial understanding of the type of persona your customers have. As the marketplace you are building is two-sided, you must focus on two types of user groups. Also, your sellers and buyers have different challenges, motivations, and goals. You have to understand both sides.
1.6 Understanding the requirements and finding the solutions
Once you know your target market and the users, you should focus on their needs and how your products can solve their problems.
Try to answer a few questions about your target users. These questions are listed below:
Do your target users do online shopping?
How satisfied are they with online shopping?
What improvements can you make to improve their shopping experience?
Similarly, answer the questions given below to learn about your sellers.
What online marketplaces do they use to sell their products?
What are their pain points?
How can you make their selling experience better?
Answering these questions will aid you in building a better solution for your buyers and sellers. You will be able to know the weaknesses and strengths of your competitors.
2. Select a commission model
As a marketplace owner, the commissions are your prime source of income. According to the commission model, you will get commissions from every vendor for selling the products. Apart from that, there are various methods to monetize the marketplace:
Commission: It has a fixed rate for each transaction. Usually, it depends upon the kind of products sold through your platform.
Listing fee: The model is for the sellers active at a specific time of the year and those selling a part of the catalog.
Subscription: There are a variety of paid plans for sellers and their individual conditions. These comprise monthly revenue, categories, the count of the products, and much more. Vendors get several benefits depending on the plan they choose.
Freemium: For sellers, the flow of revenue gets generated from value-added features and additional services. These include advertising, attractive offers to shoppers, shipping labels, and more.
3. Plan the marketplace operations
Creating a website for online businesses is different from managing the marketplace. It gets complicated for any regular eCommerce business due to the diverse daily issues they have to deal with. But marketplace operations involve two-sided platforms, which makes them even more difficult to handle. Below are some of the challenges you might have to tackle regularly as an owner of the marketplace:
3.1 Managing sellers
Sellers are the foundation for any marketplace, and as a marketplace owner, you have to deal with them, whether you want to acquire new sellers or retain the existing ones by keeping them happy and satisfied.
First of all, you have to convince new prospective sellers to join your platform. It would help if you considered the unique value proposition for doing this. Additionally, you have to design the landing pages for your website to explain to your clients how your marketplace works and why the sellers should join your platform.
Second, you need a signup process for which you should decide the information you need from people signing up. Also, you must design the flow for the registration process. You must choose if you want only specific sellers to register on your website. If so, you should review the registered applicants.
In case you charge subscription fees, you will have to make a proper flow for the payment process or ensure that you have a manual fee collection procedure. Once the user signs up, ensure they can easily see the product catalog or explore the stores.
3.2 Managing products
As a marketplace owner, you need not deal with the products in-store; however, you must create a process to supervise the products. You can organize the product catalogs in two ways, i.e., each product belonging to one seller only, or multiple sellers selling the same product individually. The page layout, your software selection, and how sellers manage their products will depend on your decision regarding the product catalog.
After this, your aim should be to provide a smooth experience when your sellers use your website. You can do so by offering an onboarding service on their existing online marketplaces or importing their products on your platform in bulk. If they are already selling online through other eCommerce marketplaces, allowing them to import the product catalogs.
3.3 Logistics and shipping configuration
Your marketplace online should support sellers to allow them to deal with the inventory. You can choose to ship the products or let the sellers ship them. If you choose to ship the products, you must prepare the inventory, store it, and dispatch it. In such a scenario, you will have to manage each stage, making the logistics more complex.
On the other hand, if your seller ships the product, they will need a way to manage delivery rules conveniently. You can decide the rates, shipping rules, weight, or price-based rules for the products sold.
Also, you need to choose a few more things, including how to handle tracking numbers, whether you need to use third-party tools, and how to set shipping SLAs.
3.4 Order management
For an online eCommerce business, the first step is to get customers to shop through your online marketplace, and the second is to ensure your sellers ship the products on time.
The seller should dispatch the product as soon as they receive a new order. On-time delivery of the products will satisfy the customers and encourage them to revisit your online marketplace. You need to design the website in a way that lets the sellers promptly see and have easy access to the new orders.
Also, it would help if you allowed your sellers to share the tracking details with buyers.
Ultimately, you should be prepared for any situation and have a plan ready to cope with any delays and issues. You can also choose to create some protection programs for sellers and buyers, which include a money-back guarantee or insurance.
3.5 Marketing and content management
Marketing and promotion is the essential part of any online eCommerce marketplace business. It will help if you start working on it in the early stages. You need to figure out how to get new sellers and buyers and retain them. Then, grow your marketplace in the long run through paid and organic marketing campaigns, Search Engine Optimization (SEO), and other initiatives for business development.
To optimize the marketplace for the Search Engine, you need to use SEO-based software. You can consider using eCommerce web development services to make SEO-friendly websites.
This article should serve as the primary guide to developing an eCommerce marketplace. RV Technologies is an eCommerce web development company worth considering. They can help you with eCommerce website development for your online marketplace business. If you are also planning to launch a global ecommerce marketplace for your business, you must have gotten some value from this article.