There are many pitfalls when it comes to starting your ecommerce business. Don’t get me wrong- it’s a rewarding and important endeavor, and one of the best ways to make money during the online shopping boom caused by the Covid 19 pandemic, but that doesn’t mean there aren’t crucial mistakes you could potentially make which can hamstring your growth and profits. Some of these mistakes are pretty obvious and self-explanatory, but some are trickier than you might expect. Read on to discover how to avoid some of the biggest online marketplace problems so you can make sure your business is healthy and profitable for years to come.
First, there’s a difference between online marketplace selling and selling on your own dedicated ecommerce storefront. When you sell on marketplaces, you’re expecting to be paired with potential buyers alongside many other merchants selling a variety of products. The rate marketplace partners charge for each transaction can vary, but referral fees often hover between 8 and 15%. The biggest marketplace might provide you with the most potential customers, but they’ll also likely be in a position to charge you a higher finder’s fee. Choosing the wrong marketplace to sell online can eat up more of your profits than you might expect. There’s many pros and cons to a multi-vendor vs. a single-vendor approach which are outside of the scope of this article, but keep the difference in the back of your mind anyway.
And now the part you’re here to see. Here are seven of the biggest mistakes you can make while selling on a multi-vendor platform.
First is not doing your market research. You may have a fantastic product idea, but if you don’t know who’s going to buy it or when, you’re really shooting yourself in the foot. Statistics show 90 percent of startups fail in their first year, and the CB Insights data claims the top reason is that there’s no market need for the goods or services they’re providing. It’s important to narrow down your veritable market potential to make sure you’re even able to meet the demands of the people around you.
The second sin is starting without launching a minimum viable product, or MVP. This acts as your proof of concept to show your products are needed and will sell in the real world. It’s essentially a confirmation of what your market research has told you.
Thirdly, trying to secretly fix mistakes instead of taking accountability will erode your credibility and your customers’ trust. The people invested in the success of your business know full well you’re not infallible. It’s normal for any corporation to make mistakes from time to time. If a product is late, or unexpectedly out of stock, or you accidentally send the wrong thing, all that’s required is an apology and a commitment to doing better.
The fourth sin is trying to grow too big too fast. When it comes to selling online marketplace partners can make fulfillment easier, but it’s still no good if you have to pay extra fees for the storage of products you just aren’t selling very many of yet. As an example, many online marketplace companies, such as Amazon, have a self-fulfillment option that ups convenience but costs a bit of extra money. It makes more sense to start small and grow slowly over time than to put everything you possibly can out all at once.
And last but not least, one of the biggest mistakes you can make is starting without expecting to be in for the long haul. Starting any kind of business is difficult, and takes up more of your time than you might expect, especially at first. Although many things get easier as you keep doing them, you shouldn’t be looking for easy exits. Luckily, P2Pseller has your back. By leveraging the power of the shared economy, we want to help you take as many things off your plate as possible so you can focus on the parts of your business that really get you excited.