Creatives, traders and innovators: Which online marketplace seller are you?
Britain?s growing army of online marketplace sellers, trading on?platforms like eBay and Amazon, brought ?11bn to the UK economy in 2016, with this figure predicted to double by 2020. However, there are crucial differences in size?and strategy between these digital entrepreneurs. A new report from supply chain standards group GS1 UK has?analysed each different type of?online marketplace seller, from those gradually?turning a hobby into a business to large omnichannel?companies using platforms to establish new international audiences. Almost three-quarters were typically small business owners and sole traders who fell into the ?creative? or ?trader? categories. The two groups, representing 250,000 sellers overall, had approximate turnover of ?70,000 and contributed ?17bn to the UK economy each year. Further up the scale were ?growers? and ?innovators?, who represented respective shares of 26 per cent and 14 per cent and are generally considered medium-sized firms, while ?pioneers? and ?leaders? were large businesses seeking additional sales avenues.
The six types of online marketplace seller
The group of entrepreneurs new to marketplace selling. Creatives have usually started to turn a hobby or passion into a business, and operate on a manual sale-by-sale strategy focused on a single platform. Their products are typically handmade or second-hand, and sold out of the home. The business is often a side-project or a second form of income (see ?side hustling?). Creatives could benefit by?strengthening their understanding of regulations and barcoding, and focus on driving more traffic to listings.
The second group are those who have spotted a quick and easy money-making opportunity. Traders usually source lower cost products from overseas at a high volume, and sell them through multiple platforms at once. Brand identity is less of a priority for traders than creatives, who will seek to bulk buy the latest product trends. The best way for traders to grow their business, according to GS1 UK, is to increase efficiency and invest in stock management solutions.
Innovators are the group most dedicated to building a brand. Their company will have started online with a startup culture, targeting niche markets with smaller product ranges. The most successful innovators are able to intergrate sales and product stock updates through multiple channels and drive traffic to their own website.
Growers are the traditional or family-run businesses which have responded to the power of ecommerce by looking to online marketplaces. Platforms like eBay give such firms the chance to test their online strategy. To keep progressing, growers could invest in data collection to better compare online and offline sales.
As experienced veterans of marketplace selling, pioneers are usually happy with their current online strategy. The early adopters typically enjoy stable growth but may also be looking to increase automated processes. The next step for pioneers could be to invest further in marketing and maintaining brand appeal.
The final type of online marketplace seller is the leader ? a large business using different platforms for international growth. Despite the size of the company, marketplaces have proved a convenient and efficient way to sell overseas. As a large business, a bespoke product management system would be central to swift operations. Commenting on the report, Gary Lynch, GS1 UK CEO, said while it was clear a growing number of ?sofa CEOs? in Britain?were using online platforms to establish themselves, it was crucial for sellers to understand the differences in each marketplace?and optimise their offering. ?The opportunity to increase sales and profits on the likes of Amazon, eBay and Google Shopping is readily available but is a continual challenge for online sellers,? he said. ?On the one hand, there are hundreds of online marketplaces offering enormous potential to increase exposure and access new markets. However, each online marketplace is different and each comes with its own unique capabilities. ?Businesses will therefore need to tailor their strategy accordingly to make the most out of each online marketplace and at the same time put in a significant amount of time and hard work to be truly successful.? Take GS1 UK’s ?What kind of online seller are you?? testA global iStreet: Online marketplace sellers are predicted to generate ?21.3bn by 2020
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.
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