Let’s face it, no retailer’s marketplace will be able to compete with Amazon (or Walmart) when it comes to general assortment size. It’s also very difficult to compete in terms of shipping costs, membership perks, and delivery speed. So what other value prop can retailers who are considering opening a marketplace offer their consumers?
The biggest value non-Amazon marketplaces offer is a broad collection of unique, hard to find, or handmade items like custom jewelry or vintage clothing. That’s why marketplaces work best for retailers with product categories that require access to longtail items. It’s also good for retailers who operate in a very niche market, allowing them to gather a unique group of sellers.
Otherwise we suggest drop shipping.
Drop shipping allows retailers to achieve the one thing Amazon is unable to really offer: curation. In other words, with drop shipping, retailers are able to create a unique customer experience customized to their own brand. That means the ability to set prices, control assortments, maintain product display and description standards, customize packing slips, control shipping, and create high-quality customer service experiences.
So it’s not really a question of drop shipping vs marketplace, but rather which strategy fits closer to the value proposition of your brand.
And if that strategy is drop shipping, you know who to call! 😉
PS: As for whether suppliers and brands should focus on selling on marketplaces or their own ecommerce sites, that’s a complicated question. Take a look at this post that outlines the benefits and drawbacks of marketplace selling for brands.