Indirect selling or third party online marketplaces, such as eBay, can be a great way to broaden your reach, trial new products, and test different regions with lower costs compared to setting up a new storefront.
Groupon, eBay, Etsy and Zazzle are just a few examples of third party websites being used by Australian retailers to maximise the digital space.
Some benefits:
- Relatively easy to setup and manage
- Pre-existing traffic on the site
- Ideal for testing new products, regions and demographics
- Ideal for clearing sale or discounted items
- Potential for international exposure
- Requires less staffing than bricks-n-mortar storefront
- Technology & specific software tools are widely available
- Niche retailers that master the ranking system can do especially well
Some risks:
- Online branded shops require more extensive setup and maintenance
- Consumers can easily compare prices and deals with competitors
- You need a robust logistics or drop-shipping process in place
- Your margin needs to factor in shipping & handling costs
- Fees are usually percentage of sale value rather than a flat fee, and can be applicable at multiple stages of the sale (eg. eBay, PayPal)
- Feedback from every single sale is visible and comment moderation is limited
- Lack of control over the interface and its policies
Ready to try indirect selling but not sure where to begin?
Things to consider when setting up an indirect selling strategy:
- Does the website or online marketplace have a good reputation?
- Is there where my customers are already shopping for similar goods?
- Are my main competitors here too?
- Is my product something people like to buy online?
- How labour intensive is the set up process?
- What fees do they charge?
To learn more about indirect selling visit the NRA Digital Business Kit for Retailers here.