Marketplaces, the popular ones, are fiercely competitive. For a certain product, the seller faces competition on price and on mind-share. The sheer volume of similar products in marketplaces makes it tough for a seller to stand out. Feedback quality or reputation is the weapon that allows success in a search led marketplace, but it takes time for a reputation score to build up.
Here are three strategies a seller can speed up their growth…
1. Narrow focus on fewer product, buy in volumes
A seller could focus on a very narrow set of products – probably not more than 2 or 3 product categories. With focus, the seller will also need to take a big bet and acquire large amounts of inventory. Buying large quantities will ensure that they get cheaper prices from suppliers and they can afford to keep their selling prices low. Many times, large orders allow the buyer the flexibility to improve the quality on the products as well (especially if the suppliers are from China).
This option comes with the obvious risk of locking up large amounts of capital in inventory.
2. Spread yourself thin with a large number of products
When you start selling in a particular category, the orders usually trickle in slowly early on. One way to grow fast is to enter a very large number of categories. Many sellers try this route – it is not uncommon for sellers to boast of 800-900 listings. The hope is that a small amount of each product sell per week and the large range makes up a decent sales volume.
With some smart sourcing deals, especially if you have local suppliers, could reduce the need to maintain a large inventory. That said, this strategy is very operations intensive. One has to maintain relationships with many suppliers, negotiate costs much more, more invoices, more payment, more phone calls etc.
3. Sell on multiple channels or “multi-channel e-commerce”
How about keeping the product range narrow and not order very heavy volumes, but be present in all the marketplaces that are relevant in India.
The challenge here is that your operations get split. Downloading orders, printing labels and other activities on most marketplace systems is a pain. If this has to be done three times over on different websites, it could take the wind out of your staff. Luckily, some upcoming technology solutions in the market will help resolve these problems in the times to come.