|Thu Sept 8 2011 10:02:09|
Best Buy Opens Marketplace to Third-Party Sellers
By: Ina Steiner
Yet another chain-store retailer has launched a marketplace open to third-party sellers - this time, Best Buy. Sears and Walmart.com also allow third-party sellers to list on their sites. Retailers are looking for ways to monetize traffic to their websites, though the verdict is still out on how successful traditional retailers have been in opening up their sites to third-party sellers.
Five of Best Buy's suppliers represent 39% of total merchandise it purchases - Apple, Samsung, Sony, Hewlett-Packard and Toshiba. And Best Buy's 20 largest suppliers account for just under 65% of the merchandise it purchased in 2011. With its new Marketplaces, Best Buy said it would be able to add one-third more products to its offerings.
The company also operates a global sourcing office in China in order to design, develop, test and contract manufacture its own line of exclusive brand products from factories in Asia.
Best Buy was clear to say in its announcement that third-party sellers would not be offering products that compete with its own catalog, so that "consumers won't have to spend time sorting through redundant products or comparing prices from multiple websites."
Best Buy indicated it would be picky in choosing "trusted" partners, saying it would evaluate new sellers against a set of standards including their tenure in business, overall customer satisfaction, order cancellation history and back-order history.
Third-party sellers have embraced the multi-channel approach in an effort to increase sales. It's a complex task, and sellers use inventory-management tools to help them get on many marketplaces and comparison shopping engines, and they use repricing software to optimize pricing across multiple channels.
One of Best Buy's new sellers is also a third-party marketplace itself. Buy.com, which sells on marketplaces such as eBay, has its own website where it allows third-party sellers to list items alongside its own drop-ship catalog.
Best Buy said it would differentiate listings from third-party sellers from its own inventory:
"Items fulfilled by Best Buy Marketplace sellers are clearly noted and customers purchasing from BestBuy.com will still enjoy a seamless shopping experience, maintaining the same single shopping cart and simplified checkout process. The Best Buy Marketplace seller handles shipment and returns, but Best Buy Marketplace also offers a Marketplace Guarantee to ensure customer satisfaction with every purchase experience."
Items purchased from Marketplace sellers will also earn Best Buy Reward Zone points for buyers, though items from third-party sellers will not be available for in-store pickup.
Retailers like Best Buy are looking for ways to grow their ecommerce initiatives. Borders' bankruptcy is evidence that big box chains need to grow online sales and take a hard look at their store operations.
Best Buy plans to open approximately 150 Best Buy Mobile small-format stand-alone stores in the U.S. in fiscal 2012. It operated 177 Best Buy Mobile Stores in the U.S. at the end of fiscal 2011, up 139% from 2010, and up 366% from two years ago. In contrast, it grew its big-box stores 2.8% to 1,099 Best Buy stores in the U.S. in 2011.