Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Tue Sept 15 2020 11:22:14

Retailers Fail at Seller Marketplaces

By: Ina Steiner

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"Retailers continue to launch marketplaces to fix their lacking online presence by offloading the work to third-party sellers; however, those marketplaces never work," according to Marketplace Pulse's Juozas Kaziukenas.

Kaziukenas cited examples including Target, Sears, Newegg, and others, and he delved into one example, Best Buy, which cited customer confusion over marketplace purchases as a reason for closing down its 3P marketplace in 2016.

So what does work for retailers, according to Kaziukenas, particularly in the age of COVID-19? Stores as pick-up and delivery points.

It's interesting to read about retail marketplaces from the point of view of the retailer rather than the seller - check out the full post on Marketplace Pulse. One point Kaziukenas made that both retailers and sellers may be able to relate to:

"Ultimately, in the world of e-commerce dominated by Amazon, the opportunity is not being more like Amazon."

If you've used a retailer's third-party marketplace as a seller (or as a buyer), do you agree with Kaziukenas?

Comments (11) | Leave Comment | Permalink
Readers Comments

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This user has validated their user name. by: Life During Wartime

Tue Sep 15 14:34:18 2020

I only used the WAL-MART marketplace, once.  The item wasn't shipped for 3 weeks, then was destroyed in the shipping process.  I was never contacted by the seller, no replacement was ever sent, and no refund (a small amount of $$$) was issued.  When I read about the loss of the item on the online tracking form, I purchased the same thing on eBay and had it in 5 days.  The price was higher but the turn-around and packing were great.  I never liked WAL-MART, and they lived down to my expectations.

Amazon, eBay and Etsy ALL sell mass manufactured, low end, stuff -- the same stuff, actually.  So it's no advantage for Target, Sears, etc. to imitate what those 3 are doing.  I've never been much of a customer for Big Box retail.  Before there was ecommerce, there were catalogs and FAX machines.

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by: shut1968 This user has validated their user name.

Tue Sep 15 14:41:47 2020

They all failed because none of them knew what they were doing, including Wal-Mart. Wal-Marts failures are due to having a horrible and confusing interface for sellers, not allowing sellers who do less than 500k per year in sales and no used merchandise.

They had the best shot out of all of them because of name recognition and if they ever decide to go full out marketplace and fix the interface that's broken then they could give both Amazon and Ebay a run for their money but until then it's just another failure.

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by: FeelingFroggy This user has validated their user name.

Tue Sep 15 15:09:52 2020

We have never shopped any of those stores in the real world and just can't figure out why we want to shop them on e commerce. Junk in junk no matter what platform it is sold on.

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This user has validated their user name. by: Covid-20

Tue Sep 15 16:27:24 2020

What a coincidence!
Just tried in the past 36 hours to order something for my mom off of Walmart.com.
Everything = out of stock / Don't deliver to your vicinity - third party shippers

Hideous mess. No Thanks.

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by: Snapped This user has validated their user name.

Wed Sep 16 12:17:36 2020

The aggregate third party market (and related Marketplace demographic) are just too diverse and eclectic for branded retailers to ‘manage’ effectively, as long as retailers treat them like simple ‘extensions’ of their back room Web-presence expeditions.

Those large retailers are embedded in an ‘our way to do business’ culture, with a process, procedure, and ‘face’ they present to the consuming public. Plus they control a supply and it’s fulfillment under that shingle. At a cost of course. But you can’t delegate ALL those costs to what amounts to a ‘virtual’ inventory expansion via third party ‘responsibility’.

And those parameters don’t always suit a third party market seller either. Rather, they can handcuff them, and squeeze margins to fiscal insolvency, and all too often, frustrates that market’s buying demographic in the process. Not the one’s that would ‘fit’ necessarily, although there still remains the competition to overcome, but certainly those that would represent a marketplace footprint expansion to the retailer. That goes for both the potentially great symbiotic ‘partnerships’ that could flourish as well as those that need to be weeded as endemically unprofessional through competent eCom experienced management.

So where do the wheels fall off? When the wagon lacks those last four words above.

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This user has validated their user name. by: RKTOYS

Wed Sep 16 17:17:31 2020

I rarely buy from 3rd parties on real retail sites.  Target and NewEgg, you can see the prices are severely marked up vs standalone sites.  As a seller, I understand why: the fees are so high and the marketplaces push all losses on you.  I guess those sellers mirror listings there for visibility because stuff can't possibly sell at those prices.

I've bought from a 3rd party once or twice when the price was right on Walmart.  It went over about as well as eBay or Amazon.  But they were impossible to reach with a question after the sale.

All in all, I think all of these marketplaces have the same problem.  They think 3rd party sellers are their employees, so they don't even leave any crumbs on the table for them.  It's like nobody understands why eBay took off in the late 90s...and has languished for the last several years.
 

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This user has validated their user name. by: RKTOYS

Wed Sep 16 17:22:15 2020

Hint:  it's because _everybody_ had a chance to make money on sales, not just the marketplace, shipper, and card processor

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This user has validated their user name. by: toolguy

Wed Sep 16 23:56:02 2020

@Covid 20

So what ended up being the solution?

Another website or a brick and mortar?

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by: glasspackaging This user has validated their user name.

Thu Sep 17 08:06:31 2020

Contrary to other comments, we offer better quality bottles and jars to Walmart online customers .... while it is not near Amazon volume, it is 20x our eBay volume on the same items.

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by: jimcooncat This user has validated their user name.

Thu Sep 17 21:50:45 2020

glasspackaging: How has Walmart been to work with?

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by: Picky Chicky This user has validated their user name.

Tue Sep 22 13:47:14 2020

When I go to a retailer's site, I expect to be doing business with the retailer. So, I always check the box that shows the retailer's stuff only. If I can't find what I'm looking for, THEN I'll look at third parties. About the only time I find it necessary to purchase from a third party is during the holidays. Last year, I had issues with one of them on Wal-Mart, delaying the shipment all the way to Christmas Eve (it should have been there weeks earlier with the rest of the stuff).

So, I don't bother selling on their marketplaces. I don't want to be one of those sellers who gets berated for not being the retailer they THOUGHT they were buying from. I wonder how many canceled purchases they deal with.



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