An online marketplace connects users (buyers, potential customers) with a variety of sellers (vendors, merchants) allowing them to shop and interact in one place. The shared space increases efficiency by reducing the time taken to find specific products. Marketplace operators run online marketplaces. These operators are companies that ensure transactions are conducted smoothly, payments are made to the correct parties, and customers are given the correct services.
The marketplace operator often provides customer service to both the business and consumer, maintaining responsibility for any issues, whether they be customer satisfaction, transactional, or delivery-related issues.
Examples of online marketplaces
Examples of popular online marketplaces include Etsy, e-Bay, Seamless/GrubHub, Airbnb, Priceline, etc. Mercato is also an online marketplace.
Mercato connects consumers with small or independent grocers, specialty food stores, craft food purveyors and other quality food merchants. Grocers can sign up with Mercato and select easily add their available inventory through a centralized inventory database (which includes, for example, product and nutrition information for over 140,000 existing items. Delis, bakeries, and even specialty food markets are using the platform to make shopping more accessible.
Mercato allows food merchants to offer online shopping and delivery options to their customers and potential customers and opens the merchants up to a broader audience.
Marketplaces like this ensure that independent businesses can be technologically up-to-date and as quick to serve consumers as giants like Amazon, Whole Foods, and Walmart.
Why is it beneficial to participate in an online marketplace?
Online marketplaces work because both consumers and businesses look for efficient ways to exchange goods and services. Unlike e-commerce platforms, which have one seller and multiple buyers, on an online marketplace, multiple sellers and buyers have access to a uniform platform. The aggregation of multiple sellers into one space generates heavier traffic to online marketplaces, as customers have a wider variety of entry points (familiarity with a diversity of brands and merchants). More traffic gives your business greater visibility and potential for discovery, as more and more buyers move to online markets.
What do small businesses gain from joining online marketplaces?
Here are some of the advantages that can be gained by signing your business up to an online marketplace:
Convenience and Efficiency.
The easier it is for a customer to find the item they’re looking for, the more likely they will buy what you’re selling. Additionally, marketplaces like Mercato handle online orders, delivery fulfillment and provide customer support. Given the accessibility and efficiency of online shopping, customers are likely to order from a business at times they may be less likely to attend a brick and mortar location (e.g. holidays, during inclement weather, during work hours, after store business hours, if the customer is house-bound, etc).
Digital marketing expertise
Online marketplaces often employ digital marketing experts who leverage search engine optimization (SEO) techniques. This means that relevant search terms, for example, “Best craft cheese in NYC” or “best local butcher in Boston” are more likely to include your store at the top of search results, allowing for your products to be seen and discovered more easily.
As mentioned above, because the operators of the marketplace hire their own professionals (e.g. marketing, IT, coders, etc.) merchants who register for those platforms can avoid the high costs associated with hiring their own experts or expanding their payroll unnecessarily. Not having to worry about these endeavors (or even order fulfillment in the case of Mercato) enables merchants to spend more time, energy and resources on other aspects of their business. This environment lowers the barriers to entry for prospective business owners and managers looking to start their own business. They are able to launch their business and build an online presence with reduced overheads and extraneous costs.
Customer recognition and loyalty
Online marketplaces can also achieve greater customer recognition and loyalty, ensuring that customers will return to the marketplace for their product needs. You’ll get more repeat customers because they will know exactly how to find your store and the products you sell.
A competitive edge
Joining a marketplace helps keep merchants prices competitive and allows for side-by-side comparisons. With an “apples to apples” comparison to merchants offering the same or similar products in your area, you’ll be better able to track and measure the competition. Also, as the volume of online consumers increases, so do sales.
Improve Online Reviews – Improve Sales
Online marketplaces offer consumers another avenue to review merchant business. Achieving good customer reviews (e.g. on Yelp, Google results, etc.) is crucial to building a business and can greatly impact sales (for better or worse). Marketplaces sometimes require participating businesses to achieve a certain rating on websites like Yelp, ensuring that participating grocers are high quality and customer approved. Increasing customer confidence in the products you provide will bring in an influx of new customers, not only to your online market but also to your local shop.
Mercato allows merchants to respond to customer reviews for free – which platforms like Yelp charge merchants for.
Access to Better Data
Since customers can review business and products, merchants and store managers are able to determine with accuracy which products are highly-rated bestsellers and which products are redundant inventory (or take up unnecessary shelf space). Stores can use this data to quickly shift products in and out of circulation and increase stock for products as needed. Furthermore, merchants gain data such as best sales times, data on the consumer (where and what else did they buy? Average cart value? Product trends). Merchants can use this greater clarity and statistics to bolster sales strategies.
An online marketplace can be a useful tool for merchants aiming to grow their business. Online marketplaces leverage the power of search and online traffic to attract new customers, satisfy existing customers with convenience and deliverability options and help merchants compete against enourmous e-commerce giants. As the shift to online grocery and produce shopping continues to grow at a rapid rate, joining a marketplace allows merchants and food purveyors to take advantage of this shift and get ahead of the curve.
Reach out to Mercato and ask what we can do to get you selling online ASAP.