3 Pros & Cons of Selling on Multiple Marketplaces

By Nizaruddin Ahmad E-commerce No Comments on 3 Pros & Cons of Selling on Multiple Marketplaces

So you have been selling on a marketplace like Shopee, Lazada, or Zalora.

If you have been selling on them for some time, you may have noticed that your sales growth may have been:

  • Slowing Down
  • Stagnating
  • Slowly Decreasing

Don’t panic! There’s actually a reason for this!

You see, you might be reaching (or have reached) a saturation point on the platform.

There are a few ways to solve this problem, and one of them is to start selling on other marketplace platforms.

By expanding into more than one marketplace, sellers like yourself are able to reach more potential buyers.

It’s simple right? The more marketplaces you are on, the more attention you bring to your products; which brings more buyers!

Even though there are quite a few attractive reasons to do so, we would also like you to consider some other things before selling on another platform.

Let’s start off with the pros!

Pros of Selling on Multiple Marketplaces

Increasing Product Awareness

Let’s begin with the most obvious benefit, getting more people to see your products!

Imagine this brick and mortar example:

  • You’re someone who produces and/or sells clothing
  • You got a deal with Giant to sell in ONE of their stores in the Subang Jaya area
  • Everyone in that area will now be able to see your products and buy from

Using this example, you now will only be found in one store in Subang Jaya.

After some time, you will experience a market saturation, which will stop your growth.

What do you do then?

The next step is to sell in other areas as well, like PJ, KL, and other areas.

What if those become saturated as well?

Then it is time to sell in other shopping galleries of course!

You will be approaching places like Aeon, Sunway, and other malls to have your products sold there.

Likewise, this applies to selling on online marketplaces as well.

Basically, once one channel is saturated, it is time to expand your efforts into other channels.

By doing so, your products will get more attention simply because you can be found everywhere!

This ties into the next point quite closely

Increasing Revenue

Continuing on with the example above, you are now selling in multiple locations and malls.

People see your brand and get to know it better.

With all this increased attention, you will definitely be getting more customers!

This is simply following the progression of a sales funnel, as seen below.

Sales Funnel - Selling on Multiple Marketplaces

As there is nothing much more to add to this, let’s move to the next (and probably the most important) pro for selling on multiple marketplaces, which is reducing risk!

Reducing Risk

Let’s continue with the example.

You have been selling in multiple stores and malls like Giant.

Suddenly, Giant stops operating (just for example) and closes down all its outlets!

Now all your stores in Giant outlets are closed and you have lost all possible revenue for it.

Scary right?

Well, if since you were also selling in other places, you’re not out of business yet; but what if you chose to stay only with Giant?

Well, then you would be out of business for some time.

This can be applied to online marketplaces as well!

What if you only sold on Shopee and, for some reason, Shopee suddenly closed down?

The same thing as earlier, your business might be closed as well.

This is why it is important to diversify your risk, and simply not put all your eggs in one basket.

We have covered some really important pros, but there are some factors to consider when selling on multiple marketplaces as well.

Things to CONSider When Selling on Multiple Marketplaces

Commission Fees

Every marketplace works similarly where they will charge you a based on commission.

Basically, for every product that gets bought from you, the marketplace will take X% of the sale as per the agreement for you to use their platform.

That said, every marketplace has different commission rates.

Some marketplaces have different commission rates based on products too.

So before selling on a platform, do learn as much as you can about their commission rates.

Logistics

Similar to commission rates, different marketplaces offer different logistic solutions.

Some marketplaces will handle the shipping for you, and even charge the shipping cost to the buyer rather than you.

The marketplaces that are just starting out may not be able to do so, and you will have to source for the right logistics solutions yourself.

This, of course, is not taking into account that your buyers might be purchasing from areas with little to no logistic companies in the area.

That in itself is a different problem to think about before choosing to sell on a marketplace.

Once again, some prior reading on the marketplace you’re interested in will help you a lot down the line.

The last thing to consider is the competitive environment on another platform.

Competition

So you have been selling on Lazada all this time, and are finally about to move to Shopee.

Well, if you are, then don’t expect to have the same level of success, or believe that what you did last time will work exactly the same way.

Why you ask?

Well, think about this:

  • You and a competitor have been competing in Lazada for some time
  • Your competitor who wants less competition starts to move earlier into Shopee
  • As time goes by, buyers on Shopee will be more aware of your competitor and not you, as you’re still on Lazada

Simply put, there are other sellers like you who have been selling on different platforms and have gained more trust and confidence with buyers who only use that platform.

When you move to another platform, expect the competition to be high, and plan your business accordingly.

As you may have had a good grasp on the market last time, on a new platform, it is almost the same as starting from nothing.

Conclusion

As you have read, the benefits of moving into multiple marketplaces are great for growing your business like increased awareness & revenue and decreased risk!

But, there are some factors that you should consider before doing so, like commission fees, logistics, and competition.

Not too sure where to sell on? Check out our list of the top 13 marketplaces to sell on in Malaysia!

Feeling overwhelmed with what needs to be done?

Don’t worry!

Have a consultation with us, and we will help you grow your online business further!

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