International marketplaces: what you need to know

Expanding your e-commerce business abroad is almost a given these days, provided your business is ready for the next step. After all, you can increase your reach and market share by going international. In this blog, we take a closer look at international marketplaces. What exactly can they do for your business as you expand internationally, and what do you need to bear in mind? We’ve looked into it for you.

One of our previous blog posts was an introductory, general guide on taking your online shop international. In it, you can read that we, as Dutch people, account for only a relatively small share of total e-commerce turnover. It also points out that the countries e-commerce businesses choose to expand into are no longer necessarily the most logical choices. Translating your online shop and the way you write are very important and can also play a major role in internationalisation.

To generate as much turnover as possible, as well as focusing on your own online shop, you can also sell products via an online platform. In doing so, you pay a certain fee per transaction to the platform, also known as the marketplace. So, if nothing is sold, you pay nothing – apart from any advertising costs and, in some cases, a fixed monthly fee. We’ve explained this in our previous blog post, so now is the perfect time to take a closer look at international marketplaces. Let’s start with a well-known international marketplace that everyone is familiar with.

The best-known international marketplace: Amazon

So by now we all know how to market your products. Amazon is the best-known marketplace, and e-commerce continues to grow. As you’ve read, Amazon, for example, accounts for more than half of e-commerce turnover in Germany. So, do you want to expand your business into Germany? Then consider whether it’s a smart move to start selling via Amazon, or whether you’d be better off using another online platform to generate your turnover, such as Real. You can, of course, use Amazon when expanding into another country. But what exactly are the advantages and disadvantages of Amazon?

The benefits:

• Amazon is the largest online retailer, so an increasing number of consumers are searching for products directly via Amazon. Using Amazon therefore gives you a wide reach. What’s more, they have buyers from 180 different countries, so you’ve already crossed the threshold to going international.
• Amazon has positioned itself well and, in doing so, has built up a strong reputation and brand trust from which you can benefit.
• Your products can be stored with Amazon, and they’ll take care of everything else.

The drawbacks:

• The fact that Amazon is the largest online retailer can also work against you. The competition is fierce. Are there many suppliers offering the same product? If so, it’s difficult to stay afloat.
• So you pay a certain fee on each sale, but as a new seller, this can sometimes quickly become too high. Amazon’s CPA rates range from 8% to 15%.
• It is difficult to keep the order management system up to date. Please ensure that orders are entered into the system immediately.

So check whether your sales strategy is compatible with Amazon. It might be wiser to generate revenue in a different way first and then join Amazon later.

Real.de and Cdiscount

Speaking of Real.de: this is also a very important online marketplace that we should certainly explore in more detail. Real is Germany’s third-largest online marketplace and offers a straightforward set-up process with a comprehensive range of categories.

Real.de, formerly known as Hitmeister, has been operating since 2017. With millions of products on sale across more than 5,000 categories, it is a marketplace offering a very wide range of goods. Real.de delivers to 30 countries, has over 10 million visitors per month and 6.5 million customers. When you start selling on Real.de, you pay a monthly fee of €39.95 and the sales commission varies from 6.5% to 12%.

Cdiscount is France’s second-largest marketplace. With over 16 million users and a global turnover in 2018 of $2.3 million, it is definitely a player you cannot and should not overlook. Cdiscount focuses on France, but deliveries to countries such as Belgium, Germany, Spain and Italy are also possible.

Cdiscount is also a marketplace with a very wide range of products and can be compared to France’s Bol.com. The monthly fee is €39.99 and the commission per product sold ranges from 5% to 15%. Furthermore, Cdiscount pays out once every 15 days, which can be particularly attractive to smaller retailers.

Rakuten

Let’s shift our focus briefly outside Europe. Rakuten is Japan’s largest e-commerce marketplace, where you can sell products to over 100 million customers worldwide. Rakuten has a strong global presence and offers international reach for sellers, with the option to list products across various categories. As well as paying a fee for selling a product, you also pay a fixed monthly fee. A global network of Japanese marketplaces is open to buyers in Europe, North and South America, and Asia. There are also special benefits on the Japanese market, including the option for US sellers to create a ‘branded storefront’.

PriceMinister was a major online marketplace in France, but is now part of Rakuten.

Newegg

This online marketplace focuses on technology, has over 30 million customers and offers the opportunity to sell your products in more than 50 countries. Newegg is known as a good option for anyone looking for computer components. As a seller, you can also create detailed and informative product pages to attract more buyers.

Although Newegg is a large marketplace, it is not a suitable platform for every seller, as it focuses heavily on computers and electronics.

Etsy

Etsy is an international marketplace that focuses entirely on handmade and unique products. This platform is aimed at sellers and buyers in the creative industry and reaches no fewer than 33 million users worldwide. Etsy’s pricing model is clear. Listing a product costs €0.18. You also pay 5 per cent of the postage costs and 5 per cent of the total order value to Etsy.

Are you in the creative industry? Then Etsy is certainly a platform you shouldn’t overlook. Bear in mind, however, that there is fierce competition, given that there are over 2 million active sellers on the platform.

You can also choose to sell on Kaufland, another marketplace. Read more about it on the page we’ve written on the subject.

Trends and developments

Online marketplaces are becoming increasingly important in the online retail market. The market is growing, and more and more different marketplaces are emerging. There is a suitable option available for every country, product and payment model. Online marketplaces offer your potential buyers various advantages, such as choice, price and the guarantees and trust provided by the marketplace. They are often extremely well-developed platforms that are very user-friendly.

It is therefore expected that, in the coming years, online marketplaces will see significant growth in the market share of online retailers. Thuiswinkel.org has conducted research in collaboration with the eCommerce Foundation, and they expect the market share to have grown to 40 per cent by as early as 2020!

CensusWide recently conducted a study into the consumer of the future, in which online marketplaces also featured prominently. Here are a few notable conclusions, both nationally and internationally:

• 81 per cent of respondents expect to shop online more in the future
• 53 per cent of Dutch consumers start their customer journey on Google Search, but 33 per cent complete it on a marketplace.
• 58 per cent of Dutch people attach great importance to the selling price when making an online purchase. In the UK and USA, this figure stands at 64 per cent. Price, therefore, does not always tell the whole story.
• The Dutch are (much) less loyal to a brand than the British and Americans: 20 per cent compared to 39 per cent.
• 12 per cent of the world’s largest retailers operate an online marketplace. 32 per cent are considering doing so.

Conclusion

Marketplaces: whether you love them or can’t stand them, one thing is certain – you can no longer ignore them. In some cases, we really do see a love-hate relationship. You can’t live with them, but you can’t live without them either. Both nationally and internationally, these platforms are growing rapidly. Their market share is increasing, but in many cases the costs are also becoming (relatively) higher. It will therefore be necessary to assess each situation individually to identify the opportunities and limitations for you as an online seller.

Depending on the country, niche, product and even revenue model, you’ll need to determine which marketplaces suit you best and assess whether the approach will work at all. In any case, there are more than enough opportunities. Please feel free to get in touch with us so we can explore those opportunities together.