The need to digitize part of their business has emerged as a matter of survival for many small and medium-sized enterprises (SMEs) following COVID-19 and the digitalization of purchasing behaviors.
What is the fastest and most financially attractive way for SMEs to do this? Sell their products on one or more marketplaces!
Marketplaces are a low-cost solution
The proportion of small and medium-sized businesses that have their own e-commerce website has risen from 9% to 20%(1) within an 18-month period. This is an improvement, but it remains a tiny proportion compared to the big brands.
Moreover, France is ranked 16th out of 28 countries in Europe on the DESI (Digital Economy and Society Index) 2020 survey. Spain and Germany perform better, being ranked in 9th and 11th place, respectively.
Why are SMEs dragging their feet? Because creating a website costs money. Firstly, the creation of the website alone requires a significant initial outlay of a few thousand euros, at the very least. To this must be added the website hosting and maintenance costs, again costing several thousand euros. Not all SMEs have sufficient cash flow to make this investment. Conversely, due to their commission-based model, there are few or no barriers to entry associated with marketplaces, which therefore represent a lower-cost alternative.
Marketplaces offer the best visibility to SMEs
An opportunity to play in the big league to obtain maximum visibility. That is the power of marketplaces!
In fact, the reputation of marketplaces is a sufficiently strong argument to convince SMEs to take the plunge. Indeed, Internet users tend to prefer marketplaces for the discovery of new products.
According to a 2021 study by Dynata, they have even become the second-biggest product-discovery channel (34% of respondents) after word-of-mouth (37%).(2) The need for SMEs to be present on this sales channel therefore becomes obvious. It is indeed the best way for companies to raise their profile quickly among a wide range of consumers but also to acquire new customers.
Marketplaces also make it easy to increase the number of consumer offerings while pooling the technical and financial resources required to ensure online visibility. However, companies still need to make the right choice between being accessible on a massive mainstream marketplace like Rakuten, or focusing on a more specialized marketplace, like The Phone House, to benefit from a smaller, but highly targeted and more qualified audience.
Marketplaces stand out as an easy solution
SMEs benefit from the natural traffic of marketplaces, which forge a relationship built on trust with end customers – initially, at least. Once an SME has developed its business on a marketplace, the latter can, in a second phase, offer the company additional services in order to increase its visibility, via sponsored products, for example. The marketplace can manage an SME's logistics if it wishes to do so, freeing it from the performance of time-consuming tasks. Four hours – that is how long a salesperson spends on average each day dealing with customer requests (invoices, shipping times, etc.). This is time that cannot be spent on generating business, which is why it is in the SME's best interest to migrate to a marketplace capable of offering it the maximum number of services.
Marketplaces are extraordinarily powerful business generators
Being present on a marketplace means having an online presence 24 hours a day, 365 days a year. This easily allows SMEs to extend their customer catchment area to the whole of France, but also beyond national borders, thus enabling them to access new markets. These are targets that would not necessarily have been reached using other business development tools. Marketplaces therefore stand out as a customer acquisition channel that needs to be exploited. Today, they are the fastest way to ramp up your sales, as long as you manage to surround yourself with the right people.
Marketplaces are THE solution for the future
Consumers are demanding ever more convenience and immediacy: we are in the age of convenience and marketplaces are part of this trend.
Customers need new digital shopping solutions and an optimal level of services (quality of the offering, good price positioning, a high-quality delivery experience and an exemplary customer relationship), even more so in times of crisis when the need for reassurance is stronger than ever. The bar has been set high for SMEs! This is why joining marketplaces is THE right solution for them, provided that they are properly supported on the key issues.
Currently, sellers are present on an average of 2.7 marketplaces. That is very few, but joining a marketplace requires so much time and money that they tend to restrict themselves. At Octopia, we make this process as easy as possible by allowing sellers to log on to as many marketplaces as they want, without delay. This ultimately enables them to increase their business very quickly, which is their number one priority!