You should develop marketplace strategies, not open marketplaces indiscriminately

A marketplace is hip! Marketplaces are today’s Tamagotchi. Everyone is playing around with it. Unfortunately, unlike the Tamagotchi, merchants cannot restart if the game goes wrong. 

Marketplaces are all the rage: after Real and the Hitmeister takeover, Karstadt struck Hood. And DPD cooperates as the exclusive service provider with Buyerzon, a completely unknown marketplace. The marketplace fever seems to be taking hold. Even if it is generally to be welcomed that the importance of a marketplace strategy has arrived in the industry, it should become clear that a marketplace strategy does not necessarily require its own marketplace. Especially not a full-range supplier who simply has everything in its range and so would have to be an Amazon or Ebay competitor in terms of positioning.

Not everyone needs a marketplace

A certain size is necessary to operate a marketplace. For many traders, including larger traders, it can make more sense to use existing marketplaces. Marketplaces need huge assortments right from the start, many dealers and must have a large reach. As well as processes and manpower to support the dealers.

These are, among other things, reasons why Real with Hitmeister and Karstadt with Hood have bought complete marketplaces. With Hood.de, however, the last marketplace with a noteworthy reach is gone, for other marketplace interested parties all that remains is to rebuild. And anyone who still wants to open a marketplace today needs extremely long breath.

Full-range supplier, the Amazon clones

Opening a marketplace that positions itself as a generalist is extremely difficult. The last successful new opening is likely to be Siroop.ch in Switzerland. Who benefit from the special features of the Swiss market, which is still very self-contained compared to the domestic market.

Establishing a new generalist or full-range supplier who simply sells everything is much more difficult on the German or European market. Most recently, the Swedish marketplace Fyndiq could tell a thing or two about it, who withdrew from Germany because the business wasn’t worth it. An enormous advertising power in the direction of the end customer and retailer is necessary to reach a profitable threshold. That requires large, two- to three-digit million amounts as investments.

Marketplace strategy: Unique selling points are necessary

It can make more sense to set up a marketplace with a clear unique selling point, a special focus such as Mytoys is currently planning , which focuses completely on the family as the target group. It is much more promising to prove product range competence in a category and to target advertising budgets specifically to specific target groups than to actually want to compete with Amazon in full .

“David and Goliath” have no place in a marketplace strategy

For smaller retailers, a marketplace strategy is always about two things: Firstly, to moderately expand their own range in their own shop and, with cooperation partners, to open up new sources of revenue in completely new ways with services, services or content. And secondly, about the intelligent use of existing marketplaces such as Amazon, Ebay, Otto, Real or Rakuten.

Whatever retailers do, it doesn’t always have to be an attack on Amazon. You don’t always have to play “David against Goliath”. These images are quickly evoked in media reporting, always with a positive connotation. According to the motto “someone is finally doing something”. Yes, namely nonsense. In contrast to the Bible, such arguments do not end with a victorious slingshot. Traders prefer to look for an intelligent way to use the large marketplaces for themselves, even if that involves risks. Today’s customer reality dictates that.

Marketplace strategy does not mean “Let’s do it like Amazon” or “Let’s attack Amazon”, nor does it necessarily mean “We have to have a marketplace”, it means for your own company to find the best possible way to deal with the new world of platform economy.

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