I called this 5 years ago. Manufacturers, Brands and suppliers have woken up and started selling direct to consumers, sometimes hiding their true identity to avoid disturbing their contracting wholesale model and network. Don’t say I didn’t warn you – this has been coming for years! It has become too easy for them not to!
Let’s rewind. It’s 2015. eBay is still big but losing market share. Amazon is a household name, but its logistics arm is still not ingrained in most domestic supply networks. Prime has barely begun. Tesco marketplace still exists, and many flash deal marketplaces are looking for a share of the spoils overseas.
Many retailers have already caught on – the world is buying on marketplaces. Websites are harder and harder to grow successfully. It costs a small fortune to get your website in the first 2 pages of Google search results, and anything less isn’t worth it. SEO and online advertising have become so cut throat that you can’t even play the game without expertise and long term budget.
Yet, Brands, manufacturers and distributors aren’t seeing the trend move under their foundational historic infrastructure and business models. Marketplaces are still perceived as a fad that will disappear, or an unknown quantity of hassle, risk and minimal reward. Even though some department chains have already started to shut down stores and contract, the high street still believes it’s unnecessary to change. Toys R Us and Mothercare still exist with foot fall, albeit dwindling.
The jerk-removal of physical stores and sudden need for people staying home has inevitably led to one event – the explosion of eCommerce and marketplaces.
So what happened? Nothing cataclysmic. As the old saying goes, a boiling frog won’t know he’s cooked until it’s too late, if you gradually turn the heat up. Slow moving trends can be hard to see, let alone react to for large organisations.
The global lockdown and Covid-19 have cranked up the heat suddenly. The jerk-removal of physical stores and sudden need for people staying home has inevitably led to one event – the explosion of eCommerce and marketplaces. Everyone is home and shopping online. And now that the seal has broken for so many who never shopped on marketplaces before, it’s hard to imagine we will ever go back to the way things were.
Everyone who procrastinated on moving online is feeling the pain of their mistake. And suddenly, with wholesale and supply chains disrupted in all steps, many are sitting on stock they cannot sell the way they have been so accustomed to. It’s a wake-up call too late for some – Laura Ashley, Cath Kidston, Johnsons Shoes and many more have challenges ahead to survive. I’m sure many will, but as a shadow of their former selves.
The winners right now are those that embraced selling on marketplaces years ago. This shouldn’t be a surprise – every year, Amazon eats more eCommerce globally. eBay is still growing, too slowly, but still increasing nonetheless. Many new marketplaces are growing – Zalando, Cdiscount, ManoMano and Walmart to name a few. New ones are popping up each year…it’s the age of marketplaces.
And now, we’re finally seeing the impact – we’re getting inundated with Brands and manufacturers asking the same questions – “How can we sell online?” and “How can we protect our wholesale business in doing so?”
It’s too easy. Maybe I say that because we’ve been doing this for a living for so long – (shameless plug coming) helping these companies sell online profitably and scale their operations for year on year positive growth.
It really is too easy. Buyers are on the marketplaces already. No need to drive traffic – they are doing that for you.
Setting up accounts and listing on the channels often isn’t too hard. Listing with the right optimisations and strategies however is the secret sauce, alongside the marketing tools you use on each channel.
Selling overseas? Often a few clicks, some paperwork, and a machine translation (or human one), and you’re done. No need to worry about taxes, overseas marketing or a localised website… the marketplace has you covered a lot of the time. And there are service providers scrambling over each other to give you the best service for it affordably.
3PLs and logistics networks are more competitive and more ‘in the cloud’ each year. There is a list a mile long of online systems, platforms and tools that can connect you everywhere and give you raw valuable data to know where to funnel your attention. Service companies like ours demystify all this and fast track you away from common mistakes and pitfalls to ensure month one is on track – but you can all make a start right now, with the device you’re using to read this.
It’s too easy for a manufacturer to hide their identity and sell online. It’s too easy for a Brand to be selling direct-to-consumer and control not only their presence on marketplaces, but also their pricing and relationship with buyers. There’s just no need for middlemen. As a manufacturer or Brand, you can connect directly with your audience. And more importantly than this, your audience increasingly expects you to.
I say too easy because we live and breathe it. I’m being unfair. To someone coming into this age of marketplaces new, it’s a deep ocean out there of opinions, ideas and murky promises of success. How many get rich quick Facebook ads do you now see which promote selling on Amazon via FBA? Or how to optimise Ad spend to make millions in month one? It’s not that easy for most, but it is easy once you know all you need to.
To all the manufacturers and Brands contacting agencies like us to accelerate to get online – it’s never too late and we welcome you! We’ll make it easy, so you don’t have to spend years figuring out what we learnt the hard way over the past decade. The buyers are waiting for you. The market is shifting, and your control of your online presence is needed to stay relevant.
To all those still trying to avoid a direct to consumer strategy on marketplaces… I sincerely wish you luck. You’ll need it.