Marketplaces

Why are we talking about them now?

Last week Retail Week revealed that Tesco is to take on etail giants Amazon and eBay with the launch of a marketplace on its website enabling individuals and other retailers to sell their wares. The grocer is expected to launch its marketplace next summer, and is building the IT platform to support the operation.

What is a marketplace?

A marketplace allows consumers and other businesses to buy and sell new, used or collectable items on another retailer’s site. If the retailer also sells the same product, all the items are displayed together.

What is the benefit for retailers?

A marketplace allows retailers to become the definitive place to source products. In the case of Amazon, for example, shoppers wanting to source a particular book will find new products on the site alongside secondhand copies or maybe even limited-edition copies at varying prices, giving the customer the best choice. It also allows retailers to sell a wider range of products, including more niche ranges, without taking stock risks.

Where did the idea start?

EBay was the first etailer that let customers buy and sell their own products. It launched in the US in 1995 and fast became a global hit. Amazon became the one to watch when it launched its marketplace in the US in 2000, then the UK in 2002. Other etailers including Play.com also have marketplaces.

Are there any differences between the marketplaces?

The marketplaces generally allow all types of businesses to sell on the sites. However, fashion etailer Asos is poised to launch a marketplace on its site with an edited choice. It wants to create different ways for shoppers to sell second-hand clothes, giving sellers advice on how to best present their products, such as modelling items outdoors. It will also have a separate area for smaller independent retailers, but those wanting to sell on the site will first be checked out by Asos. The etailer will send scouts to authenticate what the shops sell, then create shop-in-shops for the businesses. It will also be open to brands and businesses wishing to sell overstock on its Outlet section.

Are there any pitfalls?

Some think if a site sells everything and anything, it can be overwhelming for consumers, so some editing should ensure a smoother shopping experience. There should also be a degree of policing as eBay has had customers selling counterfeit goods.