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Are marketplaces the new retailers?

In Germany, half of offline fashion retailers are thinking about using online marketplaces as an additional sales channel the TW-Testclub has found out in its recent survey. The other half has probably already taken this step either with their own online store or with a marketplace like Amazon, eBay or something more country specific like Otto.

Reviewing the data and results of TW-Testclub’s survey Textilwirtschaft we see that by now, eight years after the boom in German fashion eCommerce, the question is not whether companies shall go digital but rather how. Retailers who fail to use this additional channel for their purposes will eventually lose out on 30% of their sales, they find. It’s not only one person who says that but the current trend shows that online sales are growing whereas the stationary sales are remaining rather stagnant. In 2015 online fashion sales grew by 18% to a total of 10 billion Euro and 4.1 billion Euro alone were generated on online marketplaces like Amazon or eBay.

What options are there for retailers to make use of market places?

As a retailer after having read this article or the original notice on Textilwirtschaft you might feel a bit antsy and urged to move. “There is something I need to do to be part of this digital revolution as they call.” And we think you are absolutely right. As the trend data points out there are two ways in which to increase your revenue through online sales: offering your own online shop or selling your merchandise through an already existing marketplace like Amazon, eBay, Rakuten and more.

For setting up your own online shop you can opt for shop systems like Magento, Shopify, Squarespace or create a custom solution for yourself. You will need an index where all items can be listed, a product view to give pictures, prices and more detail and then a checkout process including a cart page, forms for introducing shipping and billing addresses and a connection to a payment gateway to actually transact.

An own online shop is a nice way to showcase your products, to tell your brand’s story and to get to know your customers, but it is also a lot of work to get yourself known and to gain visibility among all online shopping sites that there are already.

On the other hand, if you opt for a marketplace solution you already have an audience that can be reached and you have tools that are there for you to start making your first sales. Amazon offers sponsored products where you can opt to pay for a certain keywords, with eBay you can pay to highlight your products and with Hitmeister you can acquire pre-selected marketing packages per month. Most marketplaces work with this Freemium idea, the barrier to participating is relatively low but then to make the most of it, to use extra Premium services, you have to pay a bit more.

Set up an Amazon store

To set up an Amazon store you head over to Amazon Seller Central for your country and follow the steps to register your store. Amazon will ask you for your company details such as the registered name, the address, the VAT number, the representative, the bank account, a phone number to contact you and then once your account is verified you can upload your products either one by one by going through Amazon’s forms or through a bulk data upload. Your products have different attributes like a title, a description, an EAN number, a price, a quantity, sizes, colors and of course pictures. You can select out of the categories that are available on Amazon where to sell your products and you can add keywords for Amazon to categorize and rank your products right.

To optimize your sales on Amazon you can do SEO practices like you do for a search engine such as Google or opt for one of the marketing packages such as sponsored products. The commissions you pay on Amazon depend on your sales and on the plan you chose. If you’ll sell more than 40 items a month you will most likely chose the Professional Plan, pay a monthly subscription of $40 and have variable referral and closing fee. Should you just be starting out with the store, Amazon also offers an individual plan for you with a $0.99 fee per item sold and a variable referral and closing fee per transaction.

Set up your store on eBay

Setting up your store on eBay is in many ways similar to Amazon. Listing your products is free and you pay a commission on every sale that you generate. Just as before you go to eBay’s seller center and register your business entering all necessary data like company name, tax number, physical address, company representative, bank account and credit card information and so forth. Once your account is set up, it is time to list your products. Here as well title, description, photos, prices, quantities are needed. The basic plan with 50 items per month is free, yet should you sell more it might make sense for your business to opt for a shop plan. In that case the pricing is a bit more complicated as it varies with the insert style (fixed price or  auction style) and the category you list your product in. eBay has done good work to make the fee structure understandable and it can be viewed here.

eBay supports you with your store by giving you instructions on how to best list your products, what categories to pick and how to advertise them. In addition, there are many great guides on how to take photographs, how to best describe the products and how to set up a shipping station in your home.

It depends on you whether you opt for an own online store or a store on one of the already well established shopping platforms. And of course, like most things in life, you can do both!

How to use FashionTrade as a marketplace?

Even though we at FashionTrade.com are also building a marketplace, it serves a slightly different purpose. FashionTrade digitizes the relationship and trading that is done between retailers and brands, we thus help retailers offline and online to stock their stores and brands to sell their collections to retailers all around.

If you want to find out more about how we work, we would like to invite you to take a look at our introduction video or at our dedicated pages for Retailers and for Brands.

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