An online marketplace is a type of e-commerce site that serves as a platform and intermediary for connecting third-party sellers with shoppers. The most commonly used marketplaces where sellers can post listings are Craigslist, Facebook Marketplace, and Google Shopping Actions. Pricing and negotiation strategies, as well as optimizing your listing for viewers, can help you maximize profits on your marketplace store.
Why Sell on an Online Marketplace?
Small local businesses can benefit a lot from online marketplaces, which is why they’ve become a popular place to sell a wide variety of on-demand items.
Access a Wide Customer Base
Customers looking for deals in their local areas widely use online marketplaces. In fact, Facebook Marketplace alone boasts 800 million active users. E-commerce platforms of all types have seen a rise in use during the COVID-19 pandemic, and online marketplaces are no exception.
Minimal Overhead Costs
Running your own e-commerce website and driving traffic to it requires heavy investing early on in order to see eventual success. Existing marketplaces save you the overhead cost of building up a store that gets visitors. According to a 2018 trends report, 78% of Americans use Facebook to find new products. Facebook Marketplace doesn’t charge a listing fee, nor does it take a commission on sales. The same goes for Craigslist and most other listing sites for local sellers. On the other hand, eBay takes a 10% cut of your sales.
Avoid Shipping Hassles
As opposed to getting second-hand items on eBay, online marketplaces let customers shop deals from local sellers in their area. You won’t need to print labels and mail packages. In fact, all you need is the item and a plan for how to make the exchange. You can meet with your buyer in a public place in person, arrange the exchange through a last-mile service, or send the item by mail using a third party like eBay or PayPal.
How to Price Items on Marketplace Platforms
When using the internet to shop, buyers have higher expectations when it comes to scouting out the best deal. Here’s what you can do to compete as an online marketplace seller:
Do Your Research
Comparing listings is easy for shoppers to do, so as a seller, you should frequently check on your competition, too. First, review similar listings on the platform you’re using and then look at prices on eBay for comparison. Write down the range of prices you see, from lowest to highest. Ensure you make a profit margin once you factor in overhead costs and then choose a price within that range.
Leave Room for Bargaining
Try to price your items just a little higher than you expect them to sell for. This way, you’re able to make higher profit margins from buyers who don’t haggle. Meanwhile, you leave room for buyers intent on negotiating a lower price when using online marketplaces.
Justify Your Price
Justify the price of your product based on what elevates its value, whether it’s an antique, a vintage electronic device, or an otherwise rare item. Include details on every feature and benefit your item offers. Since sellers with online marketplaces like Craigslist and eBay often list used and second-hand items, make sure you emphasize your products are brand new if they’ve never been used.
Optimizing Your Listing for Sales
There are a few best practices for crafting a successful marketplace listing. To make a good first impression and show up in search results, here’s what to do:
Include Relevant Keywords
Shoppers are relying on the search terms they type in to find the items they want to buy. As a seller, you can drive added traffic to your listings by including more keyword terms shoppers might use. Writing complete descriptions for your products that highlight all the benefits should allow you to include different variations shoppers would use to search for the items.
Make Listing Text Easy to Read
Double-check for grammar and spelling in your listing. If the platform allows the option, use bold headings. Break up the text with several paragraphs so it’s easier to scroll and scan.
Take Quality Photos and a Video
Professional-looking photos of your items improve your credibility and help push product sales by showing them off in the best light. You’ll increase your outcome of sales if you include a video to show the product in action or give a full 3D rotational view.
Share Your Listings
Share your listings with Facebook groups to get more eyes on your products. Look for groups that post online offers in your local area. Before you post in a group, read the admin’s rules and make sure you’re allowed to share your listing.
How to Negotiate on Marketplace Sales
If customers want to negotiate price on marketplace items, kindly engage in negotiation. To safeguard against scams, here are some rules you should follow:
Drop the Price in Small Increments
Your customer might offer a lower price or ask you for one, but it’s important to stick with your own bargaining rules. Go down by 5% increments every time the customer budges on their negotiation. By sticking to a plan like this, you can avoid getting roped into bad deals by good bargainers.
Be Willing to Walk Away
The first rule is you never want to give in to a customer asking for a price that’s too low. If you won’t make a profit on the sale and that’s your goal, then you have to draw the line by being willing to walk away from the negotiation and politely decline the customer the sale.