As post-COVID consumers, we’re no strangers to online marketplaces. The giants are a dime a dozen, with options ranging from Alibaba to Amazon to Wamart and more. We’ve never had more options when looking for anything from a blender to a stationary bike. We can cross-compare prices, ship times, reviews, and otherwise across multiple sites – or, within marketplaces, across multiple sellers. While these marketplaces have formed the fabric of our e-commerce world, there’s usually one thing missing: salient transparency. In other words, both sellers and buyers seldom see the whole story regarding what happens in the ‘middle.’
The marketplace acts as a middleman, which typically entails collecting fees and pitting sellers against one another in competition. At its worst, this drives up costs to customers, while lowering profits for sellers. Further, this can put the marketplace platform itself in the driver’s seat of what’s really bought and sold, sometimes at an unbelievable scale — and when fees are high and the reasons behind them all too opaque, sellers can find it difficult to turn a profit. What’s more, because most marketplaces are also retailers in their own right, sometimes they recognize the third-party sellers succeeding on their website, identify which products are selling well, then source those goods to sell via their own retail platform, essentially becoming direct competitors of the vendors and sellers they feature.
Naturally, a retailer’s own product listings tend to be promoted far more than those of third-party sellers, and in especially egregious cases, marketplace giants with manufacturing capabilities will recognize a popular type of product and begin to produce and market it themselves. As immense an investment as manufacturing a product to directly compete with a marketplace’s own seller base might seem, the giants of the e-commerce world will invest enormous capital in producing their own competing products to pit against the items listed on their marketplaces that are overwhelmingly popular.
This can even affect manufacturing at large, as suddenly materials suppliers are beset by huge orders for limited resources, that can affect the entire supply chain of a given kind of product — massively disruptive for e-commerce and, at its worst, even bricks-and-mortar retail.
Overall, because marketplaces have access to data on how a product is selling, the market research is done for them — making it easier than ever for them to swoop in and steal a profit opportunity if they see fit, which leads to a monopolization of the marketplace, leaving both buyers and sellers on the outside.
Transparency and Support for Sellers
OnBuy is a marketplace with a new business model, and their promise is transparency. Rather than seeing their vendors as competitors and offering the same products, they offer a different form of competition: competitive fees. In other words, Onbuy sees their real competition as other marketplaces, rather than the vendors that they feature.
“This creates an environment where sellers can sell through a marketplace that has their best interests at heart,” says Cas Paton, Founder & CEO of OnBuy. Paton is an award-winning entrepreneur who tirelessly champions the need for ‘fair and equal’ marketplaces.
“We put our money where our mouth is and help promote the sellers, which can help them to grow their businesses,” he explained. Sure, this overlooks the ability to make an extra buck as compared to their “profit-first” competitors, but it’s a more ethical way to connect buyers and sellers. And, this is giving OnBuy an advantage over other marketplaces, because sellers are observing higher sales and better product performance as opposed to the other websites where their products are listed.
Abundant and Affordable Options for Buyers
Marketplaces are a ‘chicken and egg’ scenario – how the sellers are positioned has an undue influence on whether customers flock to the site – or, if they do, whether or not they return. The lower prices in a competition-free environment provides affordability for buyers. Abundance is prevalent, too – because of the incentive for sellers to offer their products on Onbuy, their database now has over 25 million products and counting. This gives buyers options, freedom, and flexibility.
Onbuy is proving how driving down prices and sacrificing profit opportunities on the frontend can lead to more success in the long run – and, they’re just getting started, having closed a Series A funding round and with the intent to continue internationalizing and scaling. As their customer base continues to expand to four million monthly visitors through word of mouth and thousands of glowing reviews, it presents an opportunity to assess what we really want in our marketplaces. If we rely on these online markets to connect us to sellers, shouldn’t we get the original price and the product as it was intended to be sold? And, shouldn’t sellers have complete faith and trust in how their product is being presented to potential buyers?
Perhaps transparency in selling online is the best chance at boosting the ecommerce ecosystem for small businesses. Mediums like OnBuy are leading the way.
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