Additional sales channels are always desirable, in this article we will discuss the three major online department stores / marketplaces. In general, selling on platforms is good for your sales, but the impact on your brand name / awareness is relatively low. Buyers often go back to the Marketplace itself and have a hard time turning into loyal website visitors. Because of the concentration of buying public, marketplaces are still growing and offer opportunities for sellers.
Selling on BOL.com
BOL is the best-known Dutch ‘marketplace’, for new products (but also second-hand). BOL has many professional sellers on its platform in addition to its own assortment, making it the largest online department store. They charge between 8% and 15% ‘network fee’ for each sale, but these rates change regularly, partly due to increasing competition. A catch is that you also compete with BOL itself when you sell products that are generally available. With own products or protected imports (with EAN), BOL can be a better channel (competition is lower); otherwise it’s a good channel for generating sales; but don’t expect these buyers to turn into regular customers; making a margin on each sale is therefore recommended.
Since the arrival of Amazon in the Netherlands (after first being able to order only through Amazon Germany), Amazon’s market share has been growing rapidly. This giant is seen as the great challenger to BOL in the Netherlands. An advantage of Amazon is that besides the Benelux, all of Europe comes within reach of your company.
A local player with a large market is Kaufland.de, which serves the entire German market. The former real.de is Amazon’s biggest competitor in Germany. For Dutch companies, this is an excellent opportunity to enter the German market. Starting to sell outside one’s own country, especially when a webstore has to be built from scratch, is probably easier via a marketplace than via a (new) webstore; and Germany is a country where many Dutch entrepreneurs look first after they have become operational in the Netherlands and Belgium.
There are, of course, different strategies for being successful online, and they often apply even more strongly to selling through marketplaces. For example, gross margin is always important, but counts more heavily with marketplaces because of the extra fee you pay the trading venue per order. Furthermore, consider the following success factors:
- Specialist niche: A niche that you know a lot about and others know less about gives you an advantage. Think especially of products where specific knowledge is needed for the right import or quality. Low volume products may also be of interest to you but will hardly be offered by them due to the (for BOL or Amazon) low turnover.
- Good gross margin: Because of network costs and shipping costs, a good gross margin is important, the above 3 points also help.
- Low return rate: Returns cost money, not only shipping costs but sometimes they are not saleable as new anymore. Good photos and descriptions lower the return rate, but also the type of product is important.
- Specialty products: At BOL and Amazon, it’s all about speed and standardization. Do products not fit in the warehouse or do they require special transport? You can offer such products better than BOL or Amazon.
- Own brand/import: An own brand/import gives you an edge over the competition and ensures a unique position. While the company name does not develop as strongly when sold on a marketplace, an own brand can build familiarity and patronage.
An additional service that BOL and Amazon provide is to take the storage, shipping and return flows completely out of your hands. This service is called “Logistics through BOL” or “Fulfillment by Amazon”. Companies that sell through this service have often even shut down their own e-commerce site and concentrate entirely on selling through the marketplaces. When done with products that have sufficient margin, this strategy is easily scalable; your warehouse and service staff scale with the growth, and you only need to focus on the marketing!
Are you a web store that does not yet sell through Amazon or BOL? For buyers, a position on these platforms is increasingly important, an extra reason to add these marketplaces to your sales channels. The well-known web store platforms such as Lightspeed and Shopify have several plugins to connect your e-commerce site to Amazon and BOL and thus manage the orders in a central location.