Marketplaces have become an increasingly important route to market for brands who want to grow their international online sales. In this blog, we share the three key phases of online marketplace internationalization that every consumer brand will go through during its journey into new markets.
Cross-border online sales have grown significantly in recent years, and the global ecommerce market is forecast to surpass $6 trillion USD by 2024. However, launching in new markets is a complex process which requires expert knowledge and a willingness to invest to reach scale.
Our newly launched Marketplace Internationalization Checklist highlights what consumer brands need to think about when considering whether various marketplaces should be a key channel within their international ecommerce strategies.
Entering new markets however is no easy task. A brand that resonates in its domestic market may not do so in its target market. For this reason, we recommend that brands test for demand in the new market to be sure that customers exist.
A simple way to do this is through cross-border sales via marketplaces. By selling cross-border your products will be readily available in markets that previously might have required a localization strategy, providing a shortcut to marketplace internationalization for many brands.
Once you’ve established that there is demand for your products in your target market, you can begin to increase your profile. Investing in local marketing–while still selling cross-border–is one way to increase sales momentum.
Running local marketing campaigns in your target market with native content can help with demand generation. Engaging with influencers on popular social media channels provides plenty of opportunities for brand awareness and drives customers directly to your sales channels.
Finally, localizing your proposition is the third phase of online marketplace internationalization. Create a local entity, local listings on marketplaces, and move product to the market to fulfill orders once consumer demand warrants the investment. You may also consider launching a localized direct-to-consumer site or partnering with third-party retailers as a means to full localization. Many brands who choose to sell their goods via marketplaces often work with an authorized seller to execute this phase of marketplace internationalization.
For more information on how we could support you in developing your international ecommerce strategy, or if you are interested in us becoming the authorized marketplace seller for your brand anywhere in the world please contact us today.
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A top issue we see with brands struggling on ecommerce marketplaces is a loss of brand control due to disjointed sellers—those that aren't following your brand policies and guidelines when selling your products online. Disjointed sellers can be gray market, unauthorized, and rogue sellers, as well as 3P and other sellers that are noncompliant with your branding, pricing, and other forms of representation online.
It can be very easy for brands to lose control of their ecommerce strategy when they can’t get a handle on disjointed sellers. Typically, these brands are either stuck in a game of whack-a-mole or just ignoring the warning signs of bigger issues and hoping for the best. But, when disjointed selling isn't handled right, the consequences can be devastating to profitability. A loss of brand control doesn’t happen overnight, and the factors that contribute to it are long-standing.
Before the advent of ecommerce, brands favored a wide distribution. It was the easiest way to get products to as many distributors as possible. But wide distribution, when left unchecked, leads to leaky distribution—allowing your excess products to end up in the hands of unwanted sellers.
So brands that continue to operate with a wide distribution strategy are losing brand control and are damaging their brand equity and product performance. Why? You’re unable to monitor your products’ pricing, performance, or quality. You can’t dictate how you’re represented by each seller, creating an inconsistent and false representation of your brand to your new and existing consumers. These issues often lead to poor reviews and erode opportunities to build trust with future customers.
In today’s ecommerce landscape, marketplaces and digital platforms connect people and sellers to make online shopping simple and seamless. They also provide customers complete price transparency. Google, for instance, allows consumers to access any of your products on virtually every ecommerce channel and retail location and posts them side-by-side for you to comparison shop.
Now, everyone from your D2C distributors to large marketplace sellers, legitimate 3P sellers, and rogue and unauthorized sellers are on a level playing field—they’re all presented to the searching consumer, and that consumer has the purchase power.
Disjointed sellers have just as much power and authority to represent your brand as you do, without the same quality, pricing strategy, and customer focus as you.
In most shopping scenarios, consumers will choose to purchase a product from whichever seller offers the lowest price. Marketplaces like Amazon and Walmart know this, and optimize their product selection based on all retail offers to serve consumers the lowest price for the same item.
This means that as one seller drops the price of your product, the next will follow, and then the next, etc. Everyone gains access to the product at or below MSRP. This opens the door for unauthorized sellers to purchase inventory during promotions or at discounted prices and then turn around and sell the same product slightly below competing sellers’ prices—for profit.
As customers search for your product, they notice the cheaper price and purchase from the unauthorized seller, rather than paying the price you’ve established with your retail teams. Simultaneously, as Amazon monitors their product listing against other available channels, they notice they don’t have the lowest price. So Amazon, and other marketplaces, in service of the consumer, drop their price to match the lower price offered by an unauthorized seller. To stay competitive, your other channels follow suit. The cycle, also know as the profitability death spiral, continues to drive down the price of your product, grinding away your margins and profitability.
This doesn’t sound like much of a problem if your brand isn’t actively selling on ecommerce marketplaces, right? Unfortunately, it causes big issues for your brick-and-mortar sales, too. Large retail chains like Best Buy and Macy’s noticed this potential loss of sales from ecommerce and needed to defend and protect their profit. Retailers started telling brands that, in order to keep their products in-store (which accounts for 80% of most brands’ sales) they would need to lower their prices to match online prices. Which led to the concept of price matching. If a customer could prove the price of a product was lower somewhere else, Best Buy would match the lower price and charge the brand for the difference.
As other brick-and-mortar retailers jumped on the trend, brands started to see large losses in their margins.
The danger that disjointed sellers pose to brands is enormous—without a way to control all of a brand’s distribution points on ecommerce, your brand spins farther and farther down the profitability death spiral. Using custom technology and data-driven insights, Pattern can identify disjointed and unauthorized sellers for your brand and develop a custom strategy tailored to your specific needs to address these big issues as soon as possible. Then, Pattern partners with the econtrol law firm, VORYs, to enforce take downs and save brands who find themselves caught on any stage of the death spiral.
With the right resources and expert help, we’ve helped hundreds of brands to regain their footing and control on ecommerce, win the buy box, and grow their sales.
Contact us today to regain your brand control.
Join us for Ecommerce Innovators, a podcast that brings together the brightest minds in the industry to explore innovative strategies and trends in global ecommerce. We'll analyze what top brands are doing to accelerate their online success and you’ll hear from top executives who are changing the game for their organizations. Our host is John LeBaron, Chief Revenue Officer at Pattern—the premier partner for global ecommerce acceleration.
In our conversation with John Wessel, CTO and SVP of Product & Digital at Fresh Water Systems, he talks about digital transformation, innovation, and growth. Hear about the many hats John’s wears, how the company has transformed since the 90s to stay cutting edge, the pharmacy part of the business, aligning and prioritizing multiple channels, and competing with Amazon.
Content leads to search ranking. For Fresh Water Systems’ ecommerce site, around 70% of their traffic is to the blog. The secret for content is “well-researched, well-written, long form content that is informative”. John explained that they have an SEO team who writes 5000+ word posts that are researched and documented. People read these blogs and comment, which drives more traffic to the blogs.
Ecommerce is changing the shopping game. John shared an interesting story about a plumber who orders parts every Friday night online, from wherever he can get the best price. He doesn’t have relationships with one supplier or an auto-renew subscription for his parts. Instead, he finds the best price just for the parts he needs every week. John thinks the trend of price shopping will continue, especially as ecommerce grows.
Invest in customer engagement, but don’t invest a lot of time into emails. How many advertising emails do you actually read? Companies often spend a lot of time doing A/B tests and crafting the “perfect” email. However, John pointed out that almost no one reads emails anymore. Instead, invest your time into different brand touchpoints you will have with your customer. You can still send emails, but make sure you dedicate less time to the process.
Listen to the full episode for free on Apple Podcasts, Spotify, or wherever you get your podcasts.
As the leading automotive supplier and long-time brick-and-mortar brand of high performance lighting products, Sylvania was facing challenges to increase profitability on ecommerce. Exclusively available on Amazon and direct to consumer, Sylvania built a strong seller network, with huge market share, but was having issues with compliance and optimizing ecommerce.
As the top ecommerce accelerator, partnering with Pattern provides the expertise and deep marketplace knowledge to identify additional marketplace opportunities for brands, and the strategic teams to effectively launch on global marketplaces. Partnering with Pattern was critical for Sylvania to grow its profitability on and beyond Amazon.
By effectively evaluating the opportunity for new customer growth, increasing profitability, and outperforming competitors, Pattern’s marketplace experts and brand managers went above and beyond to help Sylvania diversify its ecommerce portfolio.
In addition to creating an eBay storefront, Sylvania expanded its products to Target+ and Walmart.com. In some instances, like on Walmart, Sylvania was already available on the marketplace but changed its strategy from a 1P seller model, which has its own challenges and roadblocks, to a 3P partner seller model–naming Pattern as its partner.
Whether it was launching on new marketplaces or shifting its seller strategy to achieve greater marketplace success, Sylvania benefited from Pattern’s relationships with and deep understanding of how to succeed on marketplaces.
In addition, as an ecommerce accelerator, Pattern invests in Sylvania’s product and manages the brand’s entire ecommerce journey on each marketplace. This partnership takes the stress and fear out of launching somewhere new so the brand does not need to understand the nuances, best practices, and details of each individual marketplace.
Not only did Pattern help Sylvania with their simple goal to increase its availability on marketplaces beyond Amazon, the ecommerce accelerator helped the automotive supplier achieve:
Exponential Sales Growth:
97% sales revenue growth YoY from November 2018 to November 2019
151% unit sales growth YoY from November 2018 to November 2019
Flawless Marketplace Growth:
Sylvania has expanded to Amazon, eBay, Target+ and Walmart, all with Pattern’s strategic marketplace expertise and knowledge
Target+ is difficult to get approved to sell on, but Pattern’s marketplaces team and its resources was the necessary advantage to get Sylvania listed
Pattern managed the administrative and compliance logistics to get products approved, listed, and optimized to match other marketplaces
Pattern is also working with Target to redefine categories so they better match Sylvania’s products
Pattern’s customer service team helped Sylvania’s eBay business achieve 100% positive customer feedback
Pattern has the resources necessary for a brand to take control on existing and launch on new marketplaces.
"Pattern is truly an extension of our brand. They know what they are doing when it comes to everything needed for a brand to succeed on marketplaces.”
- Chris Mitchell, Sylvania OmniChannel Analytics Manager
Contact us today to build your game plan for and take control of your marketplace strategy.