"An online marketplace is an ecommerce site where third-party companies can sell their products or services to consumers. All of the transactions are processed through the website owner." - Beth Hendricks, Study.com
Online marketplaces are a great platform on which to sell your products. If you already have an online store, it is an additional channel in which to reach new customers and form new trading partnerships. If you are new to the ecommerce space and are exploring your options, then selling on marketplaces might be a consideration. Not only do you not need to set up your own store, but you will also have low start-up costs with an added level of trust from customers.
So what are your options in South Africa? What will it all cost? Let’s break it down:
There are two types of free marketplaces in South Africa: classifieds and commission-based:
Classifieds. Gumtree, OLX and Facebook are examples of free classifieds sites. You can advertise your products for free, but selling, shipping and payment processing becomes the responsibility of the seller.
Commission-based. Some marketplaces, like Sell-SA, Jumia, Localized, SA-Marketplace, Fruugo, PriceCheck and Makro, allow you to list your products on their sites for free, but charge a commission fee on all products sold (or for PriceCheck, you pay a small fee per click). Additional fees that are often charged are payment processing fees or a pay-out fee.
2. Monthly fee
Marketplaces often have a monthly fee that sellers need to pay to list their products. Some even have different pricing plans to choose from, depending on the number of products you’d like to sell or the add-ons you require. Hello Pretty, Takealot, ShopStar and Zasstra fall into this category. Some of the marketplaces that charge a monthly fee also charge a small commission fee, so it is important to check the pricing policies first.
Also in this category is a marketplace like AutoTrader, but instead of charging a monthly fee, they charge a flat rate for four weeks of using their platform.
3. The exceptions
Some marketplaces do not follow a pattern and have completely individual fee structures:
- bidorbuy is one of these marketplaces. They have a rate card which charges the seller fees on success, listing, final order and enhancement; each seller will have different fees.
- Utique and OneDayOnly are also marketplaces with an exception: if you would like to sell on either of these sites, you must apply and each application is reviewed and costed individually.
These are, of course, not the only marketplaces in South Africa, but they are the most common. According to WebRetailer, Takealot and bidorbuy are the two largest online marketplaces in South Africa and even in the Top 5 largest marketplaces in the whole of Africa. For the sheer size of their reach, selling on Takealot or bidorbuy will give your brand maximum exposure.
You need to look at your products and at your target market, your budget and your advertising needs and take your pick of marketplaces from there - Takealot is a more expensive venture than bidorbuy, but it may be worth the investment. A trial run on a free marketplace, like Gumtree, is always a good idea to learn the in’s and out’s. Bear in mind that some sites might have strict terms & conditions, branding limitations or “hidden” (or less obvious) costs that you need to look out for, so read the pricing policy and their Terms & Conditions very carefully.
A trend that has emerged from the past few years is the development of a greater number of smaller marketplaces. Many small-scale vendors are banding together to create their own marketplace websites - much like what a Saturday morning farmer’s market would look like if it was moved online. WordPress’s Multivendor Marketplace Solution plugin, a free marketplace solution, has made the set-up process available to every layman without the hefty price tag. Combined with uAfrica’s "Multiple Sender Addresses" feature, it has never been easier - or simpler - to get a marketplace up and running.
Regardless of which online marketplace you choose to sell on, these platforms have benefits that far outweigh the negatives. It simply gives you access to a whole new customer base that you might not have if you focus solely on your own online store. Your online store also gets great exposure through a marketplace - more so than what you may get running your online store independently.
It might not be your thing, but it’s definitely worth the shot.