Up Amazon Creek Without a Paddle? How Brands Can Navigate the Digital Marketplace


It’s no secret that navigating the complex world of digital marketplaces can be daunting for brands. Charlotte Sweet from the marketing department sat down with Brian Cassidy, Chief Information Officer of DCC Technology EMEA, to ask for his thoughts on the challenges brands face and strategies for success in digital marketplaces.  Brian has over 20 years of experience across various industries in North America and Europe, so he had a lot of useful insights to share.

Can you tell me what a digital marketplace is?

A marketplace is a place where independent buyers and sellers come to trade with each other. Traditionally, they were physical places, sometimes taking place in the town square, and they’d happen on weekends or on an ad hoc basis. In the digital world they are websites, but they honour the spirit of independent buyers and sellers who trade with each other, where the marketplace is just providing the digital infrastructure for the seller to show up and sell their wares and for the buyer to access multiple sellers from the same location.

Why are digital marketplaces important?

In terms of online sales, there’s been a significant consumer shift towards marketplaces, partly because it allows for buyers to aggregate sources of products and partly because sellers have no choice but to go where the buyers are.  So if you are a customer, you go to Amazon or eBay because that’s where the best selection is: you can compare lots of different options in one place and make a purchase.  If you are a seller, you need to be on Amazon, eBay et al. in order to get access to those customers.

How are those marketplaces evolving?

They’re becoming bigger and the categories that they offer are widening.  While each marketplace typically started off life quite narrowly focussed serving a particular market niche, many now tend to offer a much wider set of product categories and services. And because marketplaces have gotten bigger and more dominant, they can afford to invest in user experience (UX) to make their customer’s journey seamless. As a result, customers are more likely to go to a digital marketplace because they’re getting a better overall experience there versus on a traditional branded product’s own website, and this is especially true when there isn’t one dominant industry player in that particular product category.

Can you expand on why these marketplaces are preferable to a brand or retailer’s own websites? 

As digital marketplaces primary investment is in their user’s online experience, in many cases they create a much better user experience than a brand’s own website. For example, imagine the level of sophistication and resources a company would need in order to replicate the same level of customer experience as Airbnb or Etsy. In addition to displaying the most suitable product or service that is readily available, the seller would need to provide product and seller reviews, high quality product images and localised content and a wide variety of payment methods and financing options. Even the bigger brands find it difficult to compete with the level of sophistication that marketplaces offer. Added to that, if you start your journey as a customer on a search engine, you will more than likely be led to a marketplace rather than the brand’s own website this is due to the search engine optimisation and pay per click advertising that marketplaces employ, and the amount of marketing money and sponsored ads they put into it: the difference in the scale of investment each are putting in is often vast.

What do you see as the challenges for brands in accessing and performing on marketplaces?

Marketplaces are designed to be excellent places for consumers to purchase. It’s not quite as easy to be a seller on a marketplace, as each marketplace comes with its own complexity and nuances. There is an art (and a science) to generating the right collateral and product specifications, in the right languages, image specifications, etc. – achieving and maintaining a good seller rating can be difficult, and having your distribution in a way that makes you preferred by a big marketplace can be expensive, especially if you want to sell across multiple countries.  You need to have the stock in the right place at the right time, and at the right price, in addition to an ability to deliver quickly and do it with high confidence that it will be delivered on time. There are high penalties for your seller rating and financial penalties levied on you from the marketplace if you get it wrong. Moreover, being able to consistently respond to customer queries within the target time set by the marketplace can be difficult, and being able to challenge marketplace fees if you don’t think they’re appropriate requires a level of digital systems sophistication, as does being able to provide the right documentation as you ship products into the marketplace or direct to the consumer.

Is there a difference between established brands and challenger brands?

Challenger brands are showing an ability to operate nimbly on marketplaces to respond quickly to customer demand, seller rating, marketing collateral requirements, price, stock availability and at the right place. Traditional brands can find it hard to compete with that level of agility.

What are the difficulties for brands when transacting on marketplaces?

One major difficulty is managing the price in real time, because it can change; you have a concept of “buy box winner”, whereby, if there are multiple sellers of the same product on one marketplace, the marketplace will select and suggest the seller you buy from, and that seller is known as the “buy box winner”. However, sellers need to keep an eye on the price because if they are being undercut, they will not sell anything. The second is inventory – having the right inventory at the right place at the right time; that feeds into your price as well, because you could have a higher price but still win the buy box because nobody else has inventory in that region.  To give an example, you may be offering a product for sale in Italy, at a less competitive price than the same product listed in France, but the marketplace promotes you as you are closer to the customer, so you get to sell it at a higher price in Italy.

How can Exertis Supply Chain Services help vendors or brands on marketplaces?

In summary, Exertis Supply Chain Services (ESCS) provides tools to allow brands to aggregate and automate marketplace listings, sales and fulfilment. You can list once with ESCS and we will take care of the sale and fulfilment on your preferred marketplaces, in the countries you want to list. ESCS will represent you as the merchant of record, and we will deal with marketing logistics, inventory, price and so forth, leveraging our skills, competence and our system capabilities, and you will gain access to real-time views of your product’s sales and inventory levels across the various markets we serve.

If you have further questions on this subject or other supply chain topics, don’t hesitate to contact us by using the contact button below!

To learn more about any of our offerings or to arrange an appointment with a member of our sales team please get in touch.