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E-Commerce Technology Basics: Part Two – Comparison Shopping Engines and Marketplaces
You can’t be an online retailer in Australia (or around the world) and ignore comparison shopping engines and other virtual marketplaces, writes Nathan Huppatz.
Virtual marketplaces like Amazon and eBay have always been ‘big players’ in the e-commerce space. eBay has a dominant position in Australia and can’t be ignored for many retailers. Amazon allows 3rd party sellers (read: you!) to list items on their platform, and we are seeing more Australian businesses listing products on Amazon in the US, Canada and UK.
Comparison Shopping wasn’t huge in Australia four or five years ago, but with the growing maturity of our e-commerce market, strong players like Getprice and Shopping.com grew, followed by a range of others.
So lets take a look at both marketplaces and comparison shopping, and where they should be placed in your strategy.
In Australia, eBay dominates. With around seven million visitors per month it offers sellers a very large buyer base who are actively looking to purchase products each and every day.
Quicksales is the other alternative in Australia, but is far less active than eBay. Then there is Gumtree (free classifieds, owned by eBay) used more by individual sellers of single items.
Amazon is making their presence felt in Australia too, with their business development team reaching out to Australian sellers, asking them to consider listing on the US marketplace…
So should you be selling on eBay/Amazon et al? How do you do this and manage sales?
The short answer is most SMBs shouldn’t look past the opportunity of getting on front of that many customers. Especially on eBay Australia, more and more retailers are joining the fray, and seeing good results. Although eBay is still a very price sensitive market (we once dropped pricing by 20 percent to see a turnover growth of 600 percent!) brands can still have a professionally branded store front and presence on the platform. Look through the eBay Fashion Gallery for some nice store examples.
Some popular (and powerful) systems can integrate with eBay/Amazon and other marketplaces. ChannelAdvisor is the most flexible, also connecting with other European and US marketplaces, and new even TradeMe in New Zealand. MyOnlineBusiness offers ecommerce storefronts with eBay integration, as does BigCommerce and of course Magento.
eBay and other marketplaces may charge a listing fee and a ‘final value fee’ (or ‘success fee’ on sale completion). Expect to pay between 10 and 17 percent in fees on eBay, Amazon and similar platforms.
These systems will manage inventory, sales and often templates and design for you as well. I should know, I wrote the book on eBay, and have built a number of large eBay businesses using Magento and ChannelAdvisor. It works!
Getting your products (and your brand) in front of people is a challenge when you get online. Getting on to a marketplace can help, and give you instant sales (although maybe at a low margin). But when you don’t have much SEO, and Google Adwords is still a dark art and expensive to you, the comparison shopping sites are a great option.
Comparison shopping sites operate on a cost-per-click (CPC) basis, and each site might have different fees, often different per product category. Expect to start paying about 30 cents per click.
Ideally, your e-commerce platform can generate a ‘feed’ of products for these shopping comparison sites. And there are a few sites to choose from. The most popular ones are:
Don’t freak out if your software only generates a feed in one format (e.g. Shopping.com) as most of the other sites can accept each other’s feeds. Just ask the question.
And now too, Google has introduced Product Listing Ads. Google’s Shopping section used to be free, but is now CPC. It is a little more complicated to set up, as you need to submit a feed of products (like the comparison sites mentioned above) to Google WebMaster Central and then link your Webmaster Central account to your Google Adwords account, then set up a Product Listing Ads Campaign. Phew!
Once your items are live on the site though, you should start receiving traffic.
Tips and Tricks
Do some research before selling on eBay or Amazon. You have be great at customer service, and know how each platform works. eBay especially has a lot of variables, including auction stypes, store types, fee structures, ‘bestmatch’ search and feedback to learn about. Buy a book (see mine, or Todd Alexander’s titles) and visit a conference like internetconference.com.au (which has a lot fo eBay specific content, from beginner through to advanced).
For the comparison channels, each site can offer different value, based on the items that you sell. Try the main ones first (Getprice, Myshopping, Shopping.com). Try only submitting items in your feed above a certain value (e.g. $30 – you don’t want to pay 30 cents per click for a $2 item!).
Also, ensure you measure your profitability. Use software like Google Analytics to measure clicks and conversions from the comparison sites. know your margins and cost per sale. And try calling their customer support to see if they can offer some feed improvement advice, or maybe even better pricing.