Nowadays, small businesses and large enterprises go to the digital space to grow their brands. Merchants explore online marketplaces in particular because of their popularity among consumers, and how easy it is to set up. Plus with the help of E-commerce enablers in the Philippines, managing operations becomes even more efficient and hassle-free.
Online marketplaces present many opportunities to merchants, especially for growth and expansion. If you’re still not sure about what’s in it for you or how you can benefit from them, here’s a list of pros and cons that can help you decide.
PRO: You can reach more customers.
Many Filipino consumers have embraced online shopping. They have become more reliant on different online marketplaces for personal, work, and even home essentials. If you already have a website where you sell your products, taking them to online marketplaces will help you reach more customers. Similarly, it can potentially increase your chances of making more sales.
CON: Competition is tighter and more fierce.
Because more customers are now online, more businesses have also built their presence digitally. By selling your products at online marketplaces, you risk facing intense competition, especially from bigger and more established brands.
PRO: Operational costs are significantly lower.
Selling at online marketplaces saves you time, money, and effort. Because everything’s virtual, you no longer need to worry about leasing commercial spaces in malls and shopping centers. That’s money you can definitely put into your business capital and the production of your goods.
CON: There are other costs like advertising and commissions.
Stiff competition means you need to be smart and aggressive with your marketing. While costs may be significantly less, this is an out-of-pocket expense that you need to be prepared for to keep up with your competitors. You may also have to make your prices higher, especially when working with E-commerce sites that charge commissions for their platforms.
PRO: Safety of personnel and quality of products are maintained.
Selling at online marketplaces means there is minimal physical interaction. This allows you to keep your employees, yourself, and even your customers safe, especially with the ongoing pandemic. You can also maintain the quality of your products since you can limit who handles them, making sure that customers receive them at their best.
CON: Prone to cyberattacks, security issues, and fraud.
The digital world presents so many possibilities, but with it comes its own set of risks. While you can place security measures for your shop, you need to remember that you may be exposed to different cyberattacks like hacking and fraud.
PRO: Customer feedback can help boost sales and referrals.
What’s nice about online marketplaces is customers can leave positive feedback. Even better, the popularity of online marketplaces means many more potential customers can read those reviews and push them to make a purchase. They can also use these reviews to refer your shop and products to friends, creating more opportunities for you.
CON: Customers can also leave and see negative feedback.
Feedback is a two-way street and you may encounter negative ones as well. Unhappy customers can be unforgiving with their comments and having these may turn off potential buyers. Service recovery is key to dealing with this situation, which will also help your other customers see how you tried resolving the issue.
PRO: A new platform for more brand visibility.
Looking to expand your business beyond selling on your website and social media channels? Online marketplaces are good options, especially if you don’t have the budget for another branch or more people. More than being cost-efficient, it gives you more visibility because everyone’s online now. You just need to be smart with your marketing to reach your target audience.
CON: It’s another thing to manage apart from your operations.
If you are not tech-savvy, navigating online marketplaces may be a challenge. Apart from managing your day-to-day, running an online store also requires your commitment to responding to inquiries, addressing issues and concerns, promoting the business, and so much more.
Selling on online marketplaces can be a lot to take on. Luckily, there are E-commerce enablers in the Philippines that make it more manageable, like Payo!
Payo can help merchants like you penetrate online marketplaces locally through their Marketplace Optimization solution. It has Marketplace Solutions that can transform your store to be user-friendly and purchase-ready. Payo also has Logistics Solutions to optimize your operations including Warehousing, Fulfillment, Last Mile Management, and Live Customer Support.
Want to sell your products on online marketplaces? Sign up with Payo today or send us a message at [email protected]. Let’s take your business to the next level!