Marketplaces like Ebay and Amazon can be a boon for the
bottom line since they present your products to millions of
interested shoppers. But a huge audience also means that
mistakes can be glaring and costly.
Amazon gets something like 21 million visitors a day and
more than 100 million page views a day, according to
StatsCrop. With so many millions of potential buyers
perusing Amazon’s product pages, it is not hard to
understand how the marketplace can be a good channel for
some online retailers. Similarly, other marketplaces like
Ebay, Rakuten, Sears, or Newegg can also be a good sales
channel for online retailers that want to reach beyond a
website or a pay-per-click advertising campaign.
Unfortunately, listing dozen, hundreds, or even thousands
of products on a marketplace can be a serious task that
sometimes leads to expensive or embarrassing mistakes.
Mistake No. 1: Your Prices Are too Low
On Amazon, sellers typically share common product images
and product descriptions. Often the only ways to compete
are with reviews or on price. The latter, selling on price,
is something that a merchant must be prepared to do, but
often a retailer will miscalculate marketplace selling fees,
underestimate shipping costs, or otherwise price an item
Most often this mistake happens when a seller, busy posting
products to Amazon or Rakuten, forgets to include the
marketplace per-order fee in the pricing calculation.
As an example, I recently sold an item on Amazon for $55.96
plus $4.49 in shipping and handling, for a total of $60.45.
Amazon took $9.06 in fees, leaving $51.39. The actual
shipping cost was approximately $7.00 and the item cost $42.
48, leaving a slim $1.91 in profit. This is an acceptable
margin for the product, but I mention it because a week
earlier a competitor had been selling the same item on
Amazon for $49.99. This seller likely had not properly
calculated the selling fee and was losing money.
Mistake No. 2: Your Description or Product Is Wrong
Marketplaces don’t want every seller creating a new listing
for every product. Imagine what would happen if Rakuten
showed the same product 25 times on a product category page.
Shoppers would be confused and sales would decrease.
As a result, marketplaces typically ask sellers to provide
a universal product code (UPC), an international standard
book number (ISBN), or a similar unique identifier. This
number is used to associate several sellers with a single
If there is an error in the code or a marketer accidently
associates a product with the wrong code, a huge problem
For example, I’m aware of a retailer that added a listing
on Amazon using a script — for a single, chain-link panel.
The retailer had been selling the chain-link panel for
years and had a UPC associated with the panel in its
database. An automatic listing script dutifully compared
UPCs and adding the product to Amazon. But UPCs are not
always constant, and the manufacturer had changed this one.
As a result the retailer’s single, chain-link panel, which
sold for $79.99, was associated with a 10-foot by 15-foot
chain-link dog run that sold for almost $400.00.
The retailer sold more than a dozen of the “dog runs” in
moments, creating a customer satisfaction nightmare. This
is certainly a mistake that you’ll want to avoid.
Mistake No. 3: You Mismanaged your Inventory
Inventory can be a source of frequent mistakes for
retailers selling across several channels, including
The problem usually arises when retail marketers or
managers don’t allocate inventory to a particular sales
channel or don’t have a good, near-real-time inventory
Imagine that a retailer has an online store, a small
boutique in a strip mall, and is selling on the Sears
marketplace. If that retailer has five widgets hanging on
the shelf in the physical store, but also has those same
five widgets included in its website’s available inventory
and in the Sears marketplace’s available inventory, it is
possible that the retailer will sell more widgets than are
actually on hand.
This means that a customer somewhere won’t get the widget
she was expecting. She might never purchase from that
retailer again and the Sears marketplace might even prevent
the retailer from listing items in the future.
The best practice here is to allocate inventory to each
channel. Hang three widgets on the shelf in the physical
store, and make one widget available in the online store
and in the marketplace. When a widget is sold, it is easier
to reallocate than it is to deal with an upset customer.
Mistake No. 4: You Missed a Marketing Opportunity
In addition to the direct sales that they generate, online
marketplaces like Ebay, Newegg, and Amazon are also a good
way to market to new prospects and potentially build
lasting customer relationships.
A study from Adobe indicated that customers who return for
a second purchase typically spend three times as much as
first-time buyers, and customers who return to make three
or more purchases typically spend five times as much as a
first time buyer. Given this data, it is important to
encourage shoppers to be loyal and return for future
Online merchants selling through marketplaces often make
the mistake of missing marketing opportunities.
When you sell something on Ebay, for example, include a
coupon in the box for a future purchase on your store
If you make a sale on Amazon, which restricts in-package
marketing, consider sending a postcard as a follow up. That
postcard might thank the shopper for the order and let her
know that you have a website too.
Armando Roggio is contributing editor for Practical
Ecommerce. He has 15 years of Internet and marketing
experience and, in addition to his work for Practical
Ecommerce, works as a consultant and web developer.
You can contact Armando at: armando at practicalecommerce.com