As an e-commerce manager, entrepreneur, or brand owner, you often face crucial decisions. For instance, when it comes to selling and advertising on online marketplaces like bol.com, Amazon, Zalando, etc. Do you handle it internally or outsource it to a specialized agency? The right choice can have significant consequences for your business and sales success. In this white paper, we provide a detailed overview of the pros and cons of both approaches, so you can make an informed decision that best suits your situation.

Who should consider outsourcing?

Outsourcing marketplace tasks can be a good idea in many cases. Here are the most common reasons to engage a specialist for working with marketplaces:

1. If you're new to marketplaces: Outsourcing can be a smart move when you're new to this area. Setting up an effective presence on marketplace platforms requires expertise and experience. A specialized agency like Brandsom can help you get started quickly and avoid pitfalls.
2. If you're already selling on marketplaces and want to expand: When you're already selling on marketplaces and want to expand your presence to new channels or markets, outsourcing can increase growth potential. An agency with specialists can help you quickly and efficiently exploit new opportunities.
3. If your focus is on product development and innovation: As a brand owner, you might prefer to focus on developing and improving your products. By outsourcing marketplace work, you can spend your valuable time and resources on your core activities, while experts handle the complex world of online marketplaces

Who shouldn't outsource?

Outsourcing is less suitable if you have a limited budget, for example, as a startup entrepreneur. Outsourcing marketplace activities can involve costs. If you're just starting out and financial space is limited, it might be wiser to start selling yourself. As you grow, you can still consider outsourcing later.

Different ways of outsourcing

Within the realm of marketplaces, we identify two main approaches to outsourcing: the 'Merchant of Record' approach and using your own sales account. We delve into the methodology and discuss the pros and cons of both approaches:

Merchant of Record

With the 'Merchant of Record' approach, a brand sells its products through the sales account of a third party. While this approach offers speed and convenience, there are also some important considerations:

1. With a Merchant of Record service, you can go online immediately. You don't have to wait for often lengthy KYC and IT integration trajectories. For this reason, Brandsom offers this service for selected marketplaces.
2. You don't build your own sales accounts, meaning you're dependent on the third party's infrastructure.
3. You have less access to valuable consumer data, which can limit your insight into your customers.
4. You have much less control over aspects like sales prices, content, marketing, actions, and promotions, which can affect brand consistency.

Your own sales account

Choosing to set up your own sales account means building an online reputation, having direct access to customer data, and full control over your presence on the marketplaces. However, it also has its own set of pros and cons:

Pros of your own sales account:

1. You build your own online reputation, strengthening your brand identity.
   You have direct access to valuable customer data, aiding in understanding and serving your target audience.
2. You retain full control over the marketplaces, including the ability to adjust sales prices, product information, and marketing strategies.
3. You have the freedom to present your brand and products exactly as you want, contributing to a consistent and attractive brand experience for customers.

Cons of your own sales account:

1. Setting up your own sales account requires financial investments and can be challenging, especially for startups.
2. You must manage the financial system setup yourself, which can require expertise and effort to ensure everything runs smoothly.

The choice between these approaches depends on your specific situation, goals, and available resources. Understanding the differences between the 'Merchant of Record' approach and using your own sales account can help you make an informed decision for your online marketplace strategy.

At Brandsom, we offer both solutions, so you can start selling on Zalando using our own sales account. Once you have everything in order internally, we can transfer the account.

Pros and Cons of outsourcing

Brandsom is happy to assist you with selling on online marketplaces. However, we understand it's not the best solution for everyone. Therefore, we list all the pros and cons of outsourcing, so you can weigh what's best for you and your business.

Pros of Outsourcing:

1. Access to people when you need them: When launching new products, expanding to new channels, or responding to seasonal changes, it's crucial to have access to experts. An agency like Brandsom provides you with a whole team of specialists available when you need them.
2. A team of specialists for a fixed monthly fee: Hiring internal specialists can be expensive. Outsourcing gives you access to a complete team of experts without the costs of employing individual staff members.
3. Up-to-date with the latest marketplace developments: Marketplaces are constantly evolving. Our employees are always up-to-date with the latest developments.
4. Less risk than an in-house team: Setting up and maintaining an in-house team involves financial and operational risks. Outsourcing can be a more cost-effective and less risky option.

Cons of Outsourcing:

1. Knowledge transfer: To work effectively together, we need to be familiar with your brand and products. Therefore, it's important to have a good onboarding process.
2. Investment from both parties: To be successful on marketplaces, investing in content, marketing, operational performance, and a solid launch plan is crucial.
3. Limited physical presence: Internal team members are often physically present in your company. Working with an external agency may also involve physical presence, but it will often be more limited in practice.
   

Is outsourcing marketplace activities right for your brand?

The decision to handle marketplace activities internally or to outsource depends on your specific situation and goals. For brands that are new to marketplaces, looking to expand, or wanting to focus on product development, outsourcing to a specialized agency like Brandsom can offer significant advantages. You gain access to expertise, specialists, and the latest developments, while at the same time avoiding the risks of setting up an in-house team. On the other hand, if you have a limited budget or already have a well-functioning in-house team, internal management may be the right choice.

We hope this overview has helped you understand the pros and cons of both approaches. If you're considering outsourcing marketplace activities, we invite you to contact Brandsom to discuss the possibilities and discover how we can support you in maximizing your online sales success.

Contact us by calling +31(0)30 227 05 20 or send an email to contact@brandsom.nl.