Selling through wholesale marketplaces

The wholesale marketplace model is increasingly available online and is starting to catch up. In this day and age, wholesale marketplaces are becoming more important for B2B success. In this article, you’ll learn more about wholesale marketplaces.

Contents:

• What wholesale marketplaces are
• What you can find on wholesale marketplaces
• The difference with the third-party marketplace model
• What the future will look like for this sector

Are you interested in more information about selling products via wholesale marketplaces? At Brandsom, we offer a wide range of marketplace related services that could benefit your sales on marketplaces. Would you like to benefit from our services? Please click on the arrow below and get in touch with one of our specialists. 

What are wholesale marketplaces?

Wholesale refers to the business of selling goods in large quantities, usually for resale purposes. It is the process of selling products to retailers or other business customers. Since B2B customers buy the products in large quantities, prices per product are lower. In the past, these wholesalers were mostly physical places. However, in today’s world, it is all about selling products online and providing digital services to the market. Therefore, more and more wholesalers are switching to the e-commerce model.

Due to the pandemic, the wholesale sector was forced to take a new path. Because distance selling was and still is necessary, the wishes and needs for an online sales channel increased. This offered opportunities for both the wholesale sector and retailers.

Another reason for the growth of wholesale marketplaces is that other large marketplaces such as Amazon and Alibaba sell products in bulk to business customers. In the Netherlands, Bol.com is a well-known platform. A wholesale marketplace that operates in a certain niche can also position itself as an expert in the market, and thus create more turnover without being snowed under by bigger competitors.

What is sold through wholesale marketplaces and when do you use them as a seller?

There are various factors to take into account when you’re thinking of selling through wholesale marketplaces. Firstly, find out what your business’ strong points are and take a good look at the industry you’re active in. Additionally, ask yourself which markets seem promising.  

The most important player in the United States at the moment is Alibaba. The Chinese marketplace has become a popular platform for companies. Drop-shippers, in particular, benefit from the cheap goods that Alibaba offers in bulk. Recently, however, Amazon has also taken cautious steps into the wholesale sector. The Amazon Professional Beauty Store, which launched in 2019, is aimed at supplying products to salons. Since then, Amazon has been working hard to get wholesalers to sell online and use Amazon as their business marketplace.   

eBay is also keeping a close eye on the trend in the wholesale marketplace sector. The company recently collaborated with BULQ, a liquidation company that offers unsold or returned goods to companies or resellers. BULQ has had its own marketplace since 2015. They noticed that many of their buyers and sellers were also quite active on eBay.

Ultimately, it all depends on what you sell and where you can find your customers. If you’re not familiar with the wholesale marketplace model and would like advice, our Brandsom consultants have extensive knowledge and experience with helping brands sell on (wholesale) marketplaces. We specialise in marketplaces and offer a wide range of marketplace related services that will benefit your sales on various platforms. Would you like to benefit from our service? Click on the arrow below and get in touch with one of our specialists! 

The differences with the third-party marketplace model

The wholesale marketplace model has similarities with third-party marketplaces such as Bol.com, Amazon and Zalando. However, there are also many differences between the two. We have listed some of the main differences below.

#1 Online versus offline

Platforms have been around for a long time. Due to social developments, physical locations are becoming less important. Online platforms sell to business customers, but without a large warehouse. This makes ordering products easy for business customers because they don’t have to go to a shop somewhere in an industrial area, which saves time. Another reason that third-party marketplaces are very popular is that they offer a lot on their platform without owning the product itself.

#2 Interaction versus transaction

The priority of traditional businesses is to sell as much as possible. Platforms focus on the best match between consumers and producers or sellers. The more consumers there are on the platform, the more sellers there will be. Marketplaces call this the network effect. The number of interactions is seen as a USP of the platform.

Valuable information is obtained from the data, which sellers can in turn use to sell their products. A good example of this is reviews. How can you benefit from this as a retailer? The more positive reviews you get about your product, the more customers will come back to you. Those reviews are achieved through good interaction with the customer.

#3 Customer experience over conversion

For Amazon, it does not matter what product they sell, as long as the customer had a pleasant experience during the purchase process. Due to the fact that a brand or retailer can sell its products relatively easily on Amazon, they have a wide range of products and are more likely to offer the most relevant product.

Traditional retailers, on the other hand, are product-first: they have products in stock that have to be sold, with the margin being the leading factor. In addition, consumers can’t always find out what other people's experiences are with the product. The platforms encourage providers to improve the customer experience and their offerings. A good customer experience ultimately leads to conversion. Transparency certainly contributes to this, and that is what is being overlooked by traditional wholesalers.

#4 Stock versus Direct-to-Consumer

Traditional wholesalers keep a lot of stock, which in turn brings a financial risk. Online marketplaces offer products that the retailer or brand itself ships. A commission is paid to the marketplace for making the sale, but the marketplace itself does not need to keep stock and therefore has no inventory risk. As a result, a marketplace can scale up with relative ease and offer a wider range of products without having to open an additional distribution centre.

The future of wholesale: what will it look like?

The traditional wholesale business is expected to disappear gradually. The new wholesale marketplace model will only grow in the foreseeable future. Together with the rise of large marketplaces, more and more niche wholesale marketplaces are emerging. These focus on a particular industry, making it clear to the business customer where they can go.

Online wholesalers are observing how the large marketplaces deal with customers. Many e-commerce companies can teach B2B companies a lot when it comes to using e-commerce shopping apps. This has helped the consumer market with online growth and app-based purchases. With this process, the focus should also be on customer experience (CX), detailed product information, image optimisation, and social selling. Additionally, a sales team needs to be dedicated to serving the online channels. This approach caused a shift in mindset for B2B salespeople.

Are you looking for a successful way to sell through wholesale marketplaces? Get in touch with Brandsom for a no-obligation consultation

Are you a B2B seller and looking to sell through wholesale marketplaces? Contact Brandsom for more information regarding the possibilities. Mail to contact@brandsom.nl or fill out the contact form to get in touch with one of our specialists. You can also call us at 030-2270520.