Marketplaces: are they worth the operational headache?

Tobias Buxhoidt
12 June, 23

As consumer behaviour shifts and we see a growing concern for the adverse environmental impacts of the retail sector, brands of all sizes must make every effort to stay ahead of their shoppers’ demands whilst being wary of the consequences such changes have on their day-to-day operations. One such trend is the increase in businesses implementing their own online marketplaces to resell returned, out of season or faulty products at a discount.

A report from Forrester released last year predicted that as much as two-thirds of global B2C e-commerce will come from online marketplaces this year so it’s no wonder major retailers are jumping at this trend. The advantages of these online marketplace integrations are clear: further product amplification whilst also reducing the volumes of products thrown away. This is a clear coming together of something good for the planet, good for shoppers and good for retailers.

Yet, as with most new retail trends, the operational implications of changing how consumers interact with a business come at a cost. This is not to say that retailers should not adopt marketplaces or, more broadly, be responsive to their consumer demands for more sustainable practices. Rather, it is to say that retailers must implement the best possible operations practises first, facilitating a more efficient and customer-friendly integration of new shopping tools like marketplaces. The question, is how?

Marketplace headaches

Given the process of reselling items can come with logistical uncertainties, especially when it comes to product quality, retailers must have a robust inventory management system in place to take control of their operations. Keeping track of inventory levels and having a system in place to automatically update product listings as items are sold are key. This alleviates stress on staff ensuring product checks can take place efficiently. It also ensures customer service employees are as informed as possible concerning what is in stock and what is not such that they can respond to queries with accuracy and in a timely manner.

Next, everything that comes through an online retailer’s marketplace must be controlled by the brand itself, so that any potential issues with products can be managed. This necessitates a rigorous quality check process, in particular when dealing with products that are being sold as damaged, so the consumer knows what the quality of the item is when they make the order. Failing to conduct these checks can be detrimental to businesses – dissatisfied customers can leave negative reviews or warn friends about poor quality on a marketplace. It should be a brand’s priority to avoid such situations by taking responsibility for all operations procedures.

Operations led solutions

One principle retailers should always stick to when embarking on a new operational challenge, such as the integration of a marketplace, is how the customer can be put first. Clear and transparent customer communications should come immediately to mind when thinking about this principle in action, but there’s even more emphasis on the importance of this when the customer journey involves an online marketplace.

Clarity on returns policies, as well as assurances on the quality of products being sold, will go a long way – as will effective customer information and enquiry processes to help iron out any potential issues that arise.

Another potential issue brands should be aware of is ensuring their website is set up to deal with increased traffic, and order processes and policies are clear between the conventional first-hand products and the marketplace. Ensuring website infrastructure is structurally and technically sound enough to deal with the increased volumes of visitors is important to make online marketplaces more accessible for consumers and lower the potential of technical issues further down the line.

Though online marketplaces have challenges, these can certainly be overcome by implementing sound operations procedures to meet consumer demands around sustainability, convenience, and purchase options. In the short term, using an online marketplace can increase the visibility of available products and therefore result in an increase in sales. But for savvy retailers who are looking ahead to the long-term, it also allows improvement of their environmental and sustainability practices by offering the opportunity to host a wide variety of pre-loved goods.

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