Ecommerce selling strategies: Leveraging online marketplaces for your DTC
Learn how to scale your DTC channel and mimic your digital shop experience using online marketplaces.
Nowadays, 50% of everyday fashion purchases happen on marketplaces. Consumers no longer choose Google search first – when they want to make a purchase, they start with Amazon. With a growing amount of users, competition grows as well. Amazon has close to 2 million sellers and is just one of many marketplaces in existence. That is why you need a great strategy in order to grow your DTC channel with marketplaces.
In this guide, we will explore the various strategies and tactics you can use to expand your DTC business by leveraging the reach and audience of online marketplaces. We will be focusing on Amazon in particular. It has the leading ecommerce market share in the US and many other countries. Amazon is the benchmark for all the other marketplaces, and they’re trying to mimic its experience, benefits and strategy.
Why do you want to be present on online marketplaces?
Direct-to-consumer (DTC) retail model is growing in popularity as it brings brands closer to their customers and allows them to communicate and interact directly, strengthening relationships and gaining a better understanding of who is buying their products and why. Marketplaces are among the most popular selling strategies for DTC. Our recent report shows that 50% of fashion sales are happening on marketplaces.
Which marketplaces suit fashion brands?
Not all marketplaces are suitable for your brand. Some of them cater to specific niches – Barnes and Noble is the go-to place for books, and Newegg is where people buy electronics. Others, like Wish, have dubious reputation and may not be a great choice for luxury brands. To maximize profitability on online marketplaces, it's essential to first identify the platforms that are the best fit for your brand.
First of all, find your goal, do you want to:
use the marketplace to enter a new market?
reach new customers on the current market?
build your brand’s recognition?
test the demand for your product on the new market?
You may have other objectives as well.
With your goal in mind, do the due diligence and make your choices. You have two main categories to choose from:
Big, general marketplaces (Amazon)
Niche, online marketplaces (Zalando, Farfetch, ASOS)
Each marketplace also has distinct requirements, product categories and target audiences. You want to go through them all and see how they match your brand and your goal. Take your time to conduct proper research beforehand. Take into consideration:
The size of competition on the marketplace,
How well the audience fits your ICP,
How much you’re ready to invest,
What is the marketplace's reputation? Does it play well with your brand?
In which country or countries you want to sell
If you can fulfill the marketplace’s rules perfectly.
Keep in mind
There are more than 160 online marketplaces that you could potentially leverage to reach new customers. You can enter any new market with the most popular marketplace and gain instant trust.
You can’t go after all of them at once. Determine which channels are best for your brand, and allow yourself to fail. There are a lot of other spaces to enter if the first fit wasn't the best.
There are a lot of marketplaces to choose from, and it might seem overwhelming. That’s why we’ve created this list of the marketplaces specifically most suitable for fashion brands:
Competition in marketplaces
Today’s marketplaces offer easy access to a wide customer base. This is a low-hanging fruit that can bring tens of thousands of new sellers each year. Competition in marketplaces is very strong – there were about 2 million sellers on Amazon in 2021. That’s why only a small percentage of newcomers make it through the first year.
There are three types of sellers:
Resellers – They purchase products from other manufacturers and resell them on the marketplace.
Private label brands – They take already manufactured products and add their own branding to them, potentially giving them a slight design twist to make them different.
Brands – They create their own products from scratch with the goal of solving a consumer problem.
Brands have an advantage on marketplaces because they are focused on acquiring customers, not just selling a product. Private-label brands and resellers may not prioritize the consumer journey as much as brands do. If you want to succeed, you need to play to your strengths and make sure the marketplace can mimic the experience of your physical shop.
The ever-growing benefits of joining an online marketplace
As online marketplaces continue to gain popularity and drive online sales, they are constantly finding new ways to improve the customer experience. This means marketplaces will make it as seamless as possible for brands and retailers to market, sell and fulfill orders. The more user-friendly the platform is for sellers, the better the experience for shoppers, which increases the likelihood of customers coming back. This is reflected in several significant benefits.
New customers quickly and at low cost
Utilizing online marketplaces can be an effective strategy for generating income and establishing a strong brand presence. Marketplaces offer fast launch times, streamlined processes, and protections against the risk of unpaid bills, fraud and disputes.
For established market players, marketplaces provide great testing grounds for new products with less risk. They are also an inexpensive and successful way of expanding sales internationally.
Effective ecommerce platforms like Centra allow you to enter the marketplace within days. You can use product feed exported from Centra or use an API to integrate with any marketplace.
Keep in mind
There’s another important benefit to using a multichannel sales strategy. By diversifying your selling channels, you’re securing your income.
Partner programs for sellers
The leading online marketplaces offer partner programs to ease the marketing process (e.g., Amazon Advertising, Zalando Marketing Services (ZMS), Google Shopping Actions), as well as selling and fulfilling orders (e.g., Fulfillment by Amazon (FBA) andZalando Fulfillment Solution). Marketplaces also often share support, customer data ( Partner Program portal - zDirect, Zalando Marketing Services ZMS by Zalando), and warehouse space.
With the benefits of partner programs you’re meeting consumers’ expectations for a fraction of the price and resources.
Here are a few benefits offered by Amazon’s program:
30%+ lower shipping costs
20-25% sales increase with FBA
130 customer support sites
Right from the start, a customer’s loyalty is extended to your brand. Customers with subscription services like Amazon Prime will especially be coming back. Entering a marketplace is an easy way to gain trust, visibility, audience and reputation without high investment.
You can also leverage the great shopping trends data and use it to deliver a better customer experience on all your selling channels. ZMS facilitates Zalando’s consumer base and data from all markets ( >7bn marketplace visits per year). This will help you advertise your brand more effectively and in the long run will convey significant savings.
Keep in mind
It is important to respect the guidelines of the platform when using customer information. Utilizing information found within the platform for any purpose outside of the platform is strictly prohibited and may result in suspension of selling privileges.
Memberships in marketplaces
Member benefits and apps have made marketplace shopping an entirely new experience. Memberships are a way for brands to make customers feel special and to differentiate themselves from other online shopping channels. Rewards and bonuses, similar to in-store loyalty programs, keep consumers coming back. These types of programs keep consumers engaged, and provide valuable data for the marketplaces.
New memberships are constantly popping up, with benefits expanding as well. Amazon Prime, with its free shipping, has grown significantly, with roughly half of the population in the United States being members. Amazon keeps adding new benefits such as Prime Video, even acquiring film and television studio MGM.Amazon is a benchmark for all marketplaces, so we can only expect others to follow. It’s safe to assume that benefits will grow, and new subscription customers will be joining to shop on marketplaces for a long time.
The best online marketplace strategy for 2023
Developing a strong brand and brand story is essential for success on marketplaces. Once you have that in place, focus on making your product detail page (PDP) visually appealing and enticing in order to attract traffic. Monitor engagement metrics such as clicks, click-through rates and conversion rates to gain insight into how customers interact with your PDP. Use this information to optimize your PDP and continue to monitor and improve it through a process of review and iteration.
Creating high-converting product pages for marketplaces
Let’s start with creating SEO-friendly, high-converting product pages. We will be discussing all the elements using examples from our customers.
Viking Outdoor Footwear is a Norwegian brand that makes protective, comfortable and durable footwear for kids and adults. Here’s their product page:
Creating product pages starts with the product name and description, which bring us to Amazon SEO. Google SEO and Amazon SEO or Farfetch SEO might have similar foundations – creating well-written sales copy based around volume keywords – but they are very different, and you can’t use the same principles on both to achieve success.
Product page SEO is weighted on all marketplaces:
1. The title is the most prioritized element. Amazon allows for 200 characters, but it’s better to use about 80. Longer titles don't fit on mobile devices. Above all, you want the title to be clear and informative. Another good practice is to start with the most relevant keywords and end on the least important information. Sometimes you can still find examples of keyword stuffing like “Keratin hair mask, keratin hair care, keratin for long hair.” Those hard-to-read titles are pointless – e.g.Amazon SEO doesn’t promote overuse of keywords. Using it once is enough to be indexed.
Remember that each marketplace is different, and it’s best to create separate marketing strategies for each of them.
2. Search terms are the second prioritized element. It’s basically a spoon-feeding search. You can use 250 characters. Concentrate on relevant phrases – those not included in the title, but still significant for search. Ensure that you are targeting the correct audience, and focus on the specific market segment to keep your products visible. Avoid including unrelated brand names or information, as well as non indexing characters such as commas, apostrophes and similar characters. Do not duplicate phrases, as Amazon recognizes that.
3. The last prioritized element is bullet points. When creating product listings, you get five bullet points. It's important to make these fields informative yet concise. Utilizing relevant keywords here can improve the product's discoverability and searchability. Consumers often shop on mobile devices and pay attention to other sections: media assets, titles, reviews, and price so use this space to power SEO.
Keep in mind
Avoid overstuffing keywords, and remember to stay within marketplace's rules (this also applies to search terms). For example, making any health claims that are not scientifically proven can lead to the product being removed from the site among other consequences. Marketplaces are even believed to have methods to punish your brand without you knowing about it, like shadowbanning your products.
If you need some additional keywords or are simply looking for good ideas, here are some tools to use:
If you need additional keywords or are looking for good ideas, here are some tools to use:
Keyword Shitter is free and generates a list of keywords for you. It’s not marketplace specific.
Google Keyword Planner is free but not specifically designed for marketplaces. You can use it to see trends in keyword searches over time. Paid versions of this include Semrush Keyword Magic Tool or Ahrefs.
Keyword Tool Dominator and Helium 10 have a version specifically for Amazon.
Jungle Scout, Sonar by Sellics and Seller Labs have dedicated options for Amazon.
It's important to use tools correctly.What works on Google may not work on Amazon, Zalando or Farfetch.Google-dedicated tools are still beneficial when searching for ideas and trends, just keep it in mind that for SEO purposes, you should use tools that are tailored to the specific marketplace you are targeting.
Media assets for high-converting product pages
When your product name and description are created, it’s good to spend some time on choosing the right media for your product page. To create an engaging experience for consumers and increase conversions on marketplaces, it is important to use images and videos that evoke emotions and give a sense of what the product is like in real life. Requirements for the main image include a traditional white background and a clear, full view of the product. Some marketplaces, like Amazon, can take your product down if you don’t stick to those rules.
Additionally, you probably already have great photos from professional photoshoots that can show your clothes, cosmetics, jewelry or shoes in action. It’s a great idea to use them in various places across the product page, and it’s worth investing in high-quality lifestyle photos and videos to provide authenticity and a holistic experience for consumers. This is why:
If the marketplace is providing the opportunity to use video (like Amazon, Walmart and AliExpress), use it. Shoppers are making decisions in mere minutes, which means that you have to capture their attention as quickly as possible. That is why you need videos to display the product's unique selling point (USP) and keep customers on the page.
You want videos to be product-focused and packed with information, and for them to last from 15 to 30 seconds max. In the times of TikTok, shoppers have a short attention span. If you can’t use video, make sure to provide a short infographic to show your hook. The more you showcase the product benefits during use, the easier it will be for consumers to imagine using the product in their own lives and make a purchase decision.
Keep in mind
More media privileges are offered to brands with a registered trademark on Amazon, so if you can, get it.
The next step in creating a high-converting product page is the buy box.
Win the buy box
The buy box is a crucial element on a product detail page. It's where the "add to cart" and "buy now" buttons, the main calls to action, are located. The price and shipping are also displayed in this area. Make sure that your offer is competitive when it comes to both, because they influence buyers' purchasing decisions. About 80% of sales occur in the buy box. If another seller offers the exact same product as you, Amazon puts one seller in the buy box.
To purchase from other sellers, buyers need to scroll down the page and look for the section. To maximize sales, it's essential to be that one seller in the buy box. The factors that determine who is placed in the buy box on Amazon are complex and not fully known, while on Walmart, the total cost of the product offer (price plus shipping) is the biggest factor in getting shown there.
Having competition as a seller on a product doesn’t necessarily mean low sales. To achieve success on marketplaces, owning your own distribution channels and establishing a strong brand can give you an edge. This will allow you to avoid buy-box competition and increase your chances of making sales.
Keep in mind
Put your best effort into building an SEO-friendly product page, but keep in mind that there is more to it. It is believed that Amazon's algorithm prioritizes items in search results based on:
Customer service evaluation
Order defect rate
Performance and conversion metrics
How long the product has been listed on Amazon
Sales history and sales velocity
The power of marketplace reviews
In the context of online reviews, reading positive feedback from other customers who have bought a similar product increases the perceived value of the item and instills confidence in the purchasing decision.
Customers often prioritize the reputation of a business over its prices. Authenticity can enhance a business's credibility and trustworthiness, making it more appealing to potential customers. Studies have shown that many shoppers avoid businesses with ratings below four stars, while those with a good reputation in online reviews tend to see an increase in traffic and sales.
Interestingly, only a small number of reviews, around 10, is needed to establish trust in a product. Having more reviews does not necessarily lead toa higherconversion rate. However, more reviews can help to mitigate the negative impact of a single one-star review and keep the overall rating from dropping.
Source: Bright Local
Creating the best customer experience on the marketplace
Online marketplaces are no longer a new or unique concept for online shoppers, who are becoming increasingly comfortable and confident with these channels.
Source: The State of Online Marketplace Adoption by Mirakl
The importance of shipping
Marketplace shoppers expect ultrafast, free shipping. That’s the current standard, and if you want to avoid abandoned shopping carts, you have to deliver. In AlixPartners’ survey, 96% of respondents admitted that the availability of free shipping impacts their purchase decision.
To keep fulfillment costs from negatively impacting profits, it's important to have access to cost-effective delivery options. This can be achieved by diversifying your shipping strategy, using programs like Zalando Fulfillment Solutions (ZFS), Shipping (ZSS), and Returns (ZRS) or third-party logistics providers like ShipBob or ShipStation.
Keep in mind
When you're selling online and you can’t deliver free shipping, the best thing is to include shipping in the price. A low price may initially encourage people to visit your website, but you won’t make that sale anyway, and you’ll end up delivering an unpleasant experience. Changing your strategy will make a visible difference and grow your conversion.
The price should align with the perceived value of the product –- if it's a premium item, consumers will expect a higher price. Lowering the price may cause consumers to view it as less of a premium product.
Go pro to be seen
Being a brand in partnership with the marketplace helps. Pro options like Prime visibility on Amazon are impactful. There is a single button on this platform that turns the filter on, and all non-Prime products disappear from the feed. Customers use that filter – they already paid for membership to have free shipping, so they want to benefit from it. Those subscribed members are the majority of the marketplace's users (e.g. since 2019 65% of all U.S. Amazon users are prime members). You want them to see your product.
Use storytelling to connect with potential customers
Brand storytelling is crucial to evoking an emotional response from consumers and building a strong brand. Instead of focusing solely on how your product solves a problem, consider the problem the consumer is facing and develop your brand story around how your product addresses and resolves those issues.
Creating a compelling brand story will continue to play a significant role in connecting with consumers and building loyalty. Gen Z and Millennials are already heavily invested in backstory and what a brand stands for.
Create attractive branding
Any available space is good to show your branding. Use the custom PDP template if the marketplace provides that option. Amazon offers a free, default template, but you can also create your custom design and it’s worth the investment.
The consumer journey doesn’t end with the purchase on a marketplace, it continues with the experience of receiving and using the product. Packaging, instructions and post-purchase interactions all play a role in building brand loyalty and reinforcing the brand story. Make sure they align with your brand message.
There is always a way to deliver the best customer experience, even if you choose to work with FBA or use Walmart warehouses and your product will be transported in their boxes. You still can be using a well-designed, branded inner box that includes images and storytelling, as well as a product insert with a QR code. Creating an impactful unboxing experience can help establish a connection with consumers. QR codes can be used to direct consumers to social media accounts, provide warranty information or offer relevant engagement opportunities. These codes are becoming increasingly popular again, so make sure to get the most out of the opportunity.
Keep in mind
Online marketplaces want to maintain consistency in consumer experience and therefore discourage redirecting traffic to external websites. That is why it's important to avoid including links to your website in copy, photos or messages. Marketplaces have algorithms that can detect this, and if caught, your account could face violation penalties and even termination. It's not worth the risk. While it may be possible to regain a suspended marketplace account, the process can be costly and time-consuming.
React when things take the wrong turn
You don’t have full control over every aspect of your customer experience. There are also subjective reasons for unhappy clients like their taste, unrealistic expectations and so on. Those things can cause negative reviews. You don’t want to fight opinions or overexplain complicated processes that resulted in delay.
To keep the best customer experience, apply the Amazon policy of “no questions asked.” It makes a difference, it may cause negative reviews to disappear or to get less aggressive. Be quick, be pleasant and be professional.
If negative reviews come in a big wave, you can expect the marketplace to reach out. Communication and honesty are the only things you can do. Even if they pause your selling privileges, they will usually help find a solution. Stay on top of this, and be ready to create a plan of action to get reinstated.
Marketplaces also monitor shipping. When you’re shipping your own products, it’s key to maintain fast delivery, provide accurate tracking information and keep your cancellation rate low. There is an easy way to get rid of problems with these – using a fulfillment center like Amazon's Prime shipping, Walmart Fulfillment Services or eBay Global Shipping. With them, you’re no longer accountable for shipping errors, and your account is in no risk of suspension. It’s a win-win strategy.
To avoid issues, manage customer expectations. It is also important to respond to messages from customers within 24 hours or less. This can help prevent returns, refunds, bad reviews and account suspension. The communication options between sellers on marketplace sites and buyers can be limited, but there are tools available to make the process easier. Use these effectively and communicate clearly with customers to ensure a positive experience.
Keep in mind
Marketplaces are looking at policy compliance. If those negative reviews uncover intellectual property infringement or violating of any other policy, your account may be permanently terminated.
While it may be possible to regain a suspended marketplace account, as mentioned above, the process can be costly and time-consuming.
Grow sales on marketplaces with advertising
Investing in paid placements, particularly on Amazon, is essential for increasing revenue and driving sales. Consumer behavior shows that most people don't go past the first page of search results. On a desktop, there are usually around 50 listings, and on a mobile phone, closer to 20. If you're not one of those 20-50 products listed on page one, consumers won't be seeing your offer.
To get the most out of your investment in advertisement, you need to find a balance between organic and paid traffic:
Organic search listings are the products that a marketplace algorithm deems to be the best match for a customer's query. This listing typically appears at the top of the search results and can be differentiated from paid ads or sponsored content. The organic search algorithm considers several sources when selecting these items, with sales history and velocity being two of the most important factors. Keep this in mind when analyzing which products are likely to appear on organic searches.
Paid search can be identified as listings appearing next to organic search results. Promoted products may also be available on organic searches but are given preferential placement via a paid advertisement. This placement is determined by several factors such as cost-per-click (CPC) and targets, among other variables. In the case of Amazon, these variables are carefully weighed out before deciding which products to include in their paid spots.
Organic and paid search are key aspects of marketing on Amazon, and other sites like Zalando, ASOS or Lyst.When it comes to advertising on a marketplace, there are two main types of ad spots – search and display.
Display advertising on marketplaces
Sponsored Displays are a recent type of advertisement available on Amazon, leveraging their DSP technology. These ads show up in different spots on Amazon pages as well as offsite, allowing for retargeting and remarketing. When using Sponsored Displays, there is greater control over what gets shown and the creative side of ads. This type of advertising opens the door to more exploratory and brand awareness searches.
Search advertising on marketplaces
Display advertising is a great tool for creating brand awareness, but search advertising is where consumers find the products they need. This type of ad is more native to the user experience and presents better opportunities for conversion.The biggest benefit of search advertising is its cost-efficiency. In both traditional media and DSP, you have to face upfront costs and be ready to invest heavily. With search advertising, it is also easier to track the return on the ad.
Sales history and sales velocity are important factors in getting to the top of organic ranking, but what if your product just launched or you just joined the marketplace? There is no way for you to reach the top of organic search. You need ads to be seen. In the long run, those ads will help you build a great sales history and velocity, and they might even get you to the top of organic search in the future.
CPC is the primary model for advertising on marketplaces. In this model when a consumer views and clicks your ad, you will be charged according to the bid amount. If a consumer only sees the ad, which is called an impression, you won’t pay anything.
Search advertisements on Amazon.
The bids and ad placements for advertising on Amazon are managed by an algorithm that weighs various factors, e.g. the click-through rate. Algorithm determines whether a product should be placed in that ad spot based on how often it has been clicked when someone saw it.
Amazon’s sponsored product placements show up higher in the search engine results than organic listings. Sponsored products display both in search and on product pages.
Sponsored Brands are offered through Amazon's Brand Registry and provided to brands with registered trademarks on Amazon. They allow for a unique storytelling opportunity and direct customers to the store page or individual products featured on the right side of the ad. They also give customers additional time to get exposure to your brand and understand why they should buy from you. Sponsored Brands get top placement in search results, allowing them to boost brand awareness and drive conversions – a big part of why Amazon's ad business continues to grow quickly.
Keep in mind
You can’t include search terms from competitors in your product listings. That goes against marketplaces policies. However, you can be targeting their audience and bidding on the same keywords to capture a share of the market – potentially those who are already looking for what you offer.
However, bigger competitors may be spending more money on targets than you can’t afford. Not all cost-per-click rates are equal.
Setup and assessment of your ecommerce advertisement
To create a successful advertisement on marketplaces, be specific about the type of traffic you want to acquire. By carefully selecting the terms and competitors to focus on, setting up the campaigns correctly, and allocating budget accordingly, you can gain critical mass. This can result in more impressions, higher click-through rates and more conversions. Additionally, the marketplace will more likely show your ads in favorable positions, as they will recognize the potential for sales.
Marketplaces offer two types of targeting:
Automatic – The marketplace chooses the target and the placement.
Manual – You choose where to whom your ad will be shown
Ensure that your targeting is relevant. This can be keywords, other products, whatever is the best way to show off your product. But, the marketplace has a right to control your ads. It won’t show your ads if targeting doesn’t align with the advertised product. This will result in a lack of impressions, clicks and revenue.
Segmenting your ad groups helps ensure that the right products are placed in the right groups and that targeting is based on the appropriate match type. There are typically three match types available on most marketplace ad platforms: broad, phrase and exact.
Broad match means that the customer’s search is related to the search term being bid on. Phrase and exact match are more precise. Keep these match types separate as combining them can create chaos in results. Additionally, costs for broad, phrase and exact match keywords or targets can vary, so it may be necessary to control budget differently across these terms.
You can also split variations based on color, size, style, etc. for better segmentation.
Keep in mind
Splitting variations based on color, size, style, etc. allows for better segmentation.
Make sure to set limits on the number of targets and ads used in a campaign. Avoid adding hundreds of keywords and products to a campaign with a small budget. Instead, consider creating themed campaigns, such as general search or page-one-ranking campaigns.
Target one or two specific keywords related to the theme, and allocate budget toward that campaign. By overloading campaigns with too many targets and not allocating enough budget you’ll reach their spending limit and they will stop showing. Adjust budgets based on the number of keywords and the desired volume of impressions for your advertising campaigns.
Keep in mind
If your brand is not converting in certain ad placements, other brands may take advantage by spending less and being placed in those spots. This is because marketplaces primarily earn money from sold listings, not ad bids. Amazon or Zalando may prefer to accept lower bids from competing brands whose products are more likely to sell, even if your brand has more money to outbid them. This is where the marketplace generates most of its revenue.
After each campaign, you need to calculate your return on ad spend (ROAS). This is a measure of how successful an advertising campaign is, determined by the amount of revenue generated compared to the total amount spent on advertising. The great practice is to not compare ads spending to ads-driven sales, but all the sales. As we mentioned before, paid advertising leads to a surge in organic results, so it’s good to include them in the analysis.
Keep in mind
Depending on the type of ad and the platform, attribution windows vary. Attribution window refers to the amount of time between when a user views or clicks on an ad and when they eventually convert. This metric is important for gauging the effectiveness of campaigns, as it tells marketers whether customers who interacted with their ads completed intended actions, and it also determines the amount of ads payment.
Grow your brand with marketplaces
Online marketplaces provide an attractive and successful platform for fashion brands to expand their business and reach out to new customers quickly in a cost-effective manner. The key ingredients to have a successful presence on online marketplaces include creating high-converting product pages with media assets, seizing the power of marketplace reviews, building an exceptional customer experience on the marketplace, and if necessary, pushing extra efforts with marketing advertising. There are many different marketplace options available that cater to fashion-specific items, as well as more general marketplaces the only limitation there is – is your ecommerce platform and its integration possibilities.