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Top 5 factors to consider before selling on any online marketplace

November 19, 2014 CK Wong Category : , , , , ,

Online marketplace concept

We have ranked top 10 online marketplaces in Malaysia previously, so which one to join if you are selling online as a merchant?

Here we look into the top 5 factors for merchants to consider before opting to join any marketplace.

Marketplace site traffic

Marketplace site traffic

This is the first thing you should consider as a merchant, go check the marketplace site traffic before you even start considering any other factors.

That's the main reason why we ranked top 10 Malaysia online marketplaces based on their site traffic previously.

The more traffic the marketplace is acquiring, the higher change your potential customers will be able to see your product or service offerings, make sense?

Whenever you receive any call or email from marketplace sales personnel, don't buy into their promised (or elevated) numbers, you have to go and validate yourself (or ask around).

Customer and product fit

Customer and product fit

If you are selling gadgets, no point selling on fashion marketplace like Zalora or FashionValet, right? It is crucial to look for a marketplace that is customer and product fit to your offerings.

Besides that, each marketplace has its strength and weakness. For example, lower value items tend to sell better on, F&B businesses should consider Groupon etc.

We did a compilation on vertical / category strength of selected marketplaces back in September 2014, this might still serve you as a reference even though the numbers could be quite outdated by now.

The idea is, you might want to prioritize sites like HiShop or Hermo rather than Lazada if you are selling beauty & health products. Those vertical-focused sites might help you to reach more targeted customers albeit stiffer competitions.

Merchant support and service

Merchant support and service

Once you have identified the marketplace site traffic and product / customer fit factor, the next thing you need to consider is the support you are getting from the marketplace.

Rakuten for example, have always positioned E-Commerce Consultant as the role to support merchants generating more sales. It is important to work closely with the merchant support team (or account manager) to get more exposure for your offerings.

There are bad apples every where so it is important (or down to luck) to work with a personnel in the marketplace who is responsible, reliable and helpful. The key is to get your offerings featured in the marketplace marketing campaigns.

Other than that, merchant also needs to consider other services provided by the marketplace, like fulfillment, shipping and customer service.

System, access and control

System, access and control

Merchants have to face the fact that joining marketplace is not as flexible as setting up your own online store, which you have the full control.

Some marketplaces provide user-friendly administration system for merchants to use, more established or enterprise merchants might need to consider the possibility of integration interface too.

There are house rules set by marketplaces, for example how many listings you are allowed, whether you are allowed to promote your own brand / social media channels, restrictions to sell cross-border, leads or customers data access etc.

Always remember that your store or offerings "sit within" the marketplace, hence you wouldn't have full control. As a merchant (especially resellers), be extra cautious when joining hybrid marketplaces which offer their own merchandising too.

Margin, fees and ROI

Margin, fees and ROI

This might be your first concern but we recommend this to be your last one instead (besides the ROI part).

The underlying objectives of joining marketplace can be either marketing reach, sales generation, or both. Do bear in mind that this is not a channel for leads or customers acquisition as most marketplaces don't share this data with merchants.

Some marketplaces only charge margin or selling commission, but merchant needs to factor in other fees like fixed annual fee, listing fee, payment fee, shipping fee and advertising fee.

At the end of the day, it is down to you calculate the ROI for your business, be it for marketing reach or sales generation.


Most marketplaces offer a good channel to generate more sales for your business, which you can leverage on their existing traffic, subscribers and customers.

As a merchant, you might want to strongly consider multi-channel retailing by joining multiple marketplaces that suit to your business.

If you intend to strengthen your brand and business, do strongly consider setting up your own branded online store just like Zen from Prado, who have participated in most of the online marketplaces available in the market.

"The competition in marketplace is very stiff and it is not easy to build and maintain our identity there. Also, not every marketplace disclose the customer data. With our own store, we have more control and it is easier for us to grow our brand and build a strong relationship with our customer" - Zen from Prado.

Read our next installment as we gather feedback from Zen and also other experienced online merchants, on how to gain quick wins selling on marketplaces?

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