Why your own store does not take off

A couple of years ago, some people were only just arriving on marketplaces, and others already understood it was time to leave. The platforms would turn into an oligopoly, crank up the fees, and let Chinese sellers in. That was obvious ten years ago too, but two years ago the scare story became real. People knew about the problem, and many of them already had their own sites. A renaissance of their own ecom still did not happen. A site plus traffic poured onto it is not enough. So what do you do? Pick a strategy and follow it in everything. A site, an app, a bot are tools for turning traffic into an order. Trade is not only that. More precisely, it is not that at all. And contrary to a common view among our officials, trade creates added value. The value is not in sticking a new label on. Since this is about marketplaces, here are the main strategies for selling online.

I count seven:

1. Assortment leader. Everything you need, in one place.

2. Cost leader. Cuts operating costs and wins on volume, so the price is lower.

3. Availability and speed of delivery. The goods as soon as possible. Pickup points and express delivery.

4. Expertise. For niche or B2B goods, when the purchase is rare and complicated and the buyer needs someone alongside.

5. A guarantee of authenticity. Against counterfeit and parallel imports, a place people trust.

6. A unique product, an exclusive. Sell what others do not have and a lot of people badly want.

7. Service and customization. You do not only sell. You help adapt it, set it up, finish it.

A site is not a strategy at all. It is a tool that gets adapted to one of these, or to a combination. Before that, the marketing is adapted to the strategy. Before that, the product.

The chain is: strategy, product, marketing, sale. If you decide to be the cost leader, do not make a black-and-blue design and promise a premium service on the site. And if you are a boutique and you advertise “a wide choice of dresses and sandals” when you have 20 SKUs of each, you will burn the ad budget. Product, marketing, and the sale are a reflection of the strategy. They have to follow it without a seam.

So which strategy do you pick? It depends on your resources and your constraints. The people who could compete with marketplaces on cost leadership probably know all this already, and they are unlikely to be reading this. That strategy, like a wide assortment (which will have a long tail), needs capital or margin that most companies will not have enough of for the party.

Availability and speed of delivery. Wildberries has 95,000 pickup points, Ozon has 84,000. Plus dark stores and couriers. Even a contract with CDEK and Russian Post is 43,000 to 45,000 points. The last mile belongs to the marketplaces. You will not do it alone. Only if you join up and build something like a co-marketplace together with CDEK and the Post. Expertise. Yes. There is room here. Niche marketplaces already exist: building materials, craft, and so on. Less competition, expertise matters more, but less money if the range is small.

A guarantee of authenticity is a train that is leaving too. Marketplaces push their own sub-brands (Select, Special, and the rest). For me personally, authenticity is a relative idea. I bought Lacoste sneakers at SuperStep. They split at the bend of the foot in less than a season. I paid as if they were genuine. I wore them as if they were fake.

And here we get to the interesting part. A unique product. This is where most sellers and OEM “manufacturers” lose the advantage, because sticking your logo on is not creating a unique product. Instead of playing at being a manufacturer, it would be worth concentrating on a unique product that becomes the face of the brand. Or concentrating on the trade itself as the product. Make the experience of buying from you valuable on its own, enough to offset the inconvenience of the price and the logistics.

Reselling goods from China is getting harder. And experience elsewhere shows that even if you create a unique product but manufacture it there, sooner or later you get pushed aside.