Are you looking for a way to increase your Shopify store's growth? Becoming a marketplace is one option that could provide the extra boost you need.
With more customers, products, and transactions, turning your Shopify store into a marketplace offers multiple benefits. However, there are also some potential drawbacks to consider before switching.
This article will explore how becoming a marketplace could benefit your Shopify store and what you should consider before taking the plunge.
- Turning a Shopify store into a marketplace can increase revenue, repeat purchases, and average order value.
- Careful consideration of vendor selection, commission rates, and shipping management is necessary when becoming a marketplace.
- Benefits of becoming a marketplace include increased scalability, lower commission rates, and enhanced trustworthiness.
- To succeed as a marketplace, careful vendor selection, detailed listings, and offering multiple payment methods with no hidden fees are important.
Shopify stores need a new source of growth
Have you spent the past few weeks trying new growth strategies but not seeing any results? You’ve spent lots of time and effort optimizing ads, email, SMS, personalization, and more, but no sales are coming in.
You might feel ready to give up, but there’s a solution: Turning your store into a marketplace! It’s an excellent way to increase Average Order Value (AOV) and create more bundling opportunities.
You can also become your niche's go-to destination since adding new products is easy and helps keep customers coming back. And you'll benefit from higher commissions than wholesaling – making this a great option for businesses looking to grow their revenue.
When you open your store to other vendors, you can manage all aspects in one place. This includes everything from setting up product listings to tracking orders, managing payments, and handling customer service inquiries.
Plus, with integrated analytics tools, you can track key performance metrics in real-time to know what's working (and what isn't).
Taking the leap and turning your store into a marketplace requires careful consideration regarding commission rates and vendor selection. But with the right strategy in place – such as offering competitive commission rates or vetting potential vendors before allowing them onto the platform – you can ensure everyone benefits from this win-win situation.
How your Shopify store benefits from becoming a marketplace
Transforming your Shopify store into a marketplace can be an advantageous move. It allows retailers to capitalize on their existing customer base and provides the opportunity to drive more sales and revenue. When done properly, it can also offer other benefits, including:
- Increased scalability - A marketplace model enables you to attract more vendors, create new products and services, and expand your reach.
- Lower commission rates - Unlike traditional ecommerce stores, marketplaces typically take a lower commission rate from vendors, providing them with more profit potential.
- Enhanced trustworthiness - Multi-vendor marketplaces are often seen as more trustworthy than standalone online stores due to the variety of vendors selling their products or services through the platform.
When creating a successful marketplace model for your Shopify store, it's important to carefully select the right vendors that fit in with your brand values and audience demographics.
Creating meaningful relationships with those vendors will help ensure that customers receive high-quality products and services while allowing maximum profitability from both parties involved.
Potential drawbacks of becoming a marketplace
Creating a marketplace model for your Shopify store isn't all upside; there are potential drawbacks.
One potential issue is that if the vendors selling their items through your marketplace are located across the globe, it can take longer for items to reach customers due to international shipping costs or delays at customs. This could lead to customer dissatisfaction and negative reviews about slow delivery times, diminishing your reputation as a reliable vendor.
Finally, depending on how many vendors are selling through your store, you may have to devote more of your time to managing vendor relationships and ensuring they meet the required standards for customer service, product quality/quantity, etc.
Here’s a tip though: if you manage your marketplace with a strong plan of action to begin with, you can prevent these issues. We’ll touch on it a bit more later in this post.
How to turn your Shopify store into a marketplace
Elevate your Shopify store to the next level by effortlessly transforming it into a bustling marketplace.
The first and arguably most important step is finding the right marketplace app for your Shopify store. Many great options are available, so take some time to research each one carefully. Consider payment processing fees, ease of integration with existing products and services, shipping costs, and customer service support.
Once you've selected the right app for your Shopify store, you must set up an account and create listings for the products or services you wish to offer in your marketplace.
Ensure all listings include detailed descriptions of each product or service and clear photos of what's being sold. Additionally, ensure that pricing is competitive but still allows for a decent profit margin to remain profitable over time.
Lastly, it's important to ensure that customers have multiple payment methods available for their purchases and that there are no hidden fees associated with buying from your marketplace. Following these steps, you can quickly turn your Shopify store into a thriving marketplace where customers can find whatever they want!
Examples of Shopify stores with a high-performing marketplace
Want to see examples of how Shopify stores are leveraging marketplaces? Here are how some high-performing marketplaces have been created on Shopify with Carro.
Blendjet is famous for its blender which makes blending on the go much easier. But for the Blendjet team, they knew they could offer more value to their customers by adding a marketplace full of products that could be suitable for blending like shakes, powders, frozen fruit, and much more.
Are you a big fan of the outdoors? Gear.com has you covered for all your outdoor needs. But how did a site like Gear.com get thousands of products in its store?
Simple. They created a marketplace with products from hundreds of brands. And they take the time to showcase featured brands to drive more traffic and increase their co-marketing opportunities with them.
Trupo Treats sells creamy and delicious vegan milk chocolate that are manufactured using ethical and sustainable practices.
With their Treats Marketplace, customers can purchase various vegan snacks like popcorn, cookies, candy, and more. Now that their customers have a dedicated source for vegan snacks, Trupo is well-positioned to become their go-to destination.
How Carro makes Collaborative Commerce easy
Learn why Carro is the best solution for any brand using Collaborative Commerce.
Sell your products on other Shopify stores (and vice versa)
With Carro, we have a directory of the biggest brands for you to partner with. But if you can’t decide which brands are the best fit, we have a tailored recommendation service where we introduce you to brands so you can begin working together.
The best part is you don’t have to pay for products like you would with traditional wholesaling. This allows you to choose different SKUs to see what complements your existing product catalog.
"Take my word for it, if you install Carro, you are going to see what I’ve seen. Which is a dramatic increase to average order value, especially on orders that contain Carro products, which for us is over 80% increase to AOV."
Ryan Pamplin, Founder & CEO of Blendjet
Virtual inventory makes fulfillment easy
Brand partnerships are not like wholesaling. With Carro, you don’t have to buy products from your partners. Instead, orders are automatically sent to your partner brands so they can handle fulfillment themselves.
“Before we joined Carro, we had put our company on the market. We thought we needed capital to expand our traditional wholesaling. Now, we’re able to meet our goals without having any cash come out of pocket. We’re tripling and quadrupling the numbers of units that we move because we have access to so much more inventory.”
Amy Richardson-Golia, June & January
Find new bundling & upsell opportunities to increase AOV
Perhaps the most exciting reason to leverage Cross-Store Selling is that it’s the best way to grow your Shopify store in the long run. By working collaboratively with other brands, your brand will set itself up for success. Your Shopify store will become THE destination for your niche.
One of the best reasons to shop on Amazon is convenience. Being able to buy everything you need in one place is a powerful motivator. Wouldn’t you love it if your Shopify store was the go-to place for your customers’ needs?
"In addition to a nice contribution to the bottom line, it was also one of the most highly-engaged social posts for the year."
David Krimper, Director of Ecommerce, Manduka
You've weighed the pros and cons and are ready to start.
Turning your Shopify store into a marketplace is a great way to unlock new sources of growth. You'll have access to a larger pool of customers, more products, and greater competition.
Plus, it's easy to manage the marketplace with the right strategies. So don't wait any longer—it's time to transform your store into a full-fledged marketplace!