the product catalog success guide: growing marketpalces

So your marketplace has been growing consistently… But what can you do now to keep the momentum going and boost it even further?  The top 10% of marketplaces grow their product catalog 87% YOY! These marketplaces have systems and practices that can be put into place to establish a win-win seller-marketplace relationship and propel themselves to the top. Does yours?

the top 10% of marketplaces grow their product catalog 87% YOY

These practices involve continuing to reduce seller efforts and making it easier for sellers to sell, buyers to buy and boosting product variety. They do this by implementing automation to raise GMV, especially in categories that are doing well. In this way, your product catalog stand out in size and variety amongst the sea of other marketplaces.

Here are 6 ways to make sure your product catalog keeps heading onward and upward from here:

Soar with strengths.

First of all, kudos! Your marketplace is growing, which means you’re doing the right things. The next step is to take a deeper look (more on that below) and identify what works (and why) so that you can keep it up. Which sub-categories are especially successful? How can you double down and continue to strengthen them? Which sellers are generating the most revenue? Can they do even more?

Stay ahead of the competition

What products and subcategories appear to be trending out there? Do you have these covered in your own marketplace? Once you’ve zeroed in on those products and gaps on your marketplace, make a point of adding them. Get existing sellers to add them to their offerings or bring in new sellers who can cover these areas. This way, you’re not missing out potential sources of revenue and growth.

One great example of a short term trend was the ‘fidget spinner’ craze that took over the world. For half a year, the sales of fidget spinners (a handheld toy) skyrocketed to the stratosphere and marketplaces that capitalised on this got a boost. Our friends at Rakuten Intelligence summarised it nicely:

fidget-spinner-product catalog

It’s imperative that your product catalog keeps up with the latest trending products and actively promotes them. All this work ensures that when customers are looking for products, your marketplace will be the one getting the share of that pie.

Bundle products.

Product bundling is a classic—and extremely effective!—strategy for increasing the average AOV on your marketplace. There are several ways to go about product bundling.

  • Bundles: Several complementary products that are sold together as a combined package from the product page, usually at a discount
  • Cross-Sells: Complementary products that are added to an existing purchase from a different category or vendor
  • Add-Ons: Extras—often subscriptions or protection plans—that contribute an additional service or a boost of some sort to the total package

Forrester estimates that Amazon’s recommendation system has a success rate of 60% and a report from McKinsey estimates that 35% of all Amazon purchases are due to recommendations. They’ve done it so much that they even have a Product Bundling Policy now!

One obvious benefit of product bundling is that it reduces the amount of marketing you have to do (think: marketing one bundle of four products versus marketing four separate products). Also, it helps you move stagnant inventory, allows for pricing opacity that boosts your bottom line. This encourages buyers to sample and explore new products, possibly developing into new areas of revenue for you down the road. Bundling also reduces the mental load on buyers, presenting other products they may want or need upfront, and often leads them to spend more.

Maximise the potential of existing sellers

Does your marketplace offer what buyers are looking for? Most marketplaces who don’t have a sizable product catalog may be tempted to start acquiring new sellers. Before you jump to doing that, it may be useful to turn to your closest partners – your existing sellers. Our data shows that 40% of sellers don’t upload their entire inventory onto marketplaces due to various reasons (lack of time, difficulty in the uploading process etc). Instead of going through the expensive and time-consuming process of finding new sellers, helping existing sellers onboard their entire inventory is more cost effective. Assuming your current sellers are in your core categories, you would also be effectively strengthening your grip on these product areas by maximising your existing sellers.

However, we do acknowledge that seller acquisition is an important and ongoing process of any marketplace. For tips on creating a systematic and scalable seller onboarding process, look no further than our Seller Acquisition and Success Guide

Automate Your Product Catalog

Automation plays a significant role in ensuring continued growth. Better yet, there are many different areas in which you can incorporate automation. 

You can automate your marketplace analysis in order to determine product trends in your core categories and zero in on competitive pricing. Our reports show that sellers who use dynamic price optimization, see a rapid boost in weekly sales. Also, using competitive analysis software like Silverback allows your account managers to identify the gaps in your product catalog, find out which sellers can fill that need and contact them easily. This allows your marketplace to stay stocked with the latest products at the best prices to keep up and exceed your competition.

Automation can also be used for product bundling. From identifying the best complementary products to recommending actual product bundles and cross-sell opportunities – automation is what makes your marketplace competitive and takes it to the next level.

Track Your Progress

When it comes to strengths, the only way to truly identify what works is to dive deep into your success metrics.  As you continue to grow, you’ll want to keep improving these 3 values:

  • Increasing total number of offers and products (overall and per seller)
  • Reducing number of missing products
  • Increasing total number of products

Constantly coming back to these values will show you whether you’re moving in the right direction and growing well. If not, regroup and reevaluate your strategies and try again!

A marketplace may not grow organically and wildly, but—even better—with these six strategies in place, you can put systems into place to push your marketplace into the top 10%.