The 4 types of sellers: How to get them onboard your marketplace

This is a two part series on Understanding The 4 Types Of Sellers.


We all know how crowded the e-commerce marketplace industry is. 

We also know that e-commerce is poised to explode in growth into the future as more and more people do their shopping online. Don’t take it from us – the numbers don’t lie.

Ecommerce sales growth:
 In 2019, consumers worldwide spent nearly $3.46 trillion online, up from $2.93 trillion in 2018, according to a recent study. That’s almost an 18% increase in ecommerce sales year on year, and it’s only expected to increase.
That’s almost an 18% growth in e-commerce sales year on year, and it’s only expected to increase.
Source: Digital Commerce 360

The number of competitors jostling to grab a piece of the pie increases. Do you know what sellers want from your marketplace? Do you know what attracts them onboard? And we’re not talking about the broad selling points here, we all know that easy onboarding, increased reach to buyers and sales are what these sellers want.

What we do want to discuss are the business needs of sellers that are being underserved by marketplace operators; needs that can really seal the deal with the sellers you want to sign-up and onboard.

We’ve identified 4 types of sellers and their motivations:

  • Existing marketplace sellers
  • Wholesalers
  • Brands
  • Physical Stores

Existing Marketplace Sellers

Existing marketplace sellers on different platforms generate the bulk of their sales online. Not only do they understand the process of buying and selling in a marketplace, but they also understand how to manage online orders. It’s easy to see then, why there would be low resistance to join new marketplaces. They move fast when they see new opportunities, so here’s what they’re looking out for:

What Existing Marketplace Sellers Want

Clear Commission Structure

Following a clear commission structure is essential so that sellers understand exactly what is up for grabs. Imagine reading a commission structure like:

“A 2.9% commission rate on products costing less than $100, with 1% more if quantity sold is over a XXX quota, pending additional bonus if quota is reached within 3 months of product being uploaded.”

Commission structures like these are overly complicated and only serve to confuse potential sellers. Sellers want to know how much their cut is at a glance.

For example, Walmart’s commission structure works in a way that differs from some of its competitors by only charging sellers when a product is sold. Sellers are able to list the product for free, paying only a percentage in referral fee, and then are able to receive third-party information to help them make better, and more concise choices going forward.

It’s simple to understand, seller-friendly and thus very attractive.

Pricing Management Tools

Here on Silverback Insider, we’ve talked about pricing optimization solutions and the incredible value that they give to sellers. Marketplaces such as Amazon Walmart and eBay have been providing price management tools to sellers for years now – many existing sellers would want this to be part of their seller capabilities. Offering it on your marketplace will allow sellers to keep their prices competitive and in turn, keep your marketplace competitive.

Wholesalers

Bringing wholesalers to sell on your marketplace is a completely different ball game. Wholesalers are experts in specific industries and typically have massive catalogs with many different products – they are usually more established and have existing workflows that they’re used to (read: less open towards change!). As such, they are usually more resistant to change and need a longer time to onboard as a seller.

Why is it useful to have wholesalers onboard then? Well, wholesalers bring with them an immense catalog that should very quickly boost the number of products and offers on your marketplace. While they can be more difficult to onboard, the pay off is also a lot larger!

B2B Buying trends:
89% of B2B researchers conduct their searches online.
73% of global traffic to B2B company sites originates from the search engines.
57% of the buying process is done prior to engaging with a sales team.
Source: B2X Partners

To attract this group of sellers, you need to address their business needs:

What Wholesalers Want

 Account Level Controls

Wholesalers want more sophisticated levels of control. On the seller dashboard, wholesalers usually require more options for account permissions. What does this look like?

With wholesalers, just like many enterprise customers, it’s common to have a hierarchy of roles within the company – there will be executives that will need to seek approval from managers before performing an action (i.e changing the price of a product). Having a user management system in place, where different employees within the company have different levels of access is highly useful. 

For example, European marketplace VidaXL has a robust user management center for its sellers, with roles ranging from inventory management to accounting staff. This wide assortment of permission levels give much more freedom to wholesalers, where multiple employees can control different aspects of their product offerings independently. 

vidaxl user management interface
VidaXL’s simple user interface for user permissions
Source: VidaXL

One Click Re-ordering

In a B2B marketplace, a wholesaler will likely have hundreds, if not thousands of products in their catalog. Many companies will buy the same products on a regular basis (i.e monthly) and having a simple re-ordering system is a huge plus as they will not have to spend time hunting down the same products every single time.

This functionality should be appealing to B2C marketplaces as well. Walmart has incorporated this to address a  customer need: Their “Easy Reorder” immediately loads up a list of favorite products and allows customers to quickly repurchase them again. 

Discount Pricing Controls

While pricing does largely remain the same, having the ability to digitally alter pricing models based on different criteria is essential for wholesale users in a marketplace environment. Some customers or consumers may require custom pricing levels.

For example, many B2B marketplace wholesalers would expect bulk purchase price discounts. This requires adapting to their prices according to quantity sold, a capability that many marketplaces do not currently support.For example, Amazon Business has a dedicated pricing control dashboard that allows sellers to offer ‘percentage off’ discounts based on volume, with additional options for finer controls (e.g duration of discount, minimum quantity for discount etc).

The Overview

In this crowded industry, it’s important for marketplace operators to remember that they’re not only trying to attract customers, but sellers too!

Instead of thinking about sellers as a single group with similar motivations, remember: Different sellers, different needs. Having identified the type of seller you’re looking to attract to your marketplace, it’s worth considering the features that we’ve just listed above.

Target the type of seller you want with the solutions they need, and you’ll be seeing supercharged growth in no time.