Understanding Online Marketplace SaaS Solutions – Pros and Cons

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Online marketplace technology offers companies the opportunity to profit from online retail without actually becoming an online retailer. There’s no stock, no warehousing, no picking and packing or returns, it’s just a case of putting the right products in front of the right people at the right time and sitting back and enjoying a constant stream of recurring revenue.

If only it was that easy.

But we’re jumping ahead of ourselves. Before we carry on with this post, we need to answer a couple of simple questions.

Marketplace

What is an online marketplace?

An online marketplace is an eCommerce site that lists and sells products for third party retailers. The most famous examples of online marketplaces include eBay, Etsy and Amazon. Some marketplaces (like eBay and Etsy) simply host product listings and facilitate orders, payment and communications between the buyer and the seller. Others (like Amazon) may take a more hands-on approach and handle warehousing, shipping and other retail logistics required to sell online.

Online marketplaces aren’t restricted to big-name internet brands. A number of traditional business including retailers like Tesco and Halfords have developed their multi-channel strategy and widened the scope of their product catalogue by building online marketplace businesses.  

What is online marketplace technology? 

Online marketplace technology offers retailers, online publishers and other online businesses the opportunity to create their own online marketplace. This enables companies to expand the range of products offered via their website and/or create new streams of revenue outside of the traditional eCommerce, subscription or advertising model. Often referred to as SaaS (Software-as-a-Service), this technology is hosted online and managed via a web browser.

The Pros of Online Marketplace SaaS Solutions

Acquiring a fully hosted online marketplace solution has numerous advantages and is especially appealing to organisations who have limited development resources.

It makes sense to let the experts do the work and concentrate on your existing business.

While most SaaS solution providers will work with their partners to create a branded or seamless experience, these products are sold primarily as a “plug-in and play” application.

However, managing an online marketplace requires a little more than simply providing the right technology to build the environment.

A Chicken and Egg Situation 

For an online marketplace to thrive it needs an active community of buyers and sellers. For many marketplace operators, this presents a bit of a chicken and egg situation. You cannot attract buyers if the sellers aren’t there and the sellers won’t come if there are no buyers.

Countless online marketplaces have failed because they couldn’t attract enough sellers to make their platform attractive to buyers. Solving the chicken and the egg equation is the single most important thing any budding marketplace business most do if it ever hopes to succeed.

Note: Many SaaS Online Marketplace technology solution providers supply the technological infrastructure to build an online marketplace but not the retail relationships to stock it and make it viable.    

SKU Cloud – The Complete Package

SKU Cloud approaches the problem from a slightly different angle. Our SaaS online marketplace technology comes pre-loaded with all the functionality, flexibility and support you would expect from a leading software company – but it also comes pre-loaded with something else – retail partners.

As the technology platform behind Flubit.com, the UK’s largest independent online marketplace, SKU Cloud’s SaaS online marketplace software gives your marketplace business access to more than 1,500 retail partners, selling 50,000,000+ items of stock (SKUs). This ensures your marketplace business has the critical mass of sellers and products to attract and retain buyers and drive real revenues.

Bespoke integrations enable marketplace partners to select the products displayed on their site by a retail partner, product type, brand, price or any other conceivable method.

Unique Business Model

SKU Cloud’s unique business model, which guarantees margins for our retail partners by not charging listing or final value fees (unlike many competitive online marketplaces) ensures your marketplace constantly attracts high-quality retailers selling branded products at the right price.

Partnering with SKU Cloud will give you access to retailers like HMV, Game buyer, eBuyer and enable you to sell big name brands, including Apple, Canon, Samsung, Dyson, Playstation and Lego, from your very own online marketplace from day one.

Who Do We Work With?

SKU Cloud powers the online marketplace businesses of a wide range of companies including major newspaper publishers, affiliate networks, cashback and voucher code sites, and employee benefit/customer loyalty organisations. 

To learn how your organisation can build a fully hosted, fully stocked online marketplace business speak to one of our eCommerce experts today by calling our team in London on +44 (0)20 3745 4483 or send us an email here.

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