Marketplaces: Making Small Businesses Big by PHYGiTALNOW - a digital marketing consultancy in Dubai

September 15, 2020by Karan Kukreja

PHYGiTALNOW is a digital marketing consultancy in Dubai, focused on helping SMEs rebuild for growth. We know that as the pace of digital adoption and global connectivity accelerates, small businesses continue to face increased competition. They have to embrace online-selling to go beyond their physical stores and increase their customer base. While several digital channels like eCommerce websites, social media and more exist, the focus for this article is on marketplaces as their reach and ease-of-setup has made them a lucrative channel for small businesses looking to grow. We will also talk about our marketplace service in Dubai.



What are marketplaces and how do they work?

An online marketplace is an ecommerce website (and/or app) where multiple third-party sellers list their products. Customers arrive on the marketplace (directly or via another site such as Google), browse and select an item becoming ready to purchase. The transaction is processed by the marketplace and the third-party seller is notified with the details of the order. Depending on terms of business, the fulfilment is either done by the third-party seller or by the marketplace directly. Amazon, eBay, Noon are popular examples.


The benefits and downsides of working with marketplaces

The potential gains by setting up on marketplaces will vary between businesses and industries, and indeed between buyers and sellers.  The primary benefits are:

  1. Ease of setup: businesses who are new to the online space can easily register as a third-party supplier and once approved, upload the product feed and start selling. The process is quicker than setting up your own eCommerce website and can provide a relatively quick litmus test based on the reactions from the customers.
  2. Immediate reach and exposure: they provide small businesses access to a network of existing shoppers who are ready to buy now. The increased exposure results in a higher volume of orders.
  3. Access to new markets: as an additional sales channel, businesses can use marketplaces to launch digital-first in new territories and collect key analytical insights into their business. These insights can then inform future market setup and launch strategies.

Like all good platforms that offer several benefits, there are some downsides as well:

  1. Low margins: while the marketplaces offer higher volumes of transactions, they do charge high fees in addition to the cost of fulfilment which puts pressure on the bottom line. Getting the pricing and internal operations cost right is critical to remain competitive and poses a strong challenge.
  2. Buyer is not your customer: the marketplace buyer is their customer and not yours, therefore limited opportunities exist to drive brand loyalty. For businesses that are working to build brand awareness online, the lack of face time with customers makes it more difficult to establish a direct-to-customer presence. Furthermore, opportunities to upsell and cross-sell other products within your portfolio also are not within your control. Little or no data is passed on therefore for repeat purchase the journey begins again from discoverability.
  3. Fierce competition: given the size and scale of marketplaces, several sellers have similar products and compete for the same customer. Since the customer experience is managed by the marketplace, the only attribute to convert is price which impacts profit plans.


Tactics to win with marketplaces

While it’s undeniable that marketplaces are a prime selling tool for small businesses, it is also important to understand that they should be treated as an entirely new channel. Marketplace selling should be part of a bigger multichannel picture and retailers should have a bespoke marketplace management strategy in place to really reap the benefits.  Below are 5 essential steps that will set you up for online marketplace success:

  1. Manage product listings: commit to crafting distinctive product titles, descriptions and categories and seek expert advice if needed as these are what will set you apart from another seller selling the same product. The quality of content also has an impact on your search rankings within the marketplace, ensure you have access to good content writers.  Investment in inventory management software if you are selling across multiple channels preventing oversell situations that can impact customer satisfaction
  2. Get the pricing right: one of the most important factors in making a purchase decision is price. The buy box price is now always the lowest price, the winning offer is considered to be the ‘best buying option’ for the customer which is not necessarily the cheapest. If possible, integrate price automation software that will adjust the price of each product based on competition and demand. Getting the pricing right is not only crucial for the sale but for the profitability of the businesses as well. Ensure to have a strong understanding of the marketplaces fees, commissions and other costs (such as delivery), so these could be factored in while pricing the products.
  3. Advertise effectively: be prepared to invest on the advertising solutions offered by each marketplace. If you want to see your products appearing on top of the search listing pages then a strong marketing plan is a must. Mind you these are not standard ad formats that get blocked or closed by customers. They are highly targeted and there is enough research to support the claim that when these are clicked, a purchase happens.
  4. Optimize the last-mile: Shipping is one of the most critical factors in the decision making process, so it’s important to offer a variety of options – such as free, next-day or standard shipping. Customers enjoy being in control and therefore like to have the choice to pay a little more for faster delivery. For choice of carrier, ideally work with operators who have software that directly integrates with the marketplace storefront, that way you don’t have to manually share tracking information with the customer. Remember, any challenges in last mile fulfilment means vocal expression of customer dissatisfaction.
  5. Get Social: a large percentage of shoppers use a least one form of social media, therefore experimenting with these platforms would mean better connect with the customer. Additionally, it also keeps your customers in the know of, which marketplaces you are selling on.


Marketplaces will continue to be an integral part of most retailers’ omnichannel strategy as they work to meet customers where they are shopping across the globe. Whether a business is looking to expand into online sales or reach new prospective customers, there is likely a marketplace that fits every individual need. Keeping these factors in mind will help to ensure that small business owners are making the right decision when it comes to the role marketplaces play in their sales strategy. Acknowledging the importance of marketplace selling and management, we have developed a consultancy package ‘Revenue optimisation’ that focuses on strategic tactics to improve conversion across all online shopping channels. Reach out to us at to understand more about this.


PHYGiTALNOW is a digital marketing consultancy in Dubai focused on transforming businesses for sustainable growth. We use our proprietary strategic framework C.A.R.T. to design industry specific bespoke marketing solutions. The primary focus is to realise the full revenue potential by providing best-in-class Digital Marketing Services – Search Engine Optimisation, Search Engine Marketing, Website and App Development, Social Media Strategy and Activation, Email Marketing and Digital Advertising. We also provide E-commerce specific services – online marketplace management, conversion optimisation and basket analysis.