Third-party sellers are key to the success of your marketplace. They enable you to offer a wide range of products on your platform, increasing the depth of your offerings. The main objective: to become a leading reference in your market. However, recruiting sellers for your marketplace presents a crucial challenge—you need to convince them to join! What sets you apart, and what strategies can influence their decision to choose your platform over others?
How to Convince Sellers to Join Your Marketplace?
If you want to create a marketplace like Amazon, financial considerations are key. Recruiting sellers requires presenting a compelling value proposition that distinguishes you from other platforms. Sellers are also drawn to services and benefits that improve their overall experience. So how can you leverage these factors to attract more sellers to your marketplace?
An Attractive Business Model
The commission on sales, the main source of income for marketplaces, is appealing to third-party merchants since they only pay when they sell. On the other hand, requiring a subscription fee upfront can be a deterrent, as can a commission that’s too high. For instance, Amazon applies a commission plus a monthly subscription or fixed fees per item sold, depending on the seller’s estimated sales volume. This way, different types of sellers can “find their place.” Another example: Airbnb charges sellers a low commission (3%) and collects the rest of its revenue by charging travelers 6-12%, which is a strong selling point during the recruitment process.
A Beneficial Commercial Policy
What advantages do you offer sellers compared to your competitors? Perks related to their activity can make a significant difference. Uber, for example, provides its drivers discounts on maintenance at Speedy, fuel through the DKV Card, or car washes with the Kleen app. These benefits are tied to completing a certain number of rides with Uber, but they offer undeniable added value to the drivers—a compelling reason to choose the platform.
A Short Payment Timeframe
Getting paid quickly is a critical factor for sellers. According to a 2018 Forrester study, 50% of sellers would consider using one marketplace over another if they received payments faster after a sale.
Services for Sellers
Some sellers may lack the skills to create their product listings, market their offers, or even have no logistical infrastructure. Imagine their relief if you offered services such as product listing creation, order management, or storage solutions. Offering these kinds of services would make it hard for sellers to say no!
A Smooth and Rich User Experience
Joining a marketplace is an opportunity for sellers to increase their audience and revenue, but it also requires them to learn how to use the platform. To maximize your chances of recruiting sellers, offer them a powerful tool: a simple interface, clear order and financial reports, and dashboards to help them better understand their customers. In fact, 45% of sellers and 47% of buyers will choose a platform that offers a better user interface and customer insights through a dashboard (Forrester 2018). Make it easy for sellers to choose you!
Your Marketplace’s Traffic and Reputation
Do you have significant traffic and an established reputation? These are strong selling points when recruiting sellers. In fact, 58% of sellers choose one marketplace over another based on the number of customers they can reach (Forrester 2018). It’s a virtuous circle: higher traffic leads to increased sales, which attracts more sellers, expanding the catalog, and so on… enough to fuel your marketplace’s growth.
What Recruitment Strategy to Implement?
Several methods are available to recruit sellers, and they can be combined to create synergy.
Direct Contact
Start by conducting competitive research to identify sellers in your market. Reach out to them directly—whether they are e-merchants seeking new distribution channels, sellers on other marketplaces, or physical store owners. Phone calls, emails, and professional social networks are effective for presenting your offer directly. Trade shows also provide opportunities to meet potential sellers face-to-face.
Partnership Strategy
Partnering with key players in the marketplace ecosystem is a powerful way to attract sellers. For example, partnering with a flow manager can help synchronize product listings between the seller’s site and your marketplace, making the process seamless. You can also partner with e-commerce or marketing agencies that recommend your platform, or with industry associations to gain visibility and recruit sellers.
Communities and Forums
Engage with potential sellers in professional forums and communities related to your sector. These spaces offer access to qualified, active sellers with low acquisition costs.
Advertising
Advertising can also be an effective recruitment tool, whether through keyword purchases or sponsored ads on social media. For instance, the VTC marketplace LeCab used Google Ads to recruit drivers, while Frizbiz combined customer and seller recruitment in the same ads.
Recruiting on Another Platform
Though somewhat controversial, recruiting sellers from another platform is common. Airbnb, for example, gained traction in its early days by posting ads on Craigslist, directing sellers toward its platform. It’s a clever way to introduce your platform to sellers who may not be aware of it.
Conclusion
Sellers want visibility, traffic, and revenue—nothing out of the ordinary. To recruit and retain them, the solution is simple: give them what they want! An attractive business model, quick payment, user-friendly tools, combined services, and strategic outreach methods will help you successfully recruit sellers to your marketplace. By doing so, you’ll complete your product offering and maintain the virtuous cycle of marketplace growth.
