eCommerce giants or horizontal marketplaces like Amazon and Walmart/Jet.com have set the standard for marketplaces so high that anyone making a new entrance can feel pretty sceptical about their success. Well, they might be the world’s largest general stores with million users but that doesn’t mean you will never reach that stage.
There’s something unique in all that cannot be copied, competed or beaten. Same goes with Amazon and Wallmart. They might be the jack of all but they can’t compete with your mastery in specialized products or services in a specific segment of the market.
Specialized marketplace or niche marketplace can be described as a big fish in a small pond instead of being a small fish in a big pond. Means, a vertical marketplace focused on a small but specific and well-defined segment of the population by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms. It is a very attractive business model with the ability to scale and capture a whole market.
So, is it worth?
There is no doubt that Amazon is ruling the eCommerce world but, there is no winner takes it all dynamics here. A lot of niche marketplaces are taking their baby steps into it and you never know when your specialized marketplace will become a tough competition for Amazon or others. Here’s how you can achieve that;
1. Figure out what distinguishes you
From a pin to a king-size bed, Amazon has it all. The most interesting part about it is its search option. Before even the customer finishes typing their search, the hundreds of products show up. You can scope out options in the unfamiliar territory of products from here. You can address the need of customers by offering them a complete set of specialized products that are hard-to-find or are in less demand.
2. Conduct targeted marketing
With Amazon selling almost anything, targeting specific customers with specific deals is not so possible in it. They do offer deals via Amazon Prime but most of the time they are on the products that are irrelevant. While with the specialized marketplace you can market your products to targeted customers personally. It also gives you an opportunity to conduct timely or seasonal marketing campaigns as well.
3. Offer stand-out services
Amazon is an umbrella where sellers come together to sell their products. Hence, they are the ones who ship the products so if anything happens it’s the third-party to be blamed but yes, Amazon takes care of that as well. While in your specialized marketplace you will be handling the shipping and delivery, hence by making your service level outstanding, you can beat Amazon for sure.
Status of B2B eCommerce
B2B sales are 2-3 times the size of B2C retail and Amazon Business is anticipated to be leading the chart with more than 10 billion in gross merchandise volume. But you too can achieve the same success with your specialized marketplace. In spite of the growth of Amazon Business, there is still room for specific market places.
Mergers and Acquisitions at Retail
The retail segment has a volatile environment. Retailers are often getting criticized by the equity markets for failing to innovate or adapt their business model within the 21stcentury. Linear e-commerce campaigns never compare the huge benefits consumers gain by shopping from a multivendor marketplace with third-party sellers, such as Amazon offers. Marketplaces have the most comprehensive collection of product inventory and catalogue having competitive prices because third-party sellers are competing against each other in all moments.
“Many of the challenges that retailers are currently facing are due more to a lack of innovation and investment in technology, and that they are not able to compete with Amazon,” said Alex Monahan, a consumer products senior analyst at tax and consulting firm RSM US LLP.“
What are the after effects?
For retailers to compete with Amazon, launching a marketplace and finding a niche will be the right thing to do. And don’t worry as opening up a niche marketplace will only do you good if done right. So, if you are still wondering whether to invest in or not, here are some more reasons to help you make a decision.
Niche marketplaces focus on the weaknesses of horizontal marketplaces and intensely focus on a product or service and deliver a vastly improved customer experience. In short, they focus on doing one thing rather than multi-tasking a hundred things like horizontal marketplaces. And the benefits of doing so are;
- Increased trust
- Targeted marketing
- Improved customer experience
- Complete Focus on a particular product
- Proactive vendors
- Transparent communication
Ultimately the success of any marketplace whether vertical or horizontal depends upon how you run it, right team and tools. The first two we are sure you have nothing to worry about but for the later part, you must not compromise and settle for anything less as it will cost you a lot instead. Hence, reach out to us for an efficient b2b multi-vendor ecommerce solution that will work for you in every way.
About the Author!
Rakesh Jain is the co-founder and CEO of MobiCommerce, a leading multi-vendor marketplace software solutions provider. When he is not busy taking the company to newer heights, he writes for top publications, teaching eCommerce store owner’s different ways to manage, grow and scale their business.