Making your marketplace a success by delivering on its promises (episode 2 of 8)

Marketplaces have become essential channels, offering unique opportunities for both sellers and consumers. This second episode explores their advantages and limitations, while highlighting winning strategies such as ManoMano, a French success story that perfectly illustrates the potential of niche marketplaces.

Benefits for sellers

Businesses that choose to be on a marketplace do so primarily for easy access to an established market, benefitting from the reputation and clientele of the marketplace.

All their marketing efforts to develop their visibility do not disappear, however, but benefit from a gateway that allows them to test the appetite of the market while minimising their investment. This agility is largely enabled by the tools made available to the brand to facilitate the integration of the sellers’ catalogue.

Businesses that choose to integrate with international marketplaces such as Amazon or Ebay also do so to access new markets beyond their borders, and/or to take advantage of complementary services such as logistics or support for sellers to develop their business. But all this comes at a cost.

• Access to an established clientele
• Opening up to new markets
• Limited financial risk
• Speed of putting the catalogue online
• Advice and support

Risks for sellers

The royalties you pay by choosing to sell on a marketplace will of course diminish your margins. This risk might seem controllable, since it is part of the marketplace model, but dependence on a powerful marketplace can also bring fee increases that are not always justified and marketing expenses to ensure product visibility within the marketplace itself.

It is also risky being compared in three clicks to carefully selected competition, which has already gained reviews and ratings, or volumes of sales that position them more easily at the top of search results.

Catalogue optimisation is essential, and particular care should be given to accumulating opinions and reviews, which are important criteria for customers. These opinions and reviews are also linked to both product and service quality: the seller needs to be flawless in their management of stocks and delivery processes.

Selling on a marketplace also means fitting into a mould that restricts the presentation of your product offering. This limited freedom also includes the connection with customers: a seller is not able to personalise an offer during the purchasing process.

• Lack of visibility
• Increased competition
• Dependance
• Reduced margins
• PLoss of connection with the customer

Benefits for customers 

Marketplace customers are attracted by the fact that they are virtually guaranteed to find a product that suits them. That’s why many have acquired the “Amazon reflex”, which we will talk about later.

They are also assured of a seamless customer experience and unified services. Some customers are not even always aware that they are buying from a brand that is different from the one they were initially searching, which has given rise to the development of EU legislation in this area.

What will please the marketplace customer is to be instantly recognised, and to receive the advantages and advice that would come from their usual online shop.

Finally, all these elements can be summed up in one overall advantage: time saving. Everyone knows that the fight for attention is one of the main challenges brought about by digital, and customers – both individual and business - are impatient. This time saving promise has to be kept, which can turn out to be risky in more ways than one.

• Wide choice
• Consistent experience
• Recognition / Personalization
• Easy comparison

Risks for customers 

A consistent customer experience does not necessarily mean an optimised experience. If the growth of the catalogue results in a profusion of poorly ranked choices, poorly presented products, short descriptions and no clear advice or comments, the customer experience will be damaged and you risk losing visitors.

Finally, the customer may also be disappointed with the product they receive, the delivery time or after sales service. These elements are beyond the control of the marketplace and reinforce the idea that it must operate a rigorous selection process and monitor the sellers that it hosts.

Studies show however, that buyers are satisfied with their purchases on marketplaces. This proves that the minimum promises of price appeal and compliance with delivery and returns conditions are being respected. But customer experience throughout the process of search and product selection has to be outstanding, particularly if it’s going to appeal to younger generations who have great potential but also hold high expectations in this area.

• Wasted time during product selection
• Disappointment on receiving the product
• Difficulties in the relationship with the seller
• Disappointing customer experience for shoppers

Focus on a marketplace strategy manomano: the remarkable growth of a niche marketplace

Created in 2013, Mano- Mano exemplifies the success of niche marketplaces. Lockdowns in 2020, with the closure of specialist retailers and the refocusing of consumers on their homes, partly explains the success of this specialist in the DIY, house and garden sectors (10 million SKUs), but the growth of the startup had already started before this period.

The tale of a French unicorn:

Having studied the market, ManoMano’s two directors decided to embark on the sale of DIY products, which were not widely digitised in 2013 even though this sector was worth a considerable 30 billion euros in France and double that in Germany. By choosing a marketplace model the company was able to present a substantial offering very quickly, enabling it to “create supply and demand at the same time”.

ManoMano quickly focused on transforming customer experience by using digital technology and data. Notably, the company developed algorithms for product rankings and focused on simplifying the buying process while developing a community of customers and DIY experts.

In 2021, ManoMano raised 300 million euros, which propelled it to the rank of unicorn, with a valuation of 2.6 billion dollars, on a turnover of 1.2 billion in 2020. The marketplace plans to hire 1000 people and to continue its expansion in Europe, where it already generates 40% of its turnover.


Among the ingredients of ManoMano’s recipe for success

• The choice of selective marketplace positioning, with 3600 merchants, makes it possible to manage relationships better and support them in presenting their products well.
• The creation of a community of DIY experts, who are able to advise on products and even installation.
• A high level of agility, which allows them company to manage the strong growth, notably in 2020 when sales multiplied by four during the first lockdown.
• Technological expertise, with 50% of staff dedicated to the development and maintenance of the platform and data exploitation.

"Our unique selective marketplace model allows us to manage our relationships better and to provide better customer experience." Céline Vuillequez, Deputy CEO at ManoMano

Photo credit: ©istock