Amsterdam, NL – It’s become commonplace among companies to sell their goods on online marketplaces. It allows these companies to reach countries across the world which they may not have been able to reach beforehand. These platforms allow for extra sales and bring the company attention that it may not otherwise have had.
However, some retail companies are beginning to leave online marketplaces, though others are still hanging on. One such company, Bax-Shop, has left online marketplaces, like Amazon.But the online department store, fonQ still see opportunities with sticking to the Amazon route. With each still enjoying success, people must question which option is right for their company.
Bax Shop, like so many other companies, decided to utilize Amazon to sell the musical instruments and accessories that they offer but have recently taken their products off such marketplaces. Instead, the company has made the move to focus on its own online channels and the products they offer in their physical stores.
Some believe this choice is unwise as they’re projected to lose 2.5 million euros in additional revenue each year. But Bax Music sees the split as an opportunity to build brand loyalty among their customers and avoid problems that they view are often brought with selling on online marketplaces. When someone sells on Amazon, they have to pay commissions, order management, and the pressure of high competition. Bax-Shop felt these cons outweighed the pros.
FonQ, on the other hand, started their relationship with marketplaces like Amazon as a test. They wanted to see whether or not customers outside of the Netherlands had the same needs as their customers inside the country. They’ve found that they can reach a much larger audience through Amazon. Their large assortment of products sells better on Amazon since it’s harder for them to build customer loyalty thanks to their many types of items for sale. For their type of company, marketplaces prove to be more beneficial than anything else.
Whether or not a company should use online marketplaces to reach more customers is becoming a serious question. Depending on what a business is selling, it could be very beneficial. In the case of stores like Bax Shop, who specializes in very specific kinds of product, it can also be seen as more harmful to put their product on sites like Amazon.
For companies that are questioning whether they should add or remove their items from marketplaces, it will be beneficial to keep an eye on how these two companies do in the long-run with their choices.