The job of Marketplace Manager is becoming increasingly important. Zalando connected 180 new partners to its marketplace in the first half of 2020, while the GMV with the partner rate increased by 100% compared to the previous year. Demand from manufacturers to sell their products via marketplaces increased significantly again in 2020 in particular due to the shift from offline to online.
According to a study, 67% of manufacturers were already offering their products via online marketplaces by the end of 2019. On average, the marketplace sales share for retailers and manufacturers in the study is 28.2%, even though one in five do not even know how high their marketplace sales are. Marketplace sales will continue to grow in the coming years and this new sales channel will become increasingly important for brands and manufacturers.
According to the study by ecom Consulting and Internet World Business, one of the main reasons against online sales is the additional effort and personnel (45.6%). However, new sales channels and processes in particular require well-trained staff who are extremely familiar with the new area.
Source: Marketplace Study Germany - Retailers' and manufacturers' perspectives, September 2019, Internetworld Business and ecom Consulting
Only a few retailers and manufacturers have trained marketplace managers on their staff
However, the study also clearly shows that the marketplace business mainly relies on rudimentary half-knowledge. For example, only 9.7% of participants stated that they had a good knowledge of Zalando as a marketplace. Where is the knowledge supposed to come from? In most cases, it does not come from within the company and there are only a small number of current offers to learn the knowledge. What's more, apart from Amazon, the marketplace business is a fairly new sales channel that has not been learnt and practised for decades. There are therefore no established training programmes that have been in place for years. Most of the knowledge is based on trial and error, which is usually long-term and quite costly.
And this is where the danger lies. In a market that accounts for more than 31% of manufacturers' sales, knowledge is the power to increase sales, boost profitability and further develop the business.
Source: Marketplace Study Germany - from the perspective of retailers and manufacturers, September 2019, Internetworld Business and ecom Consulting
The eternal search for the Marketplace Manager
Some brands and manufacturers know and want to start and develop the marketplace business. The decisive factor is often the human factor. There is a lack of capacity and expertise to set up and establish the marketplace business in the current business. This is where the search for a "marketplace manager" often begins, but the demand on the market is much greater than the availability of well-trained marketplace managers with experience.
The challenge often starts with the job advertisement. What are the tasks of a Marketplace Manager? What profile and skills are being sought? Where is the Marketplace Manager positioned in the organisation? In which salary bracket is a Marketplace Manager positioned? This position is often newly established in the organisation, so many new questions arise.
Once these questions have been answered, it's time for the interview. But how should the interviewer ask the right questions to recognise whether the person is really suitable for marketplace management in their own company? And how can you judge the answers if you don't have any knowledge of marketplaces yourself? I see these hurdles time and again when it comes to getting started in the marketplace business.
Another option is to develop a Marketplace Manager from within the company's own ranks. In most cases, this person is one of the first in the company to take over this business. However, there are very few internal opportunities to acquire marketplace expertise, apart from the lengthy trial and error process.
My path was exactly that of learning by doing and trial & error. I was employed by Amazon as a vendor manager for four years and spent two years building up the marketplace business for several lingerie brands. As a result, I had and still have a lot of prior knowledge and at the same time, this didn't prevent me from making a few mistakes. These were sometimes costly because they led to wrong decisions or often simply delayed the process of launching the marketplace business considerably. As is so often the case, the devil is in the detail. For example, if I know that I need a certain tax number at a certain point in the process, which I still have to apply for, I can apply for it early on and not wait until I need it for the rest of the process.
The marketplace business has established itself and will become a significant sales factor for many brands and manufacturers in the near future. This makes it all the more important to have highly trained employees in this area. Only then can the marketplace business be managed profitably and with strong sales.
The big knowledge gap marketplace business
I keep realising that there are still brands and manufacturers who don't know what marketplace business means and what potential it has. At the same time, there are some who are well aware of this and don't know how to go about realising it, simply because they lack the necessary knowledge.
Some then rush headlong into the marketplace business without having calculated a business case and with the quickest possible start. However, after a year in the marketplace business, they often end up hitting rock bottom because the return rates are higher than expected and the desired success does not materialise. It is therefore better to inform yourself in advance, work out a strategy and build up the relevant knowledge. But where should the knowledge come from?
Marketplaces have been around for several years now and new marketplaces are constantly being added. As a result, the need for trained staff is increasing on all sides, for manufacturers, brands, retailers and the marketplaces themselves.
6 ways to learn about the marketplace business and train marketplace managers
So what options do you have if you want to get started in the marketplace business and don't yet have the all-important prior knowledge? Where and how can I acquire this knowledge?
1. various studies & analyses on the topic of online marketplaces and marketplace managers
There are a few studies that focus purely on the marketplace, such as the 2020 marketplace study by Gominga and the Marketplace Study Germany. There are also many other studies and analyses, e.g. from McKinsey, which also write about platforms and marketplaces, where the topic of marketplaces is usually one of many other topics. The studies and analyses are very good for getting a good picture of the market.
2. trade journals and newsletters on the subject of online marketplaces and marketplace managers
In e-commerce there are a number of good trade journals and newsletters that keep you well informed about the latest developments in the marketplace business in general.
Here are some of my favourite newsletters:
- Internet World: various newsletters with different focuses, my highlights are the daily newsletter about all topics in e-commerce and marketplaces, the Amazon World News newsletter about Amazon topics and the Commerce Shots for decision-makers
- Etailment: Digital e-commerce magazine about national and international trade
- Internet Retail: International E-Commerce News
- OMR: Daily newsletter focussing on online marketing, including on marketplaces
3. events & conferences around online marketplaces and marketplace managers
Germany currently has the ECD as a large conference focussing purely on marketplaces. Of course, there are other conferences and events that sometimes also have marketplaces as a theme, e.g. ISPO, the K5 or the OMR. However, these have other main focus topics and the marketplace is one of many topics there. These formats are often very good for gaining an overview of new developments and making contacts. However, the knowledge imparted is really more of an overview than detailed knowledge.
4. seminars on online marketplaces and marketplace managers
If you take a look at the marketplace manager seminar landscape, you will see a whole host of offers. On closer inspection, 90% of the offers focus on the Amazon marketplace. If you as a brand or manufacturer have Amazon as a pure focus, there are some really good formats for this. However, if you want to go online on several marketplaces at the same time, e.g. Otto, Zalando, About you, Limango, etc., then the offer quickly becomes very poor. In addition, the seminars here are also very good for gaining a good overview in the 1-2 day seminars. However, often only little detailed knowledge is imparted here as well.
5. books on the topic of online marketplaces and marketplace managers
Books are similar to seminars. There is a lot of very good and up-to-date literature when it comes to selling your products on the Amazon marketplace. However, if you search for "marketplaces" or "platforms", the search results of the books cover many industries and other forms of marketplaces, but not the form of online marketplaces that you want to know more about in this case. In addition, the books are often a few years old and, especially in such a rapidly changing market as the marketplace business, they are often no longer up to date. In the last 5 years alone, the number of marketplaces has doubled.
6. exchange of experience with marketplace managers and online marketplace experts
One option I often chose was to exchange ideas with other experts and marketplace managers. This allowed us to exchange tips and tricks that we didn't know in detail and that helped a lot. However, not everyone has such a large network and contacts who already work in the marketplace business.
Conclusion
The flood of information about online retail is constantly increasing. The dedicated knowledge about marketplaces is usually included in the information about e-commerce. However, it is often tedious and time-consuming to filter out and simply not up to date due to the fast pace of life.
I can find out about the marketplace topic at many seminars, events, conferences and newsletters. However, there is no real knowledge building because the topics are often communicated very top-down. For example, there are many presentations from Zalando about their partner course and the opportunities there. However, there is no detailed information on how the operational implementation really works. And with all the information available, I think that's the key point. I can read a lot about marketplaces at a glance. But how the marketplace business actually works in detail when it comes to implementation is usually left in the dark.
The operational hands-on knowledge about the marketplaces that would save me from making many mistakes in advance is not taught. So it's still trial and error and learning by doing when it comes to establishing and expanding the marketplace business.
Hands-on Marketplace Manager training course at Marketplace Uni
The eternal trial and error and learning by doing are simply tedious and costly. If I had known many topics and details earlier, my projects in the marketplace business would have gone online much faster. It is simply tedious to learn everything yourself and to do pioneering work that has already been done. The knowledge about marketplaces is already available and is constantly being developed further.
From April 2021, there will be new Marketplace Manager training courses, especially for brands and manufacturers in the fashion, sports and lifestyle industry. The aim is to build up detailed knowledge of the marketplaces and develop your own strategies in 3 months. This is not done alone and by learning by doing, but in an exclusive group of participants who exchange ideas with each other and with selected experts who impart exactly the detailed knowledge you need to be successful in this business. The aim is to achieve higher sales and profitability on various marketplaces such as Zalando, Amazon, About you, Otto, etc. with your own product range through greater knowledge. As part of the Marketplace Uni you can easily register for this training. For me, this is the most effective and easiest way to gain exactly the knowledge you need.
