Starting a marketplace business is: complex, digital, uncomfortable (because new), intangible and you may go through a lot of resistance until the first products are live and sold online through the platform.

In the following we would like to compare the opening of a "normal" retail store with the opening of a marketplace channel. To make it more specific:

What is the difference between opening a 100 m² store in Munich and a new marketplace presence through Zalando's Partner Program for Germany?

It's the same, same but different.

You need the following for both the Retail Store Opening and the Marketplace Opening

Employees

Whether they're setting up your retail store, stocking the products or advising your customers, you need employees right away. This is also the case for the marketplace business. Here, your employees don't put products on shelves and serve customers in the shop, but they have to create all the structures so that the products can go online first of all. They have to set up and integrate data structures, processes and software. Marketplace managers have an incredibly broad range of tasks, especially at the beginning.

Merchandise

In the retail store, you need merchandise that you show to the customer on site so that they can try it on and buy it. In the marketplace business, you need the goods physically in a B2C warehouse to be able to send them to your customers and you need the appropriate online content for it. This means the right images have to be created (they have to be in accordance with the guidelines of the respective marketplace) and all product data should be set up properly. Only then can the goods be presented online.

Equipment

What the shop fittings are in the retail store, i.e. shelves, mannequins, clothes rails etc., the software is in the marketplace business. Software ensures that the goods are visible online.

IT & Software

Without cash register systems nothing works in a retail store and without marketplace software you will never put an article online. IT & software, as different as they are in scope, without them nothing works. And in the marketplace business software is very extensive. You have to deal with different interfaces and providers until you have found the right strategy and the right partner for you.

Marketing

If no one knows that you are opening a retail store, then no one will come to the opening. This is why you will most likely place different ads, distribute flyers or the like. In the marketplace business, too, customers won't know automatically that you are selling via e.g. the Zalando marketplace from now. In order to present yourself online among the wide range of online shops in your category, you can take various online marketing measures to become more visible. In both cases, the more visibility the better.

Conclusion: This is where the marketplace opening scores points

Everything you need to open either a retail store or a marketplace business is different, but similar in many ways. 

For both, it takes about 4-6 months in the best case scenario until you can "open" the business. 

However, the costs differ considerably: for a retail store of 100 m², costs of approx. 100,000-180,000 € arise. The costs for starting a marketplace business, on the other hand, are more manageable: approx. 10,000 - 25,000 € for onboarding, integration of software and other service providers. In addition, you can easily expand the marketplace business to include other marketplaces without high additional costs.  

The difference in customer reach is even greater: if we reach an approximate number of 2 million customers with our retail store in Munich, we can reach 46.3 million customers in Europe through Zalando.

So a retail store opening compared with a marketplace opening are "same, same but different". The conditions are different and yet somehow similar. However, when it comes to the costs and the potential customers you reach, the retail store doesn't stand a chance against the marketplace business.

If you want to learn more about how to make your opening in the marketplace business a success, check out our Marketplace Uni courses .

Request more information or send us a message. We will be happy to help you!

Der Beitrag Marktplatz Opening vs. Retail Store Opening erschien zuerst auf Marketplace Manager Training.

Do you remember the famous Zalando slogan "scream for joy or send it back"? It first hit the screens in 2012 and brought Zalando a lot of attention. In recent years, not only the iconic slogan has changed, but also Zalando and its business model. The company has evolved from being an online shoe seller to being the biggest fashion destination in Europe and step by step from a pure e-commerce retailer to an online marketplace. For the latter, Zalando has developed its Partner Program as well as its Connected Retail Program. Through the Partner Program, you can not only connect your fashion brand directly to the marketplace, but also use additional services such as Zalando Fulfillment Solutions (ZFS) or Zalando Marketing Services (ZMS).

If you sell your brand on Zalando, you are also well positioned internationally, because Zalando is already online in many European countries and is still expanding.

In the following, you will find out in detail what other advantages the Zalando Partner Program has for brands and manufacturers. One thing first: the sooner you start, the sooner you'll be on the winning side with your brand - Europe-wide!

What is the Zalando Partner Program?

Zalando sees itself more and more as an online marketplace and is innovatively planning ahead in this direction. As the first point of contact for everyone interested in fashion, Zalando is already nowadays unbeatable and will become even stronger through new strategies. With its Partner Program, the internet marketplace enables fashion brands to reach their end customers the easiest way possible. This means that not only well-known brands from the fashion industry will benefit, but also new labels. The currently more than 48 million active Zalando customers are a guarantee of success. In addition, there are 23 European markets that Zalando serves up to now. In order to keep a cool head in view of this large reach, Zalando offers you as a brand numerous analysis tools with the help of which you can monitor and continuously optimise your performance on the platform. Last but not least, the Zalando Partner Program gives you control over your pricing at all times, but more on that later.

Difference between Zalando's Partner Program and the Connected Retail Program

While the Zalando Partner Program is aimed directly at you as a brand, Zalando's Connected Retail Program is primarily geared towards fashion retailers. In other words, retailers who also sell your brand to the end customer. That is the biggest difference between the two program types. Both programs are certainly interesting for the fashion sector. Connected Retail, as the name implies, is primarily intended for stationary retailers so that they can connect their shops to Zalando's online marketplace and increase their sales. Although the Connected Retail Program can also be used directly by brands, they always need a retail shop, which not all brands have. In addition, the Zalando Partner Program offers brands and manufacturers another decisive advantage: they can manage their business centrally from one warehouse and do not have to manage different warehouses at the same time. Therefore, the Zalando Partner Program is the better solution for them.

Advantages of working as a brand with Zalando's Partner Program

There are five striking reasons why you, as a brand, should work with the Zalando Partner Program. The large reach and the established structure of the Zalando Partner Program offer you the ideal basis for more sales, marketing and international awareness.

1st advantage: make up for lost turnover from the wholesale sector

Zalando is focusing on expanding its marketplace business and is therefore strengthening its Partner and Connected Retail Program. For example, Zalando wants to double its gross merchandise volume (GMV) to 30 billion Euros by 2025. The share of the platform business in the GMV is expected to grow from currently 32 per cent to 50 per cent during this time.

At the same time Zalando wants to reduce its wholesale business. Therefore, it is better to start with Zalando's Partner Program sooner rather than later. The earlier you join, the further ahead you are of your competitors. But of course that's not the only advantage you get for your brand at Zalando.

2nd advantage: Outstanding brand positioning on Zalando

To present your brand in the best possible way, Zalando supports you using its own concept for success. More than 45 million customers use Zalando internationally in 23 European countries, and the number is growing. With your brand, you are entering a pool of customers who are just waiting to discover something new at Zalando. Right from the start, you will find customers who are active and willing to buy, and you will work together with the biggest fashion player in Europe. Your brand is where your customers are: They don't first have to find their way to you through costly marketing strategies. This not only saves you money, but also an enormous amount of time.

3rd advantage: Keep control over your brands at Zalando

Zalando's Partner Program allows you to be your own boss. You decide which of your products are sold on the marketplace, how you price them and in what way you want to present the products and your brand. You control your marketplace business yourself and thus retain control over your brand positioning. You will most likely find retailers on Zalando who offer your brands. They do not use the Partner Program, but the Connected Retail Program, as mentioned earlier. You cannot influence the retailer presentation of your brand. However, if you are at the forefront of the Zalando Partner Program, you keep control over the products you offer.

In addition, you can also sell products through Zalando's partner program that were not covered by wholesale. For example, you have the possibility to offer long-tail products that were not previously ordered by the Zalando buyers, but could be interesting for your customers.

4th advantage: Determine your own price on the online marketplace

The price sovereignty is entirely in your hands, i.e. you can determine the price at which you sell your items. Of course, you should consider the competition. Especially if other retailers offer products of yours, you want to avoid competing with your own brand. Ultimately, however, it is you who determines the price of your products and on Zalando you can be sure to not be subject to any restrictions or limitations in this regard, as can be the case with other marketplaces.

5th advantage: Usage of Zalando Fulfillment Solutions

To get a clear overview of the benefits of Zalando Fulfillment Solutions, it is important to understand what Zalando Fulfillment Solutions (ZFS) are in the first place. With ZFS, the Zalando logistics network and its services are at your disposal. Whether you want to ensure that your products reach your customers on time or that returns are handled quickly and easily, you want to reduce your logistics costs or internationalise your business, with Zalando Fulfillment Solutions (ZFS), Zalando Shipping Solutions (ZSS) and Zalando Return Solutions (ZRS) you will always find the right solution.

It is entirely up to you whether you want to use all of the services 100%, partially or not at all. Of course, you are also free to use your own logistics to deliver your goods to the end customer. Nevertheless, ZFS offer enormous advantages that turn the original five reasons to join the Zalando Partner Program into eleven beneficial reasons that speak for the marketplace.

Your advantages thanks to Zalando Fulfillment Solutions

#1: Save logistics costs

With ZFS, Zalando has the best price/performance ratio in terms of logistics costs compared to most marketplace logistics providers we have seen so far. The prices are usually better than the prices you get from DHL and Co. as a brand. This is simply due to the large volume that Zalando handles day after day. This also applies to the prices for delivery to other countries. In addition, the pricing is very transparent, as almost all contents are combined in one price. This makes the service easy to compare and the business case easy to calculate.

And the best part of it for you is not only the cost and time savings, but the fact that you can also use it to cover the logistics for other marketplaces if necessary.

In addition, Zalando takes over your B2C logistics, which is especially interesting if you don't yet have B2C logistics yourself and would have to build it up first. Most brands have B2B logistics in place and can easily serve their wholesale partners, but there is a significant difference between sending 100 large shipments per year and sending 100 small packages to end customers every day.

In addition to shipping to the customer, ZFS also handles all customer returns through ZRS and ensures that they are processed properly and to the satisfaction of all parties involved.

#2: Promote sustainability with Zalando Fulfillment Solutions

ZFS are also a benefit for the environment, because the customer's orders are collected and packed into one shipment, so that no more parcels than necessary are sent on the journey to him. This means greater convenience for the customer, because he is served by one carrier and does not have to visit different parcel centres to get his order in case of doubt. The returns system is handled in the same way by Zalando. Both services are not only good for the environment, but also convenient for your customers.

#3: On-time comfort for your customers

Zalando is also very concerned about keeping fast delivery times so that customers can enjoy the full comfort of the online marketplace. That's why Zalando ensures that your brand's products arrive on time and are delivered properly. If you, as a brand, fail to meet the Zalando Guidelines in terms of delivery speed, Zalando will rigorously punish you. In the worst case, the penalty can lead to your products no longer being available on Zalando.

#4: Recognition & visibility

As a result of ZFS, your product is more likely to win the Buy Box on Zalando, which makes it stand out yet again. In other words, your product will be displayed in a prioritised way on Zalando, especially if there are multiple sellers of the same product. The functionality is similar to Amazon's Prime Badge. This increased visibility puts your product in the customer's focus more quickly and makes it more likely to be bought.

#5: Easy internationalisation

As of October 2022, ZFS makes it possible for you to have your brand's products delivered to 17 countries without any problems. Zalando has already connected all relevant carriers per country to its platform. This means you don't have to deal with contract negotiations and technical interface development yourself.

Moreover, this way you can test markets such as Switzerland or Norway. These are countries that are either not part of the European Union or have high customs duties. Please note that you may have to take into account additional costs when trying out these countries. Still, it is a great way to test an expansion for your brand without taking any risks.

#6: Sale - sell-off via Zalando

Zalando Fulfillment Solutions also offer you the opportunity to automatically participate in the Zalando Lounge program. This is an exclusive and closed Zalando shopping club where customers can purchase products at reduced prices and thus also buy your brand at a discount. If, for example, you were not able to sell your assortment for the season, it will automatically be moved to Zalando Lounge and offered there at a discount, if you wish. In this way, you limit the amount of old stock in the ZFS warehouse and have an easy way to re-market your items without having to relocate them. By doing so, the risk of having to dispose of old stock is reduced.

By the way, ...

... if the above-mentioned advantages have not convinced you of ZFS, perhaps this one will: From our expert network we know that it is necessary to reduce the price of one's products by about 5 per cent in order to win the Buy Box if one does not use ZFS.

Conclusion: The best opportunities with Zalando

Convinced? The Zalando Partner Program coupled with ZFS offers you as a fashion brand the great opportunity to sell more profitably by increasing your sales and reducing your cost. In addition, Zalando enables you to expand the awareness of your brand. Get started now and your brand will benefit over-proportionally. The advantages are obvious. So don't waste any time. If you don't know HOW to get started or are unsure about the specific steps to take, our Marketplace Uni courses will help you. Here you will learn everything you need to know to successfully join the Zalando Partner Program or various other marketplaces to boost your sales.

Der Beitrag Zalando Partnerprogramm: 5 Gründe als Marke jetzt damit zu starten erschien zuerst auf Marketplace Manager Training.

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.

Source: https://www.ecom-consulting.de/marketplace-landscapes/ 

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.

Der Beitrag Marketplace Manager werden: 6 Wege dein Wissen aufzubauen erschien zuerst auf Marketplace Manager Training.