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Taking their cut – how online marketplaces leave you short.

Most people have heard of an online marketplace. Businesses list their offerings and compete for customer attention based on pre-defined filters such as price, location and reviews.

You might sell independently or on marketplaces. But the ever-increasing demand for consumer choice has seen their use skyrocket – 92% of people shop online using one (Cloudwards). It’s a direct route for customers to your business. 

But are they really elevating your brand? Let’s explore six factors to consider before listing on an online marketplace. 

slice of pie

1) Slice of the pie – fees

Everything comes at a price – it’s how business works. You’re listed on their site; naturally, it comes with fees. But the expense of being on a marketplace ultimately hikes your prices. And that costs the end customer.

Every time you sell a product or service, they take a percentage of each sale. Marketplaces tend to charge between 5-10% of products sold, while services can be as high as 15-25% (Applico). You’ll have to raise what you usually charge to cover those costs. The fees are used for the marketplace’s upkeep, but having them so high affects you and your consumers’ pockets. 

Customers may be confused about seeing one price in-store but something entirely different on the marketplace. It’s not your fault but it could negatively impact potentially loyal customers. After all, everybody wants the best deal. 

Sharing your own Booking Page on your website and social media allows you to sell services on your terms. It’s yours to customize as you see fit. Customers see one price, which you have total control over. Speaking of which… 

2) Race to the bottom – pricing pressure

Online marketplaces have limited space to showcase your business. When you think of a market, you picture beautiful stalls and charismatic salespeople. It’s an opportunity to show customers who you are and what your brand is about.

The online marketplace doesn’t offer the same luxuries. You’ll get a small square for your company logo and a modest-sized description – if you’re lucky. How can customers get the full picture from a tiny box?

Direct competition without branding leaves price as the only obvious differentiator. It kickstarts a race to the bottom. Customers lose out on a sense of quality, story or connection; diluting their decision-making process to focus only on what’s cheapest. 

The current inflation rate has pushed consumers to seek out cheaper alternatives. But 81% of brands have raised or will increase their prices (Shopify). Customer experience is more essential than ever – proving your value comes from more than just a price point. 

ducks in a row

3) Losing your brand identity 

As mentioned above, marketplaces don’t cater to a brand’s freedom of expression. Customer connections are curtailed due to a lack of interaction with your business. A strong brand can lead to improved recognition, relationships and retention, but marketplaces often influence:

  • Storefront design – The marketplace’s brand is the star of the show – it’s their design front and center that all vendors must use. Your control is limited, and the visual presentation used to enhance customer experience is lost.
  • Offering descriptions – These are often short; leaving less room to differentiate services and highlight unique selling points.
  • Customer Communication – The marketplace becomes the third-party point of contact between business and customer. It creates obstacles in responding to customer inquiries or complaints, lessening opportunities to build personal relationships.
  • Branding Guidelines – Branding guidelines may be strict about maintaining a consistent brand image across the marketplace. You’re more likely to keep in line instead of standing out. 

Brand identity is key to the customer experience. People need maximum exposure to connect with your business. Nearly 40% of loyal customers will use your service, even if cheaper options exist. But 60% of consumers will tell others about brands they’re dedicated to (yotpo). It’s growth just waiting to happen. 

There are a ton of ways to customize your brand and establish your story. With a powerful message, you’ll see more bookings pour in. It’s an essential part of customer connections – don’t lose it.

4) Showcasing your competition

A marketplace is a crowded place. Similar businesses gather to attract customer attention and land a sale. The only problem? You’re all clumped together with no real means to differentiate. Consumers then miss out on unique selling points and features. 

70% of shoppers already feel tech makes it easier to switch to a competitor (Help Scout). An educated consumer makes all the sense in the world – as long as they get the whole picture. A marketplace may show a business’s various prices, services and logos. But a brand can’t display all it has to offer when stacked in a list with the competition. 

The logos blend into one as you scroll down the page without any real sense of story and message. The competition isn’t really between you and other businesses at that point; it’s you vs. the marketplace. If you’re new, you might find yourself swimming in an already saturated market. 


5) Limited customization

Creating value and delivering on expectations go beyond price and service. Your mission, message, story, marketing, style and substance all play a role in crafting the perfect customer experience. Connections begin at first impressions – wouldn’t you want to be in control of that?

Marketplaces don’t create brand loyalty for vendors; they remove any opportunity for customization. Whether it’s your branding, features, discounts, one-to-one personalization or a direct route to book a spot on your calendar, you want to influence every part of your customer’s journey. 

73% of consumers switch to a competitor after multiple bad experiences — with over half leaving after one unsatisfactory interaction (Zendesk). Your opportunities to impress are limited; nail it every chance you get. 

Customizing your Booking Page allows you to showcase all the good stuff: team members, services, payment methods and glowing reviews. Having a space where customers can get a sense of who you are can help grow brand loyalty. 

6) Online marketplace dependency 

Marketplaces can be a good place for new businesses to find their feet. You may still be fine-tuning your branding, so it’s understandable using these spaces to get yourself out there. They can be a great way to find new leads and establish early customer relationships.

But you want your business to be independent of the marketplace. When clients book your service through your regular channels, it creates loyalty and cements your connection. If customers continue to look you up through a marketplace, they may find an alternative. 

Becoming dependent on online marketplace sales subjects you to their changing landscapes. Policies, algorithms and sponsored posts may see your service tumble down search rankings without warning. There have been concerns, and it’s not something you can predict in your business plan. 


To marketplace or not to marketplace?

While there is a trade-off, there are benefits too. Whether you don’t feel comfortable starting off on your own, have yet to fully establish your brand or need to reach more customers, listing on an online marketplace could boost your business.

The upside

  • Access to a larger customer base
  • Simplified transactions
  • Established brand
  • Lower overhead costs
  • Analytics and insights

Food for thought

  • Fees
  • Competition
  • Pricing pressure
  • Branding control
  • Limited customization
  • Marketplace dependent

Whatever your preference, it’s key to think of the marketplace as a tool. You can use it to capture more leads, forge new relationships and extend your reach. But creating customer connections through your story and branding excels their experience. 

It’s a good place to start, but the buck stops with you. If you’re wondering how to build your brand, explore our blog and keep your eyes peeled for future tips.

Happy scheduling!

young lady smiling

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