Brand Creation in the Age of Amazon and other Marketplaces

Publication: Thursday, December 6, 2018.

DataHawk is a web-based Amazon Analytics Tool that combines a Keyword Ranking Tracker, a Product Tracker, a Market and Keyword Analysis tool, and a Product Research engine. This is a blog post where we share some musings on how it has become easier than ever to launch and scale a brand, especially on marketplaces.

Once you take a look at the Gross Merchandise Volumes in Amazon, Alibaba, Etsy, and eBay, it becomes clear that we live in the age of online marketplaces. In the US alone, online retail sales are bound to reach over half a billion dollars this year. Every day, there are more and more online shoppers who would prefer shopping online over shopping in a retail store at any given time.

Purchasing from a trustworthy brand became almost the same as purchasing from a trustworthy marketplace. This new age phenomenon caught our attention. Especially the part of creating a brand in the age of marketplaces.

Repeat Purchases Belong to Marketplaces

The “Shopper-first retailing” report by PublicsSapient and Salesforce is some great study material. It tells us that 47% of shoppers turn to marketplaces for repeat purchases. This is a very significant number. It tells us that the increasing number of different shopping channels has taken a big slice of the market from retailers.

This is why these marketplaces continue to exponentially grow while there are more and more retailers struggling to keep their doors open in all their stores spread around the country, and across continents.

The strength lies in the quality of brands and the customer service. But in the digital age, this is not enough. Customers are also looking for convenience. And if anything else, convenience is exactly what marketplaces have to offer to customers.

Marketplaces and First-Time Purchases

First-time purchases were dominantly in the retailer’s domain. It appears that customers prefer seeing products in person before they purchase them for the first time. But with all those high-quality images, unboxing and review videos online, the tides are shifting in the favor of marketplaces.

The report we’ve mentioned above tells us that 28% of shoppers purchased an item for the first time through Amazon in 2018. This is a significant increase from last year when this number was 22%.

What changed? Over the years, marketplaces have become brands. People no longer need to visit a physical store to make sure that the brand they are going to buy from is trustworthy. The very fact that it is listed on Amazon, or on any other marketplace for that matter, along with reviews, images, and videos, is more than enough for people to make a purchasing decision. Not to mention the convenience of shopping from your bedroom or on the go and all the discounts.

Creating a Brand in the Age of Marketplaces

Whether you want to start your private labeling or retail arbitrage business, building a brand out of it today is so much easier today.

Reduced Costs

In the past, there were probably countless cases when people had to drop their ideas of creating a brand because of the huge costs associated with it. Launching, owning, and running a retail business is a very expensive endeavor, in fact. Besides the required experience, to succeed in this industry, one would need cash to pay the rent, hire staff, and keep ongoing maintenance.

Marketplaces and the internet rendered these costs sustainable even for those with budgets below $1,000. Even if one would decide to run their own ecommerce website, creating and launching it is a bargain. Thanks to all those easy to use ecommerce platforms, such as Shopify, WooCommerce, and BigCommerce, everyone can get a chance online.

Not to mention the reduced costs from not having to hire a professional market and product analyst to identify the best products for retail arbitrage or private labeling for a target market. With an easy to use tool such as DataHawk, one could do that on their own. Feel free to check our guide on how to use DataHawk to do market research and get product ideas.

Better Marketing

Moving retail and brand building efforts into the digital landscape puts everyone in the position to leverage the most effective marketing strategies. For instance, optimizing listings on Amazon to benefit most from Amazon’s A9 search algorithm will result in increased sales almost instantly. Not to mention the PPC marketing options all major marketplaces offer.

Excellent Service

As we have already mentioned, major marketplaces are already perceived as trustworthy brands by the shoppers. They provide excellent service and people are used to ordering items from them. Anyone can build the brand on these already laid out foundations and leverage the trust and high-quality service.

It Requires Less Time

At last, we come to the very important factor - time. Becoming a retailer and building a brand takes a lot of time. It could take months of careful planning and perfect execution before a young brand can see profits from all the time and cash consuming efforts. With marketplaces, anyone can start building a brand and sell online in a matter of minutes.

Fewer Risk

Building a brand by concentrating efforts on selling in retail stores brings a lot of risks. The most destructive ones being the capital and inventory risks. Building a brand by selling products on any of the marketplaces, including Amazon, comes with fewer risks.

For instance, you can use DataHawk to monitor market trends, track your inventory in real time and resupply accordingly. The worst thing that can happen is running out of stock which will affect your profits until the new batch of products comes in. The good thing is that, meanwhile, you won't have to worry about paying rent or salaries to your employees.

The convenience of creating a brand and selling over existing networks in established marketplaces has already been recognized by influencers worldwide. We can see many of them creating brands and turning their follower base into a customer base, all thanks to the convenience of selling via these marketplaces.

Brand creation in the age of marketplaces has become a straightforward activity. It requires less cash and time and brings almost immediate results. This is why it is safe to assume that we will be seeing a lot of new names entering marketplaces, trying to get their own slice of the cake.