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by Daniela Köhler
If you want your product to impress on various marketplaces, a number of adjustments must be made. In order to achieve this, many companies use intelligent software. However, only a few companies have realised that full shopping baskets often result in high costs due to their chosen billing model. Find out what alternatives are available.
From A for Amazon to Z for Zalando: marketplaces are a main driver of sales in digital commerce. Contrary to slightly declining general trends, they were able to further increase their turnover in 2022 compared to the previous year (+2.9 per cent), which now accounts for around 50 per cent of the total online commerce. In line with this, it is important for brands or retailers to be represented as widely as possible. This pays off, not only in terms of increased sales, but also in terms of achieving a greater reach, higher levels of awareness and improved visibility.
However, this is not something that can be achieved easily since marketplaces place enormous demands on market players. Data quality and profitability must match, and in the event of delivery periods and cancellation rates being exceeded, operating companies can be faced with penalties. With a manual set-up, this is virtually impossible to manage. Brands and retailers are thus increasingly relying on the automated integration of their product range in all relevant national and international online marketplaces, with the help of intelligent software solutions.
Powerful middleware, such as novomind iMARKET, provides all of the tools required for efficient and strategic marketplace business.
In addition, product ranges and prices on different marketplaces can be controlled independently and individually. For example, through discounts on products or dedicated campaigns on marketplaces. The connection is also uncomplicated and can be achieved either via simple API interfaces or individual integration in the existing e-commerce architecture.
There is no question that intelligent middleware can really get your marketplace business going. However, this success does not come for free. To use the corresponding software, you either have to pay a fixed price or a commission. The question is: which billing model is most suitable for your business? This is not that easy to answer in general terms. However, the following example calculation clearly shows how both models can affect your costs.
Let’s assume a brand manufacturer uses a market competitor’s middleware to connect to a marketplace with 11,000 order items. The calculation of costs for a commission-based model also includes the value per shopping basket item (average 100 euros), the rate of return (average 45 per cent) and the sales commission (1.2 per cent). Based on these figures, the monthly cost of using the middleware is €8,260 ((11,000 x 100) x (0.55 x 0.012 ) + €1000 SaaS fee = €8,260 when considering turnover after returns).
The more the better: novomind iMARKET is particularly beneficial for large shopping baskets
Contrarily, novomind iMARKET calculates costs on the basis of the number of order items and not on the basis of a percentage of the shopping basket value. In practical terms, this means the model is particularly worthwhile for companies with an average product value of 30 euros, since calculations are solely based on the number of order items in a month and not on the value of these items. Companies with somewhat higher-priced items in their product range particularly benefit.
The clear advantage of the novomind iMARKET billing model lies in its predictability. Even with a very high number of sales, the fixed costs per shopping basket remain stable. novomind offers yet another advantage: the advice of our experts. They have extensive experience in marketplace business and know how to best boost sales.
Our experts have the right answers to these questions. Not only do they know strategic marketplace business inside out, but they also understand your requirements and processes down to the last detail. Furthermore, they are experts on creating optimal conditions for making money at Amazon, Zalando, Kaufland & Co.
Are your fixed costs per item sold increasing dramatically despite a high number of sales across various marketplaces? If so, talk to the experts at novomind. We will be happy to calculate various price comparisons with alternative parameters with you in order to find the right billing model for you.
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