The digital revolution has seen the setting up of online retail outlets from Amazon and EBay to Alibaba, among others. The world has literally moved to shop online and enjoy the convenience of deliveries being made to your doorstep.
Retailers have also realised that sooner or later their physical stores will become irrelevant and customers will no longer walk in and out of their stores as they prefer to shop from home using the mobile applications installed in their smartphones and tablets.
Moving to sell online is now in the strategic plan of any company worth its name. Retailers and companies can either start their own e-commerce website or sell their products through an already-established online marketplace. An online marketplace can be described as a place where you find products from multiple sellers, brands or individuals in the same platform. The owner of the marketplace is responsible for attracting customers, and anybody can sell on the platform – you just need to have the product, take a picture of it, and create a description before the product goes live on the website.
You can sell brand new or second hand products on the marketplace through drop shipping, where you keep the products and have them delivered to the customer on order, or have the marketplace owner store the products for you and deliver them to customers directly from their warehouse. This is referred to as a consignment. Customers then enjoy a wide variety of products on the same platform and best prices as vendors compete for sales.
Retailers who choose to start their own online marketplace enjoy higher profit margins as there are no commission deductions on sales, but setting up a marketplace requires a high investment and is expensive to manage. Choosing to sell on an existing marketplace exempts you from the costs of setting up a physical store, expensive rent charges, city council charges, advertisements and risks like fire and looting.
Going for this option in Kenya are companies like BATA, Text Book Centre, Armco, Nairobi Sports’ House, Victoria Courts Mia Mara, individuals and stall owners who have since moved to sell on the JUMIA Kenya online marketplace . The Jumia Kenya website www.jumia.co.ke is an example of a marketplace that allows you to sell only brand new products in their original packaging.
Sellers have the option of consignment or drop shipping as Jumia handles warehousing, marketing, customer care, delivery, aftersales and Public Relations. Retailers on the platform get the opportunity to showcase their products to the company’s large customer base and buyers have an array of payment options including cash on delivery, mobile money transfer and credit card, they also get to enjoy a free return and exchange policy of 7 days. An agreed commission will be charged only if you sell, with cash resulting from the sale being remitted to the seller at an agreed time.
The marketplace comes with the seller centre, a portal that gives retailers full access to all their operational transactions with JUMIA, as well as the opportunity to view their products and update stock and prices. Sellers can monitor their sales, as well as pending, shipped and cancelled orders on their own
Such a marketplace keeps fraudsters at bay, as Jumia will for instance inspect all products before uploading them online to ensure they meet the requirements and that their warranties are intact. They also provide free deliveries for products above KES 5,000 while those below the amount attract a KES 200 delivery fee.
The company is also among the first to launch mobile shopping apps for Android and Windows through which buyers can place orders from the marketplace and see a ‘marketplace’ on products listed on the platform for customers to know they are buying directly from the seller. For example, when you buy BATA shoes on Jumia, you are buying from BATA and not from Jumia.
OLX is a seller to customer online marketplace that allows anybody to sell their second hand products. Sellers take a picture of the product, create a description and upload it to the marketplace with their contact details. Interested customers see the product, contact the seller and plan a meeting place for the transaction.
Bidorbuy is another online marketplace that allows sellers to list products on their website. The entry of other online market players into Kenya has intensified the competition for customer data base, acquisition and website traffic to the advantage of both buyers and sellers.
Individuals intending to launch new products or set up physical stores can take advantage of online marketplaces to test the waters, through the seller centre like for Jumia, where they will be able to tell how customers are responding to their products, prices, brand and from which geographical locations most orders for their products are placed.
The race for the online marketplace is on, and the shifting customer base and the declining demand is no longer the worry of merchants. As they move to list across platforms and access new and wider markets, we can only join in and race or remain in the analogue world of the past.