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Small businesses make up majority of online marketplace sellers

Date: November 09, 2017

Category: Industry news

New research by GS1 UK has found there are six different types of businesses using online marketplaces to sell goods and small businesses make up the majority of these enterprises.

And while different enterprises have diverse reasons to use online marketplaces, GS1 standards help businesses, consumers and the online platforms themselves by ensuring accurate listings and robust product data.

Over the past few years, we have spotted a growth in new members joining GS1 UK to secure a GS1 product identifiers to help them trade on online marketplaces.

In 2016/17, 67% of our members joined to trade on marketplaces and overall, 9,000 members told us they use online marketplaces to sell their products.

To better support this growing section of our membership, we carried our market research with White Space to try and understand the different types of businesses using online marketplaces, as well as how and why they are using these external trading platforms.

Sellers are drawn to online marketplaces for different reasons

The research, which you can read in full through our whitepaper The rise of UK’s digital entrepreneurs: harnessing the power of online marketplaces, found that there are many reasons driving businesses to use online marketplaces, covering motivation, focus and access to international markets.

For example, some sellers with a more established online presence are motivated to use marketplaces to sell a premium selection of their full range to test demand.

And those sellers with a solely online focus proactively use online marketplaces as it allows them to sell their goods while keeping physical costs down, like rental space.

The 6 different faces of marketplace sellers

The research also found that marketplace sellers broadly fall into six categories or ‘personalities’ based largely upon their scale and complexity and 63% of these sellers would be considered as small businesses.

At 38%, the largest group of online marketplace sellers can be defined as Traders. These businesses tend to be sole trader who have an eye for the latest product trends and crazes, which they buy in bulk and sell fast using multiple online marketplaces.

Creatives made up 25% of sellers and they tend to operate from their own home, have turned their hobby into a business and focus on a single marketplace.

Innovators at 14% and Growers at 12% are typically larger businesses compared to Traders and Creatives. Innovators focus on a niche idea or a smaller range, often invented by them, started out online, employ a small team with the same mind set, and look to increase awareness. Growers typically start offline, like a family business, but recognised marketplaces could help them reach new customers and reinvigorate their business.

8% of sellers are Pioneers with lots of experience using marketplaces, use these platforms selectively based upon product type. The smallest group at 3% were Leaders and these might be large omnichannel businesses but despite their size, marketplaces still represent an important channel, especially as they represent opportunities to sell internationally.

But for all the opportunities provided by online marketplaces, each of the different type of online sellers face challenges to make the most out of these external platforms.

Challenges differ depending on what personality the business falls into. For example, Creatives need to seek out advice on how to best use marketplaces, such as listing items, and require guidance on marketplace regulations and barcoding.

In comparison, Leaders require a bespoke product management system that sits across all sales channels to drive success and overcome challenges.

Take the online personality quiz

But for all these differences, our standards unite the different types of online marketplace sellers. Whether you’re a Trader, Innovator or Pioneer, using unique GS1 numbers to link vital information about the product, GS1 standards help sellers identify their products and assist marketplaces to better manage their catalogues.

Now that you have read about the different types of businesses using online marketplaces, including their motivations and focus, why not take our online personality quiz and let us know what type of marketplace seller you are on Twitter or LinkedIn #whatsellerareyou.


What kind of online seller are you?

The rise of UK’s digital entrepreneurs

The different types of online sellers