Today, marketplaces are firmly entrenched in the arsenal of Russian retailers. For some brands, they have become a key driver of turnover; for others, an inevitable distribution channel; and for yet others, a battlefield of intense competition. However, growth in sales on these platforms does not always translate to profit growth or long-term brand strengthening.
The Main Challenge: Profit Margins Under Pressure
The systemic problem with marketplaces is margin compression. While in a brand's own channels, for example a fashion brand, profitability can reach 70–80%, on marketplaces this figure often drops to 30% or lower. The reasons are complex:
As a result, scaling sales on marketplaces is not equivalent to growing profit. It is crucial to approach volume consciously, avoiding a race for growth that can deplete resources and undermine financial stability. A far more effective approach is to focus on the other opportunities that marketplaces offer.
The Key Opportunity: Using Traffic to Strengthen the Brand
Marketplaces possess a unique advantage – a ready-made, massive stream of traffic that many brands could not attract to their own channels without colossal investment. Moreover, customers here are already in a high state of purchase readiness.
However, making a sale should not be the final goal. If a brand limits itself to just that, it:
The strategically sound approach is to view the marketplace as an entry point, not an end goal. The task is to introduce the customer to the brand and engage them in the brand's own channels for further dialogue. A simple and effective tool is a QR code on a tag or insert, leading, for example, to a loyalty program. This action should be reinforced with a valuable offer:
Some brands openly tell customers: "We are on marketplaces to make it easier for you to get to know us. In our own channels, we offer more service, assortment, and attention." While platforms do not welcome such scenarios, persistence in building direct communication gives brands a long-term advantage.
Omnichannel: Not a Goal in Itself, but a Measured Decision
Despite the popularity of the omnichannel topic, the decision to enter a marketplace requires deep analysis. It should not be done without a clear plan and strategy. It is especially dangerous to redirect traffic from your own channels to a product page on a marketplace. Once there, the customer immediately sees dozens of alternatives, and competition becomes extremely visible. The brand is forced to fight not only for product choice but also for the lowest price, which directly threatens profitability—bringing us back to the original problem.
Thus, success on marketplaces depends not on sales volume at any cost, but on the ability to use their traffic to strengthen direct customer relationships and preserve the brand's economic health.
Source
The Main Challenge: Profit Margins Under Pressure
The systemic problem with marketplaces is margin compression. While in a brand's own channels, for example a fashion brand, profitability can reach 70–80%, on marketplaces this figure often drops to 30% or lower. The reasons are complex:
- High platform commissions,
- Significant logistics and storage costs,
- The necessity to invest in on-platform marketing amidst high competition,
- Constant price pressure from other sellers.
As a result, scaling sales on marketplaces is not equivalent to growing profit. It is crucial to approach volume consciously, avoiding a race for growth that can deplete resources and undermine financial stability. A far more effective approach is to focus on the other opportunities that marketplaces offer.
The Key Opportunity: Using Traffic to Strengthen the Brand
Marketplaces possess a unique advantage – a ready-made, massive stream of traffic that many brands could not attract to their own channels without colossal investment. Moreover, customers here are already in a high state of purchase readiness.
However, making a sale should not be the final goal. If a brand limits itself to just that, it:
- Fails to build customer loyalty,
- Loses the opportunity to stimulate repeat purchases,
- Misses out on valuable customer data for personalization and retention.
The strategically sound approach is to view the marketplace as an entry point, not an end goal. The task is to introduce the customer to the brand and engage them in the brand's own channels for further dialogue. A simple and effective tool is a QR code on a tag or insert, leading, for example, to a loyalty program. This action should be reinforced with a valuable offer:
- A product usage guide,
- Extended warranty or service,
- Exclusive offers not available on the marketplace,
- A discount on the next purchase for a specific action.
Some brands openly tell customers: "We are on marketplaces to make it easier for you to get to know us. In our own channels, we offer more service, assortment, and attention." While platforms do not welcome such scenarios, persistence in building direct communication gives brands a long-term advantage.
Omnichannel: Not a Goal in Itself, but a Measured Decision
Despite the popularity of the omnichannel topic, the decision to enter a marketplace requires deep analysis. It should not be done without a clear plan and strategy. It is especially dangerous to redirect traffic from your own channels to a product page on a marketplace. Once there, the customer immediately sees dozens of alternatives, and competition becomes extremely visible. The brand is forced to fight not only for product choice but also for the lowest price, which directly threatens profitability—bringing us back to the original problem.
Thus, success on marketplaces depends not on sales volume at any cost, but on the ability to use their traffic to strengthen direct customer relationships and preserve the brand's economic health.
Source