Top 30 marketplaces in Germany and Europe

Marketplaces offer great opportunities for sellers – be they manufacturers or brands, brick-and-mortar or online retailers, refurbishers, fulfillment service providers or other players. Marketplaces usually offer a large reach and the possibility to present the offer of the dealers to them. For sellers, among other factors, the question is whether the revenue to be generated on the marketplace can compensate for the costs of setup and operation.

While the operating costs are defined, among other things, by the fee model of the marketplace and by the operating costs, the setup costs include, among other things, the technical integration, any necessary expenses for content and listing of the assortments, and the provision or scaling of the operating capacities, e.g., for channel marketing or warehousing and logistics. In the case of sales in other European countries, there may be additional challenges based on language or legal differences, for example. How the European marketplaces help German sellers to solve these challenges will be examined in a separate deep dive.

As already stated at the beginning of the chapter, it is important for merchants to check whether the potential of the marketplace allows the investment in setup, integration and listing of products. The entry hurdles on most marketplaces are rather low. However, the requirements for the merchant, e.g. in terms of shipping or item content, can differ significantly between the various marketplaces. As part of the account creation process, most marketplaces usually require commercial sellers to have a company registered in the respective country. This is not a challenge for German sellers on a German online marketplace, but it can quickly become a hurdle for sales via European marketplaces abroad. For merchants who do not want to set up a foreign company directly, Amazon or eBay, for example, offer the option of cross-border trading via a national account.

All marketplaces offer or require integration of the processes between seller and platform. This starts with the setting of the assortments, continues with the order and payment processing as well as the shipping and tracking process and ends with customer communication and after-sales issues. Omnichannel and middleware providers help sellers to operate the interfaces of the marketplaces and support the processes of the retailers. The first step is to analyze which of the top 30 marketplaces are addressed by which of the providers.

Product information is a major challenge for retailers, especially smaller retailers. High-quality product information is also the basis for high product visibility. Currently, about a quarter of the marketplaces provide a central catalog and thus take over this task for online retailers. However, this requirement still exists for a large group of the top marketplaces, let alone the small ones.

In the top 30 marketplaces, there is a strong battle for product visibility and ultimately customer attention. In addition to organic discoverability, 93% of the top marketplaces offer sellers onsite marketing options. Most marketplaces offer a range of different onsite marketing campaigns. The most common of these are coupons, promoted listings, and marketplace-wide campaign packages.

The coupon option is the most common. To be able to participate in a coupon, the popularity of the products, the discount offered, the available inventory and the relationship with the account manager at the marketplace operator usually play an important role. Merchants thus have the opportunity to increase their conversion rate. Coupons are usually offered for certain products or above a certain purchase value in order to increase the value of the shopping cart. Coupons are often already displayed in the product search. In the further funnel, coupons can be displayed on the product page and in the checkout process.

Promoted Listings are an onsite marketing offer that almost all marketplaces offer their merchants. Here, the merchant can acquire the first ad in the product search. These placements are mapped on the individual marketplaces by processes and mechanisms, some of which are fundamentally different. These can be cost-per-click or cost-per-order models. In addition, the marketplaces differ in the level of consideration of the quality factor of the merchant’s offer. Relevant factors for the quality factor include the quality of the content, the number of sales, and product and merchant ratings.

Marketplace-wide campaigns can have quite different complexity and reach in the marketplace. Most marketplaces offer their customers a selection of products in connection with an exclusive price advantage. For this, merchants can advertise their products and must provide a certain inventory in conjunction with an agreed price. Other marketplace-wide campaigns can include banner ads and special placements on the marketplace website. Merchants are primarily motivated by the reach of the individual options and want to increase their awareness as well as the number of sales.

Fulfillment is now one of the most important services offered by marketplace operators. Marketplaces can leverage their economies of scale to reduce storage, packaging, delivery and returns costs, especially for smaller sellers, and shorten delivery times. Currently, fulfillment is available at 13 of the top 30 marketplaces and the trend continues to point in that direction. This service can be set up either internally, e.g. Fulfillment by Amazon, or through a partnership with a logistics partner, e.g. Fulfillment by eBay in a joint venture with Orange Connex.

This fulfillment offering opens up the marketplace business to a previously unreached group of merchants. Small merchants in particular often do not have the necessary resources to efficiently handle logistics internally. The marketplace thus covers the global supply chain and delivery for e-commerce merchants of all sizes. Merchants store their goods with the marketplace, which takes care of picking, shipping and returns management. Most marketplaces have various local warehouses to guarantee the fastest possible delivery times.

The charging model determines the revenue sources of the marketplace operator towards the sellers. Apart from that, the fee model is also an important means to influence the behavior of the merchant. For example, it is common to penalize sellers with persistently poor customer service by charging higher fees to guarantee a change in behavior or to exclude the merchant because its margin no longer covers the increased sales fees.

Most online marketplaces are oriented towards one or even a combination of the following three strategies: commission, subscription and listing fees. In fact, however, there are many more revenue models on the market. Each of them has its own advantages and disadvantages for merchants, as well as difficulties in implementation by the marketplace operator.

The common types of fees charged are monthly subscription fee and percentage commission, which are based on the transaction volume and are only settled upon sale. The monthly fee is usually 20-50€ and is intended as an incentive to actively sell. eBay and Allegro also offer different packages with different features and associated monthly costs. The more expensive packages often include benefits such as discount for commission or support from an account manager of the marketplace operator.

The commission at the conclusion of the sale allows minimal risks for the traders, since only after sales are achieved, costs are incurred for the sale through one of the marketplaces. The top 30 marketplaces have different ranges of commissions, which are considered the main source of revenue. The emerging marketplaces such as Galeria (3-10%) and Check24 in (5-10%) DE charge comparatively much lower commission than the established and much larger marketplaces Amazon (7%-20%) and CDiscount (5%-20%).

Commission on the top 30 marketplaces varies by category and reflects the margin structures of the individual segments. Commission for the Fashion and Health & Beauty categories is typically higher than the Electronics and Home & Garden categories. Less frequently seen are fixed fees per item sold (at eBay, bol.com), payment fees (at eBay) or one-time entry fees (at Wish).

The above chapters have shown how marketplaces can differentiate themselves from buyers and sellers throughout different themes. However, the most important task of a marketplace continues to be the provision of the broadest possible assortment – if necessary within a specific vertical or a specific orientation. The trend towards more and more marketplaces aggregating the usual market assortments inevitably leads to marketplaces having to differentiate themselves from one another. A demarcation, which must take place primarily over the offer. It is therefore worth taking another look at special developments and trends for product ranges. Four approaches that have become visible across the landscape of marketplaces will be presented as examples:

The above chapters have shown how marketplaces can differentiate themselves from buyers and sellers throughout different themes. However, the most important task of a marketplace continues to be the provision of the broadest possible assortment – if necessary within a specific vertical or a specific orientation. The trend towards more and more marketplaces aggregating the usual market assortments inevitably leads to marketplaces having to differentiate themselves from one another. A demarcation, which must take place primarily over the offer. It is therefore worth taking another look at special developments and trends for product ranges. Four approaches that have become visible across the landscape of marketplaces will be presented as examples:

As part of the so-called creator economy, many marketplaces cooperate with influencers, who on the one hand bring their own reach and target groups. The goal of the marketplaces is to cooperate as exclusively as possible with influencers, to develop products or brands and to sell them via their own marketplaces in order to reach the relevant target groups and to distinguish themselves from other marketplaces. This strategy applies to both retail companies and marketplaces. However, influencers do not always have to be in the foreground, as the marketplace Etsy, which was not considered in our study, proves, where thousands of small and private “creators” successfully sell their assortments. Aboutyou is actively involved in the “Creator Economy” and is building new brands together with influencers with a wide reach, which are sold exclusively on Aboutyou.

Resales: The circular economy is fundamentally about sustainability through the reuse of things and the promotion of sustainability. While eBay, for example, was once created as a platform for resale by private and commercial sellers, other marketplaces have only taken up the topic in recent years. According to our analysis, 12 of the marketplaces studied currently offer opportunities for reselling assortments, mostly as part of “refurbished” programs and more or less transparent quality control.

On allegro.pl several filters for refurbished products are integrated on the homepage, Refurbished by Manufacturer and by Reseller. This indicates the careful differentiation of these products to significantly help customers sort and search. In addition, the customer will find a detailed description of the product’s condition on the product page. Often, the customer can still get a month-long warranty from the dealer. This shows that ensuring product quality and warranty are the main issues that the marketplace operator should address.

For the internationally active marketplaces, it is advantageous to show the range of their merchants on as many country platforms as possible and thus compensate for any gaps in the product range in smaller countries or offer customers attractive prices in countries with less competition. At the same time, sellers can tap into new markets without having to set up a complete infrastructure for each country. While these advantages could be realized on the one hand by internationally active marketplaces, e.g. Amazon or eBay, some national marketplaces try to achieve these effects through cooperation, e.g. International Marketplace Network. For marketplaces such as Alibaba or Wish, cross-border trade is even the basis of the business model.

With Amazon, merchants have the ability to display their products on all European platforms with one account. The central catalog facilitates the setting of listings. In addition, the Amazon Fulfillment Network takes care of storage, delivery and returns in the target market. Similarly, the Swiss market operator offers German retailers logistics services geared to international trade, which meet legal and tax requirements. In the logistics solution, an EU HUB warehouse in Germany is offered by Digitec and Digitec’s central warehouse in Switzerland is provided.

In addition to the concept approaches to facilitate selling on their own marketplace in other markets, some major players in different European regions are joining forces to form an alliance. The International Marketplace Network (IMN) currently consists of ePrice in Italy, CDiscount in France, Kaufland.de in Germany and eMag in Romania. After activating an IMN account, any merchant from one of the marketplaces can display their offers on the partner marketplaces. No new technical connection is required and listings are automatically translated in the backend. With this approach, it remains to be seen whether corresponding logistics services will be offered and how many more partners the network can connect.

Despite a growing share of online retail in total sales, brick-and-mortar retail is still significantly larger and thus also represents the greatest potential for scaling. While many of the large retail organizations are already active online, many of the small owner-operated retailers are still shying away from taking the step in this direction. So this is also an opportunity for marketplaces – whether as an inventory reserve for vertical marketplaces (and sellers) like Zalando, or to ensure a certain diversity of supply for platforms like eBay. The Corona crisis has also led to a new awareness of brick-and-mortar retail among customers, who are certainly embracing some of the following initiatives.

eBay Deine Stadt (eBay Your City) is an initiative by eBay Germany and the German Retail Association to strengthen stationary retail. eBay offers cities and regions the opportunity to implement a low-cost and sustainable local online marketplace and thus provide local customers with the most comprehensive overview possible of local retail assortments. For merchants, there is the opportunity to be visible on both the eBay marketplace and a local online marketplace at the same time. In addition, eBay is committed to helping merchants get off to a successful start with a comprehensive program. After only one year of operation, 30 cities and regions are already participating.

On the Otto.de marketplace, local availabilities are displayed for some retailers. The data originates from the “Digital Mall” project of sister company ECE, which now records the inventory of over 100 retail partners and displays it online for more than 65 malls. This information is also displayed on Otto.de and offers customers the opportunity to try on and purchase the goods they are looking for in the stores of the participating partners. Transactional embedding is not yet apparent, but is certainly conceivable in a next step.

The Zalando Connected Retail initiative enables local fashion and shoe retailers to connect the inventories in their brick-and-mortar stores to the Zalando platform via software. In doing so, Zalando secures an extensive virtual inventory, which leads to higher availability for seasonal items without Zalando having to take a higher risk with regard to its own inventory. This can still be to the advantage of brick-and-mortar retailers and an opportunity for additional sales. Ultimately, however, this approach is not a true marketplace model.