Should you use marketplaces to boost early Shopify store sales?

If you have a Shopify store should you use marketplaces to make early sales and get your first customers?

When your brand is new or not well-known yet, marketplaces like Amazon and Etsy are cost-effective channels to get those early sales, which may also help drive sales on your Shopify website.

But it may not work well for everyone. Here's how to know if it might work for you (and why).

What kind of Shopify stores do marketplaces work best for?

Marketplaces won't work well for all Shopify merchants because it depends on the type of products you sell. Here's who it works great for and who it doesn't:

• Great for: Low-priced product categories with a variety of options.
• Not so great for: High-priced products or categories with limited options.

This strategy works by offering limited options on the marketplace and encouraging customers to visit your website for more options with great search and competitive pricing.

The tradeoff is that selling through marketplaces limits the data you get and limits the customer relationship, but in exchange for that you get wider exposure to a broader customer base to build your brand.

This is especially important for new Shopify stores that are just getting stared.

How well does it work? 🤔

Customer acquisition costs on marketplaces are generally lower (~24%) compared to on your own website, which is much higher than your own channels, especially for new brands that have relatively higher customer acquisition costs.

On average, every 71 sales on the marketplace will create a new customer on your brand-owned site, especially in low-priced categories with a large selection.

What should you do next?

If you're a new brand or have a small market share, try selling some products on a marketplace. Encourage marketplace customers to repurchase directly from you by offering exclusive products and better prices on your site.

Want to learn more? 🤓

If you want to learn more about this topic, you can dig into the nerdy details in the original marketing study here.

Quote of the week 💬

Getting your first customers is like dating. It's awkward at first, but it gets better as long as you don't ghost them.