Trading on marketplaces is always a risk. You are doing business on an external marketplace and have to play by its rules, you have to survive in a highly competitive environment.

However, any risks can be avoided if you know where to "lay the straw" and how to do it.

Let's take a closer look at each risk on marketplaces and show you how to avoid it with proper preparation and certain tools.

    Here are the 6 main risks:

Misjudge the choice of product and niche and get 0 sales

Suffer financial losses due to selling to yourself at a disadvantage

Not withstand high competition

Fail to prepare for high demand

 

1. Misjudge the choice of niche and get 0 sales

One of the biggest risks on marketplaces is to choose the wrong niche for selling.

Various negative scenarios are possible here, so you should definitely evaluate the prospects of a niche on a number of parameters before entering it:

There is a monopolist. It is necessary to look at the distribution of market shares between sellers. It can happen that the product is actively selling, but there is a monopolist in the niche, which takes 90% of the market, and the rest are satisfied with the rest.

Seasonal demand. There is a demand for the product, but it is seasonal. You have entered the niche when the demand has already started to fall, and then the goods will have to be sold at a reduced price (and it is good if you have time to sell everything). Remember that the marketplace market is constantly changing, and it's important to keep track of demand and trends.

Dumping. There is dumping in the niche, competitors are willing to lower prices and trade at a disadvantage, forcing other players to do so. Until others reduce the price, those who have the lowest cost will sell.

Weak organic sales potential. This means that without paid advertising and promotion, you won't be able to attract many buyers.

Small market. You should not expect big sales from it.

Growing competition. This is where you need to look. If it has just started to grow, it means that the niche is in demand, and you can manage to get there and take a place in the top 10. If it has been going on for a long time, you are probably too late, and it will not be easy to break through the high competition.

Interruptions with wholesalers. Some sellers can't find merchandise to purchase in bulk. You may find it difficult to do so as well.

Solution: To minimize the risks, we recommend you to use TakeaBot's top products database. In it, you can immediately get information about the rating, number of reviews, price and history of its changes

 

2. Suffer financial losses and trade at a disadvantage to yourself

Another global risk on any marketplace is to launch sales, expecting high demand, but suffer financial losses. And your goods may be actively sold. And at first it will seem to you that everything is fine and things are going well. But later, when you calculate how much you invested, and how much net profit received - it turns out that you did not even come to zero.

This can happen, for example, if the average check is small, and the cost of goods is high. At the same time, even unprofitable goods require costs for promotion. As a result, you invest a lot of resources and money, but you find yourself at a disadvantage.

Solution: TakeaBot analytics service is very attentive to the issue of numbers. We have very detailed analytics that take into account both your profits and losses

 

Fail to survive high competition and "finish the leftovers" after other sellers

Breaking through high competition and increasing your sales volumes is a difficult task. It will require both time and money. To avoid financial losses, it is important to break through to the top of the output at any cost: constantly take the best price in the buybox, order paid advertising within the marketplace. To do this, you need to pay a lot of attention to analyzing competitors - to see how they do, what they sell, at what price, etc.

Solution: avoid highly competitive niches and intelligently build off competitors

The best thing to do is just to be more careful in niche selection (we told you how to do it in point 2) and choose niches with low competition. But if this is not possible, learn how to competitively defend yourself from other sellers, for example, with the help of TakeaBot's autopricer

 

3. Fail to prepare for high demand and end up without your most marginal product

It is important to study the trends of popular sites and calculate how many orders the high season can bring to your business. For example, before the New Year holidays, the warehouses of marketplaces and sellers quickly become empty. If you didn't prepare in advance and didn't purchase the right amount of goods for which demand has increased dramatically, you risk losing a significant part of your profits.

 

4. Fail to prepare for high demand and end up without your most marginal product

It is important to study the trends of popular sites and calculate how many orders the high season can bring to your business. For example, before the New Year holidays, the warehouses of marketplaces and sellers quickly become empty. If you didn't prepare in advance and didn't purchase the right amount of goods for which demand has increased dramatically, you risk losing a significant part of your profits.

Solution: pay attention to analyzing the sale of goods. For example, in TakeaBot's personal cabinet, for each product there is a graph showing on which day of the week the product sells best