Marketplaces have evolved into a dynamic ecosystem where sellers face challenges of saturation, price competition, and increasingly stringent platform regulations. This article delves into the workings of the market, key issues with practical examples, a step-by-step adaptation plan, and the prospects for sellers in 2025. By following a structured approach, you can minimize risks and enhance your chances of success.
What are Marketplaces and How Do They Work
Marketplaces function as digital markets with a vast assortment: identical products come with numerous offers featuring varying prices, promotions, and displays. The process is straightforward: a seller registers, uploads product listings, connects to the platform's logistics, and promotes items through advertising. Sellers gain access to millions of buyers both domestically and internationally, while clients enjoy options tailored to their budgets and preferences. However, the surge in participants has resulted in saturation: in popular categories, thousands of similar items trigger a price war, where undercutting undermines profitability.
Advantages and Risks for Sellers
The main advantage is scalability without the need for dedicated infrastructure: platforms provide traffic, analytics, and delivery. However, risks outweigh the benefits: price undercutting can reduce prices by 2-3 times, commissions may reach 20-30%, and frequent changes in regulations (logistics, storage, VAT) lead to a "cleaning" of weaker players. Forecasts indicate that 70-80% of sellers may exit the market, leaving behind manufacturers with predictable assortments and low costs. Government factors—tax regimes, traceability of supplies—intensify pressure on "gray" schemes.
Practical Case: Faux Fur Coats
Let's consider the faux fur coat niche—offering good margins with less competition (16,994 listings compared to 356,283 dresses). The wholesale price of a quality coat is around 5000 RUB, with seasonal retail prices ranging from 13,000 to 20,000 RUB. The product listing is well-promoted and sales are ongoing, but it fails to rank in the top for key queries: competitors are undercutting prices down to 6,000 RUB (with a cost of around 5,000 RUB). Honest sellers are forced to lower their prices, sacrificing profitability. This is a classic scenario: a "neighbor" without production investments is pushing out the "manufacturer."
Analogy of Price Competition in the Market
Consider a market model: Seller A launches a product at 500 RUB/unit, ensuring a 40% margin through an optimized supply chain. Seller B enters with a similar product at 450 RUB, sacrificing margin for volume. Seller A loses 30% of orders and adjusts the price to 460 RUB. A downward cycle begins: margins compress and quality suffers. Now you—having invested in production (analogous to tending an apple tree: planting, agronomy, certification)—offer your product at 700 RUB. How do you justify the premium value to hundreds of buyers through the platform’s algorithms? Undercutting destroys market efficiency, where competition should stimulate innovation and value appreciation.
Cost Structure and the Role of Manufacturers
The wholesale price includes production costs, supplier margins, plus seller expenses: packaging, photography, commissions, logistics, storage, advertising, taxes, and profit. The final price often appears unattractive to buyers. Manufacturers bypass middlemen: this leads to lower prices, reduced scarcity, and stable assortments. Platforms are tightening conditions to eliminate "resellers." Interestingly, the team at MarketHub.pro has thoroughly investigated these challenges in practice: their service automates accounting and analysis, helping to identify "black holes" in expenses—from logistics to advertising. More details can be found on their Telegram channel, where they discuss real cases of direct sourcing from factories.
Step-by-Step Adaptation Plan for Sellers
Step 1. Assess readiness: analyze metrics (buyout, return on advertising investment, price dynamics), and the presence of a unique selling proposition.
Step 2. Choose your niche/platform: focus on low-competition categories (like coats), and study successful cases.
Step 3. Optimize costs: review tax structures, abandon "gray" schemes, negotiate direct supplies from factories.
Step 4. Continuous analysis: monitor buyout, logistics, advertising, and competitor prices—all of which frequently change.
Step 5. Manage inventory: eliminate slow-moving items, test new products in small batches, and scale popular items. Actively promote initial sales to generate momentum.
Considerations for Niche Sellers (Using the Example of OPEN OIL MARKET)
In B2B niches like fuel, competition may be lower, but certifications, logistics, and direct supplies are crucial. Demonstrate metrics: turnover, margin, customer lifetime value, acquisition cost. A roadmap of testing followed by scaling enhances credibility. The average transaction size is high; focus on retention.
Common Mistakes and How to Avoid Them
Mistake 1. Ignoring price undercutting: failing to emphasize value (quality, service) results in getting lost in the race.
Mistake 2. "Gray" schemes: as the market cleans up, blocking is inevitable.
Mistake 3. Manual accounting: without analytics (every pallet is a "trap"), you lose control. Be prepared, communicate with the platform, and test.
Alternatives and Combinations
Own website + SEO, B2B platforms, direct contracts. Grants (Industry Development Fund). Combine: use marketplaces for testing and independent channels for scaling.
Market Prospects in 2025
The market will consolidate: leaders will leverage analytics, compliance with regulations, and AI-based evaluations of product listings. Blockchain for tracking supplies will revolutionize supply chains. Success will hinge on data, adaptability, and seller communities. Those who account for every copeck and adapt timely will survive.
