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The whole of e-commerce is migrating towards marketplace solutions. If you look at the top-ranking e-commerce sites in France today, you will see that almost all of them are marketplaces. At the end of 2019, the Fevad, which publishes its top 10 based on the number of unique visitors per month, ranked Amazon, Cdiscount, Booking, Fnac, Veepee and Vinted. This trend can be explained by the quality of the customer experience. The very nature of the marketplace, as a platform to make connections, addresses consumers’ new demands for easy access to products, delivery options, insurance, etc. Honesty is crucial. e-traders must understand that there is no one-fits-all solution for every use case.

There is no off-the-shelf marketplace that is suited to their particular case. All the solutions quickly reveal their limits of a framework with no way out.

But we cannot see any reason why marketplaces must remain black boxes. On the contrary, at IZBERG we have adopted a best-of-breed approach. We nurture the notion of a community, by opening up our data and our knowledge. The goal is to federate an ecosystem of integrators or partners using our toolbox. In this way, operators can build their tools themselves, using all the possible software building blocks to develop a made-to-measure solution.

Our transactional project management platform is agnostic. IZBERGS’s customers build applications ranging from retail sites to platforms for organic waste management, e-procurement and booking skiing lessons. All BtoC and BtoB professionals are now concerned. Our customers have fundamentally different needs, and they can add as many components as necessary to our core. We have developed a non-restrictive toolbox with more than 500 APIs (basket creation, order processing, catalogue retrievals, etc.)

Our prospects also have differing requirements in the pre-sales phase and a need for functionality specific to their particular use cases. For example, can the solution be plugged into ERPs? Can BtoB invoicing be managed in this or that country? And so on. A standard model cannot tick all the boxes, which is the reason why the teams at IZBERG have opted for flexibility. IZBERG enables its users to do whatever they want by providing them with an extensible product and teams committed to their success.

But we did not adapt this model straight away. IZBERG is about to celebrate its eighth birthday, and we take care to continually call ourselves into question. By listening to our customers, we have been able to see what unites them and what distinguishes them. Every event, every meeting, from surveys and opinion polls, to demonstrations and new functionality tests, provides us with fresh food for thought. We tell our customers how they can develop their own complete and personalised solution on the basis of our API First core. We supply the base, then we help them to model and expand their solution however they like.

In this respect, we have strong product values that are embodied by our solution – modularity, openness, extensibility – and we try our hardest to be developer-friendly by working hand-in-hand with the doers, and in particular with the developers of our ecosystem of customers and partners. We provide them with a wealth of documentation, tools and top-quality support for their implementation. Finally, all the data managed in the marketplace is accessible to the customer.

Click here for more information.

Benoît Guyot – Product Owner of the IZBERG solution

If we were to cite just one marketplace pioneer, it might be ManoMano. Although another ten companies instantly come to mind, including GiFi in France and Dott in Portugal (see below), ManoMano’s trajectory is a reminder of how the marketplace model opens up almost unlimited growth opportunities. Founded in 2012, ManoMano saw a gap in the market and took the plunge: at the time, although the DIY and gardening sector in France was worth some €30 billion, just 1% of sales were online*.

Its founders chose to outsource inventory management and logistical challenges and consequently offer an infinitely wider range than in stores, with more than four million products available to date.

Marketplaces were initially C2C, enabling individuals to buy and sell amongst themselves. But professionals saw the potential benefits and chose to adopt the model for their businesses. 2018 saw a significant milestone being reached: over 50% of online purchases were made on marketplaces**.  The 2020 Fevad ranking of e-commerce sites (in terms of customer numbers) also featured marketplaces like Veepee***.

So, if you’re thinking of opening a B2C e-commerce site, we’re serious when we ask you: why not open a marketplace? Read on for our advice on developing your business model.

1. What do we mean by the term marketplace? 

Let’s start with a common-sense definition. A marketplace is a virtual shopping mall; its operator provides a transparent and secure framework to inspire consumer confidence. Whether they are manufacturers or distributors, sellers benefit from a reliable platform (which provides a good user experience) and an extensive pool of customers. In return, the marketplace receives a commission from all sellers’ sales.

B2C marketplaces sell products or services. They are both horizontal and vertical (fashion, sports, wine, food, etc.). In reality, any company can create its own niche marketplace! The idea is for the company to attract and therefore control the competition by hosting the marketplace on its own retail site.

A marketplace exists because of synergies between five different stakeholders: the operator (yourself), the sellers, the buyers, the software publisher and the payment service provider, just as with B2B marketplaces [+ link to article 1].

2. Extreme flexibility

The diversity of revenue models and the value of the operator’s commission (which should be established and negotiated based on your objectives) make the marketplace a particularly flexible model that can be tailored to your needs.

3. Behind-the-scenes savings

You’ll save time in every area and you won’t need to worry about product sourcing, logistics and inventory management. That’s the beauty of the marketplace model: you’re not responsible for these aspects.

At the same time, the risk of failure is lower because a marketplace is a virtual store: investment costs are therefore lower.

4. Exponential growth

On a marketplace, volumes can always be increased: more sellers, more products, more customers!

Another advantage: a marketplace is an opportunity to test new products. Some operators don’t even open a marketplace with their own product range: instead, they choose to sell new products launched by other companies. The data collected provides a good understanding of market trends; the marketplace model is therefore an excellent opportunity for developing in-depth and strategic analysis.

Conversely, if you open an e-commerce site, you are structurally limited in terms of operations and finances.

5. Controlled risks

As a trusted third party, the marketplace develops its image among consumers. Yet it’s the sellers that provide the service (product quality, delivery times) and ensure quality of service. Consequently, the marketplace administrator must establish a robust and realistic vendor management policy.

It can be difficult to find a balance between sellers and buyers: to attract sellers, you need buyers and vice versa. One of the major challenges of a marketplace lies in successfully growing these two separate pools at the same time.

In conclusion, a marketplace boasts two key advantages: extremely low investment costs and hyper-growth potential. For retailers, it provides a wider scope for exploration and presents excellent opportunities for them to test, learn more and adapt their products and services.

Learn more about two iconic marketplaces enjoying B2C success

1. GiFi has always been a brick-and-mortar group and has 550 stores in France. This network remains its strength. However, listening to its customers has enabled it to respond to a new demand: a desire to access other types of products that are related to items already sold in store. GiFi doesn’t develop these product ranges and doesn’t want to develop them for profitability reasons. The marketplace is an ideal way to expand the brand’s range of products and services with the help of other suppliers.

The first impact has been the acquisition of new customers. The marketplace makes it possible to reach internet users who are looking for a product or using social media and ensure that a few days, weeks, months or even years later, they step inside a GiFi store, despite not being aware of the brand before. The second advantage is that GiFi has been able to add a huge number of partner products to certain sub-departments, while always prioritizing its own products on the site. This enhances its credibility and enables it to meet customers’ needs systematically, without cannibalizing its native offering. The group managed to ensure that its marketplace activities remained stable during lockdown. This ordeal helped the company develop closer relationships with its partners.

2. Dott. Welcome to Portugal, where two national companies have launched a marketplace and taken Amazon by storm. In Portugal, the online retail giant only offered its site in Spanish. Sonae, the leading Portuguese distributor with 40,000 employees, and CTT, the Portuguese Post Office, launched a very ambitious marketplace in the space of six months, bringing together 500 retailers selling some 500,000 products.

To create “the country’s leading online shopping mall”, Sonae and CTT chose retailers which would appeal to Portuguese clients, particularly those with a focus on local production. They also focused on providing a wide range of services: delivery in less than 48 hours, Click & Collect, free returns, payment via a third party.

How can you launch your marketplace? What skills are necessary? You’ll find the answers to all your questions on our blog and you can develop your thoughts by completing the exercise below.

=> Clarify your strategy

This list of questions will help you develop your ideas before embarking on any project.

• What are your customer segments?
• What is your value proposition (products and services) for each of these segments? 
• What type of customer relationship do you want to establish with them?
• Think about distribution channels: for example, you may decide to sell some of your products on the marketplace and others in physical stores.
• What revenue streams are generated for each customer segment? What added value are customers willing to pay for? Under what conditions (time frames, management costs, etc.)? What are their payment methods? How do you set your prices?
• What key activities are essential to your value proposition, both internally and externally?
• What are your key resources: tangible, intangible and human assets?
• Who are your key partners? (essential outsourced assets)
• Lastly, think about your cost structure: fixed and variable costs, customer acquisition cost versus ROI, repeatability & scalability of the new model, etc.

Visit this dedicated page to find out more.

(*) Capital, April 2017
(**) https://www.lsa-conso.fr/plus-de-la-moitie-de-l-e-commerce-mondial-a-bascule-sur-les-marketplaces-internet-retailer,326351
(***) https://www.fevad.com/classement-fevad-2020-des-sites-e-commerce-en-nombre-de-clients/

Does your international marketplace comply with new regulations in 2021?

As you probably know, a marketplace is an intermediary platform which brings together online buyers and sellers. But a digital marketplace means international expansion. As such, an international legal framework applies. 2021 promises to be a great year. In this article, we’d like to present the very latest regulations for your international marketplace in 2021. Because if you’re well informed, you’ll be well prepared.

New EU rules on VAT

As our partner Lemonway explains, marketplaces will be subject to new VAT rules from July 1, 2021. These new rules include the implementation of the EU’s new VAT package. 

As it stands, every marketplace seller with customers in the EU has to have separate VAT records, invoices and payments for each relevant country. Thanks to the new VAT regime which comes into force on July 1, 2021, international marketplaces will be able to benefit from the OSS VAT scheme. The aim is to reduce administrative paperwork for suppliers of services and products who will be able to file a single VAT return in an EU member state. This will cover all transactions carried out within the European Union which will obviously save time and effort. This system is optional, meaning that sellers can choose to continue with the old system. 

In addition, this new measure for 2021 will see VAT being applied to all products imported from outside the EU, whatever their value (previously, items under €22 were exempt). 

This applies to sellers on every online marketplace and to couriers who work in the EU and deliver to European customers. End customers will be most affected as they will bear the cost of this new measure. Failure to comply with the new requirements can lead to a fine of 5% of undeclared amounts.  

International marketplaces and the 3-D Secure 2.0 system

From January 2021, all e-commerce transactions over €1,000 (previously €2,000) have been subject to the 3-D Secure 2.0 system. The process involves requesting authorization from the bank to approve a transaction, with the aim of minimizing the risk of online banking fraud. If the transaction is not authenticated, this authorization will be refused. The rule has been gradually extended in 2021, applying to transactions over €500 in February 2021 and covering all transactions under €500 since April 2021. 

The Banque de France and the OSMP (Observatoire de la Sécurité des Moyens de Paiement), which are responsible for this new measure, adapted a gradual implementation of this measure in the wake of the Covid-19 pandemic. It must be said that putting a new process like this in place takes time and has an impact on many different parties. 

The first to be affected are customers and sellers. Customers must have access to the bank’s mobile application and set up their biometric authentication system. This changes the purchasing process: a text message no longer suffices, something which makes the process less fluid for customers. The players in the payment chain must therefore work together to provide a personalized customer experience. Our partner Danelys has written an article on best practices.

The entry into force of the Digital Services Act (DSA) and the Digital Market Act (DMA)

The Digital Services Act (DSA) is the result of a review of the liability of hosting providers and technical intermediaries. The European Commission has identified 4 intermediary profiles:

• ISPs or Internet Service Providers
• hosts which provide users with tools to inform them of illegal content
• traditional online platforms
• very large platforms which represent more than 10% of the European population, or more than 45 million users. All platforms should provide a system for settling disputes internally, with the understanding that the larger the platform, the more extensive the liability. Very large platforms must also annually assess the risks to its users’ rights and security and inform the relevant authorities.

The Digital Markets Act (DMA) is a regulation which applies to all EU member states and aims to regulate marketplaces, with a centralized system within the EU. The European Commission will monitor and ensure compliance with the help of a Digital Markets advisory committee which will provide advice. 
As you can see, it’s vital to prepare for the new regulations in force for your marketplace. You need to do what you can to lay the groundwork. Please contact us to review and choose the best marketplace solution to ensure your role as a leading player, now and in the future.