May 26, 2022

New Research: Online Marketplaces Help Level the Playing Field for Small Sellers

By Data Catalyst Institute

Access to Millions of Customers and Integrated Tools Help Small Sellers Compete with Large Retailers

Washington, DC (May 26, 2022): Small business sellers are finding incredible value in selling their products via online marketplaces like Amazon, eBay, Walmart, Etsy, and Target, plus many smaller ones, according to a new study commissioned by the Connected Commerce Council (3C) and carried out by the Data Catalyst Institute (DCI). In a survey of 1,000 small and medium-sized sellers (SMB Sellers) nationwide, nearly two-thirds (64%) of respondents that use online marketplaces reported that the marketplaces help their business compete with larger retailers, and half (50%) report significant savings ($20,000 or more annually) from using marketplace-provided integrated tools.

The survey found a majority of SMB Sellers use more than one online sales method. For example:

  • 58% of SMB Sellers that sell on online marketplaces also sell through a business owned web store (e.g., hosted by Shopify)
  • 75% of SMB Sellers that use an online marketplace use more than one,  with the most popular being Amazon (83%), eBay (59%), Walmart Marketplace (36%), Etsy (30%), and Target Plus (20%).

Online marketplaces help small businesses compete with larger retailers by: 

  • making it easier to bring new products to market (64%)
  • increasing access to new markets (59%)
  • lowering the barriers to connecting with new customers (46%) 

In addition to saving money, online marketplaces’ integrated tools help small sellers with: 

  • shipping (78%)
  • payments (70%)
  • order fulfillment (69%)
  • storing inventory (51%), and 
  • managing returns (50%).

“Online marketplaces like Amazon break down barriers and create opportunities for small sellers by helping us sidestep middlemen and retail ‘buyers’ who control access to store shelves,” said Joel Roodman, Managing Partner at Logic Products and a 3C Advisory Board Member. “Online marketplaces and their integrated tools empower small rural companies like ours to find customers, sell products, and deliver them quickly, easily and affordably all over the world.”

Congress is rushing misguided legislation, the American Innovation and Choice Online Act (S. 2992), that would jeopardize the ability of online marketplaces that are above a certain size to have third-party sellers in their stores.

“Legislators’ eyes get big when they target large digital platforms, but they are missing how online marketplaces like Amazon help small sellers compete with the biggest brands in retail,” added Rob Retzlaff, 3C Executive Director. “Small businesses don’t need Congress to target their digital partners;  they need Congress to tackle broad economic issues like inflation, gas prices, and ongoing supply chain issues.”

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