7 Challenges Online Marketplace Sellers Face and How to Overcome Them

Online Marketplace

This is a guest post by Jake Rheude. Jake is the Director of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.

Small challenges crop up every single day for those running an ecommerce business.

To make matters worse, there are larger, looming threats that you’ll need to counteract immediately if you want your business to survive.

These existential threats can come from products, customers, software, and even your overall approach to sales. Luckily, these challenges can be addressed properly if you’ve got a solid plan.

In this Process Street guest post, you’ll be looking at seven of these aforementioned challenges and my tips for solving them. Remember: Every investment in solving a problem has the potential to generate big ROI by keeping existing customers around and making it easier to attract new ones.

Make your way through the following sections to get clued up:

Let’s jump straight in.

The definition of ‘online seller’

An online seller is somebody who uses digital means to sell their products, goods, or services to buyers locally or internationally. Online seller usually use an online marketplace to help reach wider audiences, and even fulfillment companies so goods can reach buyers quickly.

If you’re unsure whether you yourself are an online seller or not, think of it this way: If you’re actively selling on sites like eBay, Etsy, Depop, Amazon, or Rakuten – either as your main source of income or as a side-hustle – you’re an online seller.

The 7 biggest challenges for sellers on the online marketplace

Although the challenges, problems, and issues online sellers face can differ due to what is being sold, there are several challenges that all sellers will need to address.

These include:

  • Data security
  • Customer loyalty
  • Unexpected price increases
  • Economic uncertainty
  • Stockouts and inventory overload
  • SEO mastery
  • Returns, refunds, and fulfillment

Get out the antacids because I’m starting with the big stuff – data security.

Challenges online marketplace sellers face #1: Data security

Online marketplace data security

Technical issues can harm your store, marketplace, and reputation all at once. Small businesses and sellers need to ensure they’ve got the right technology, latest versions, and that it’s all integrated to get the protections customers expect.

Unfortunately, people are working hard every day to make sure what you have isn’t good enough. Norton says that over 4 billion records were compromised in 2019. These records have come from banks, governments, apps, and even a Capital One and Amazon Web Services hack that hit 106 million people.

“Mega-breaches grab headlines, but hundreds of less familiar data hacks also could increase your risk of identity theft.

Data breaches have run at a record pace in 2019. Consider these statistics for the first half of the year:

  • 3,800: The number of publicly disclosed breaches.
  • 4.1 billion: The number of records exposed.
  • +54%: Increase in number of reported breaches vs. first six months of 2018.”

Dan Rafter, 2019 data breaches: 4 billion records breached so far

You can remedy this by investing in leading technology and keeping your systems up to date.

If you’re managing your own website, look for the solutions that are already available. Find ways to fill the gaps. For instance, if you’ve got a WordPress site that isn’t using SSL, you can fix that via a plug-in. Other plugins can help you protect against brute force attacks or track things like failed login attempts. Alternatively, opt for dedicated software, like Egnyte, FortiGate, and Code42, to name but a few.

If you didn’t already know, some ecommerce platforms offer their own privacy protections and purchase security, which might be a good reason to switch.

Challenges online marketplace sellers face #2: Customer loyalty

Online marketplace loyalty

The adage of it costing up to five times more to acquire a new customer than it does to keep an existing one remains true. But when you sell on someone else’s marketplace, it can help and hurt.

For example, small brands on Amazon can get in front of many more eyeballs than they would on their own. High-quality and affordable products can be rewarded through positive reviews and becoming a featured product, further boosting access to customers.

However, when someone starts getting incorrect orders from other sellers, or packages are consistently delayed, the customer may leave that marketplace. You could suffer because of how someone else sells.

What ecommerce brands need to do is have their own channel(s) to push people toward. If someone buys from you on a marketplace, why not include a coupon in their package that gives them a deal redeemable only on your website? If you run marketing and ad campaigns, send users to your pages instead of those on a marketplace.

Provide customer service directly through your channels and agents when possible too. That way, customers associate a positive experience with your brand directly. The same goes for blogging and dynamic emails from your own accounts, which can give users helpful tips and hints to better enjoy what they’ve bought.

Safeguard your future by treating a marketplace as just one channel, and referring customers to other channels that are unequivocally yours.

Challenges online marketplace sellers face #3: Unexpected price increases

Online marketplace price increases

All ecommerce companies face growing changes and price hikes.

There are some pretty standard cost increases around things like warehouse rentals and last-mile deliveries because demand is outstripping supply in many markets. At the same time, tariffs are introducing greater costs on goods and raw materials for many manufacturers and ecommerce brands.

If you target younger audiences, you’ll face greater advertising costs. Influencers are charging substantially more because they’re doing more data-related work around algorithms and boosting posts. This can mean a 25% increase in some cases, but most brands are willing to meet these increases.

Overall advertising has been getting more expensive, too. The cost of digital ads has risen about 12%, or five times faster than inflation.

Address these challenges by reigning in some efforts and doing customer research. Review customer information to see what they’re buying and why. Then, you might want to cut some under-performers or switch up how you use loss-leaders to drive more immediate conversions with top earners. Also, look for ways to use some efforts in multiple channels, such as social posts in email.

One important process is to walk through the entire customer journey to see how it works, and if you have any unnecessary steps or outdated content. Highlight reviews and customer ratings, keep relevant information easy to find, and make it as easy as possible for your customers to buy.

Challenges online marketplace sellers face #4: Economic uncertainty

Online marketplace stock

Financial crises have happened numerously; who knows when the next one will hit?

When faced with the prospect of a recession, market volatility, or any kind of economic uncertainty, there are a few go-to moves to help businesses. This applies to ecommerce and online marketplace sellers as well as mom-and-pop stores.

First, prioritize customer retention – increasing retention rates by 5% can yield an additional 25-95% in sales. So, keep the people you have happy with rewards and policies that deliver quality service. Hand-in-hand with that is loyalty programs for customers and employees alike. Programs to prioritize your team and prevent turnover can provide a performance boost that keeps sales and customer service levels high.

In terms of trade wars, review your suppliers. Look for areas to strengthen your relationships or find alternatives if your current partners become too expensive. Consistent business is good for them too, so see where you can create a mutually beneficial relationship.

And, at the end of it all, double-check your money makers by asking the following questions:

  • Can your core products be improved?
  • Can your processes related to these core products be improved?
  • Are there flaws to remove or complaints you can address?

Don’t spread yourself too thin with new markets and products or divisions before your main sales options can run on their own. It’s tempting to try and expand, but new products can come with a variety of R&D, marketing, customer profile, and other expenses that’ll put you at greater risk.

Challenges online marketplace sellers face #5: Stockouts and inventory overload

Online marketplace boxes

Stockouts and inventory overload – tough issues with a potentially easy solution.

Essentially, you can only sell what you have due to two-day shipping as a standard option. This means there’s less room to backorder or have long shipping times that give you enough of a lead to resupply to fill orders.

With this in mind, it’s time to invest in leading warehouse software that’ll give you accurate counts at a moment’s notice. Thankfully, most solutions integrate with ecommerce platforms, so you’re not having to do a lot of coding and managing data on multiple fronts!

Give yourself an even better advantage by picking up a warehouse tool that analyzes your inventory and purchase history. These solutions can make predictions on inventory levels you’ll need and look for trends up or down in your supply curve. You might be able to save on inventory costs by not ordering as much in your traditional slow times, while the systems will give you minimum levels for re-orders to avoid ever going out of stock on your best sellers.

Challenges online marketplace sellers face #6: SEO mastery

Online marketplace SEO

SEO gets harder every year.


Because new SEO rules from Google — many of which aren’t clear due to their black-box approach — are constantly coming out. Plus, there’s increased competition from ads and social posts.

With this in mind, it’s harder to stand out and make gains. Google has taken the direction to prioritize experiences and semantic responses, so the top-performing pages will be the ones that people visit, stay on longer, and come from more-trusted locations. Keyword metrics aren’t enough to cut it anymore.

Businesses need to respond in a few ways to stand out. Firstly, you need to learn everything you can about Google Shopping and how to use its Merchant Center. Telling Google that you’ve got things for sale will help you start to appear in its “shopping” areas.

Next, you’ll want to reorganize for the new reality of search: mobile and voice. Google prioritizes mobile-friendly websites, so you need to ensure that all your pages and sales options — including shopping carts and chatbots — work on mobiles. Second is adjusting how you build your website to respond to the way people talk, not type.

Research has estimated that half of all internet searches will be voice-based and 30% will be done on devices that don’t have a screen. So, answer questions the way people ask them and adapt to a true conversation.

“The way people searched traditionally is way different than they search via voice search.

The voice-based search is way more conversational and natural. Let’s say you would like to get some information about the SEO audit. Traditionally, you would open the search engine tab and type along the lines:

  • SEO Audit
  • Website Audit
  • Search Engine Optimization, etc

However, with voice search, your search process would be something like:

  • Hey Google, what is SEO audit?”

Asad Butt, Top Voice Search Statistics, Facts And Trends

Here’s a question to get you started in this SEO and content retrofit: If a voice assistant like Alexa read your TOS or FAQ aloud, would the customer be able to get the information they needed or is it too dense to understand?

Challenges online marketplace sellers face #7: Returns, refunds, and fulfillment

Online marketplace warehouse

In our contemporary world, not only do online shoppers want a positive experience, but they also want adequate returns and refund policies.

The 2017 UPS Pulse of the Online Shopper Survey found that 68% of shoppers view returns policies before making a purchase — which is up from 60% in comScore’s 2012 survey. And even if people like the policy, they’ll return products that are wrong, broken, or sometimes just not what they wanted. This will directly impact your current and future revenue capabilities.

You’ve got a few ways to ensure you go about returns, refunds, and fulfillment the right way.

First, you need to have a returns policy that is clear and fair. Don’t make people keep broken or damaged products and own up when you make a mistake. Work to make things right. You can either replace products or provide a refund.

After that, you need a returns policy that fits the customer experience.

For example, if you made the mistake, don’t charge the customer to return the product – give them a paid slip for a common carrier. If they’re returning because it isn’t what they wanted, then it’s okay to charge them for this, but you need to be clear about that beforehand. Make your restocking or other fees apparent and tell people how the process works when they contact you about a return.

Finally, you need to get your warehouse in proper order.

If a customer returns an order because it’s late, incorrect, or damaged, that’s on you. Look at your workflow to see where you can mitigate these risks. Introduce warehouse tools that double-check order accuracy as your team picks and packs. Audit packaging and filler to ensure it will protect goods in transit. Review your policies to ensure you get boxes to the carrier in time for the proper delivery.

If you don’t have the expertise, capital, or time to manage some of these concerns, then think about outsourcing. Generally, you’re going to see similar costs for outsourcing and self-fulfillment actions. The savings come in from reduced error rates, better delivery times, cheaper shipping (carriers give discounts for high-volume customers), and building costs (if you rent your warehouse).

Being successful online marketplace

After reading my pieces of advice, hopefully you’re now better prepared for tackling your seller-related challenges head-on.

Now, let me take a second to quickly talk about processes.

As an online seller, there’s a ton of processes and recurring tasks you’re completing so your products are bought, and those buyers receive their goods. And these essential processes are undergone every day.

Considering everyday processes are so important, you should be using dedicated business process management (BPM) software to help you with those endeavors.

Process Street is state-of-the-art BPM software that helps you take complete control of your processes, helping you achieve true online marketplace success!

How Process Street can help you succeed on the online marketplace

Process Street is superpowered checklists.

If you document workflows, business processes, and integral procedures as templates, you can then launch an infinite number of checklists to help you complete recurring tasks properly.

For more information, watch the video below.

What makes Process Street so valuable – and different from other BPM business software on the market – is its incredible workflow features.

Specifically, these features include (but aren’t limited to):

For a deep dive into some of these features, check out the following webinar.

To put it simply, Process Street can help you with all your seller-related processes.

This includes everyday processes and the processes you need to undergo for tackling the aforementioned challenges head-on.

For example, in terms of data security, if a staff member requests temporary access to restricted data, use the Privileged Password Management Template to ensure data leaks don’t then occur.

Click here to get the Privileged Password Management Template.

Meanwhile, newsletters are a great way to increase loyalty from customers. Process Street’s Creating a Newsletter Template will help make sure you’re establishing and sustaining customer loyalty properly with stellar content.

Click here to get the Creating a Newsletter Template.

Remember earlier when I said that relooking at the customer journey was crucial? The Customer Journey Map Template makes it easy to refocus on an already-established customer base, and make sure their journeys and actions are the ones you want them to take.

Click here to get the Customer Journey Map Template.

To boot, there’s also a ecommerce processes template pack so your store can be truly successful, and a logistics management template pack, ensuring your supply chain is perfected!

For other free, ready-made templates, check out Process Street’s extensive template library.

With the advice I’ve provided and the free templates courtesy of Process Street (don’t forget it’s free to sign up to their checklist app!) you’re ready for any challenge that presents itself to you as an online seller.

Are you a seller on an online marketplace? If so, are there any issues, problems, or challenges you’re facing that aren’t on this list? Discuss them with the Process Street community – someone might be able to help you out!

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Thom James Carter

Thom is one of Process Street’s content writers. He’s also contributed tech-related writing to The New Statesman, Insider, Atlassian, G2, The Content Marketing Institute, and more. Follow him on Twitter @thomjamescarter.

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