How Instagram can create the engagement required for your online marketplace

Much like the rhetoric saying goes, “A picture speaks a thousand words,” the social media universe has recently upgraded from textual ‘status updates’ to visual ‘stories’. If you will look at the most popular photo-sharing social platform, Instagram, it now boasts of a large community of 800 million members. More than 500 million daily users are actively engaging on Instagram, which definitely makes digital marketers all over the world go gaga over it.

But, why is Instagram stealing the limelight in digital marketing?

First things first, the takeaway is visual and it leaves a lingering imprint of the minds of the user. Humans absorb more knowledge when they have a visual aid in addition to reading about the matter. Vloggers and bloggers have been milking this aspect of audience’s attention for years. That makes product reviews and tutorial videos popular on the internet.

Secondly, engagement strategies become easier to materialize when you can have your target customers interact with your campaigns on the go. Instagram, which is essentially a mobile application, provides its users the virtue of mobility and it is extremely flexible that way. The instantaneous approach is what makes it really unique and appealing to the users.

Thirdly, let us talk about the ‘Insta’ vibe that has come into play. Unlike Facebook and Twitter, Instagram has a refreshingly youthful vibe. With a relatively large number of users below the age of 30, digital marketing in Instagram has to be extremely youth-centric. New brands are coming in every day and are aggressively hitting the adventurous side of young people, which older brands have yet refrained to do.

Fourth. Instagram is live, yet uniform in nature. Instagram hashtags let your posts become easier to discover as they appear in hashtag searches, ‘Explore’ tabs or on your followers’ Instagram feeds. And voila, instant feedbacks! Who doesn’t love that?

Also, it is not about the wide-screen visibility anymore, it is about anything that can fit into a square view. Be it videos or photos, everything is set into a uniform square format in Instagram making it soothingly simplistic.

Results?

In November 2017, Instagram had 25 million businesses actively engaging with their target customers, which was a jump from 15 million in July 2017. The numbers speak for themselves, don’t they? 80% users are following at least one business on Instagram and statistics suggest that in the first half of 2017 over 120 million Instagrammers visited a website, received directions, called, emailed or direct-messaged to learn about a business. Hence, even SME businesses are not shying away from using Instagram as a visual call-out to their web stores, because of its simplistic yet prepossessing vibe.

Online marketplace businesses are thriving, courtesy Instagram

Online marketplaces are trending among retail, tourism and food businesses. An online marketplace is a platform that enables vendors or brands to put their goods or products on display and sale in your store. It is almost like a shopping mall, only virtual, where consumers can make the purchase decision after browsing through a wide range of products from different brands. Globally recognized e-commerce giant, Amazon’s online marketplace is probably the most notable of such an online business model.

Beauty and cosmetic brands marketplace, Ipsy, has a particularly intriguing Instagram success story. With 2.1 million followers on Instagram now, Ipsy’s digital engagement strategy of building an influencer community of its own worked out really well for their business. When popular beauty vloggers collaborated with Ipsy, they brought in their followers to the campaign as well making Ipsy one of the most popular businesses on Instagram.

 

@micaelakbeauty, can you teach us your natural glam ways? || #ipsy

A post shared by ˗ˏˋ 💄 ˎˊ˗ (@ipsy) on

 

 

Popular online fashion store, Nordstrom, has 2.7 million followers and what is unique about their Instagram profile is that they are selling what they are showing. They let you in on their Instagram photos through a ‘like2buy’ URL in their intro and you can literally purchase those exact looks and outfits from their website. It is like having a stylist at your favorite store to assist you with your purchase decisions.

 

Well-rounded #shelfie. What’s on your shelf? #beauty

A post shared by Nordstrom (@nordstrom) on

 

Help us pick! Left or right?

A post shared by Nordstrom (@nordstrom) on

 

Getting the best out of Instagram for an online marketplace

It is a great time to be on Instagram if you have an online marketplace business. The number of paid marketing messages has reached a saturation level on Facebook and the percentage of Facebook users engaging with businesses is drastically falling every day. On the other hand, Instagram marketing strategies have proven themselves to be extremely engaging, yet relatively inexpensive to fathom. To a digital marketer’s delight, organic marketing still works pretty well for Instagram if only one knows how to get the best out of this platform.

Successfully promoting your brand identity on Instagram will be a cakewalk with some of these handy tips.

    • Look around you: Whether you are a newbie or fairly familiar with Instagram marketing, once in a while you need to stop and take a look at what strategies have worked out for others. You can start with listing out your competitors in the market and research their methodologies. It is also healthy to learn about the industry best practices and trends in Instagram marketing.
    • Building a comprehensive strategy: Once you are acquainted with your competitor’s strategy, industry best practices, and trends, it will be time for you to brainstorm over a primary strategy for your Instagram profile. Since the experience on Instagram appeals to the eye; clarity, simplicity, and uniformity should be key elements of your images. Think of your profile as a canvas, which needs to be painted with beautiful pictures that have compelling themes and messages. Decide early on the color palette, themes, and typography that compliments your brand and products.
    • Master the art of Hashtagging: Hashtags allow your posts to appear on organic searches and be discovered by Instagram users. This functionality makes choosing the right hashtags extremely important. Hashtags have to be relevant to your target user segment, your posts and your brand identity apart from being popular. Instagram lets you add 30 hashtags to your posts but research suggests that for optimal results 11 wisely selected hashtags will do the trick. In addition, the stats suggest that among all the popularly used hashtags, 70% are branded hashtags. Create your own brand hashtag and weave the hashtag seamlessly into your campaigns to increase visibility.Online websites like All Hashtag and Iconosquare let you find and analyze hashtags for your Instagram profile.
    • Keep a bird’s eye watch on the analytics: Whether you are spending money on paid promotions or just your time and effort, you should be able to measure the outcome of it all. Even though, Instagram provides user engagement data under the ‘Insights’ tab, with Iconosquare you can also keep an eye on the analytics front in depth. Keep tabs on your posts’ performance, user engagement metrics, follower count and churn rate data all at one place.
    • Be original and creative: Phenomenal photography and photo-editing skills are extremely important when you are trying to stand out in the crowd. Be very creative and keep A/B testing till you find the nerve of your followers and what kind of images work well for them. You can also find or purchase stock images on Pexels, Shutterstock or Flickr. Online editing software like Pixlr and Canva can be useful for editing photos for Instagram if you don’t have one installed.
    • Mind the time: You can’t really narrow down a particular day or time to ensure that your Instagram posts get the maximum traffic. However, if you follow the Instagram insights and your engagement data closely, you will find a pattern after a while. The pattern will suggest which days of the week and time of the day works best for your posts. This will give you an idea of what should be the ideal time for you to post on Instagram.
    • Remember the ‘social’ aspect of social media: If you have learned anything from the Ipsy success story, you will know the significance of collaborating with influencers on Instagram. Influencer marketing is one of the trending practices in social media these days. Influencers have their own set of loyal followers and collaborating with them would mean phenomenal outcomes as far as expanding engagement is concerned. Build a community of influencers. Start small and show compassion for other businesses in the community.
    • Contests will keep’em hooked: Plan fun and interactive giveaway contests. Prizes work as incentives for users to connect with your brand. It’s also a great opportunity to introduce your brand hashtags and use ‘tag-a-friend’ strategy to improve visibility organically.

For years, Facebook has been a go-to platform for digital marketers but seems like Instagram is slowly upping its game to accommodate more and more businesses, especially online marketplaces. Moreover, the prevalent ideas of social media marketing are slowly dwindling because users appreciate visuals more than words, the reason why Instagram is the best marketing platform today. How do you use Instagram for your business? Let us know in the comments below.

 

What is the best revenue model for your online Marketplace? Part-Two

I haven’t yet read the 1st Part

Welcome back. In our last blog, we raved a lot about commission model. We discussed the core benefits of it. We also shed light on the strategies of the marketplace leaders and the viable options before emerging players.

Besides that, we request you not to write off other two revenue models. Why so? Let’s start with membership/subscription model-

The Membership/ Subscription Model:

Membership/subscription model is the best option for recurring revenue. Admin can tempt the vendors with the access of more assistance and better features with different membership plans. That’s not all. There are other perks-

Admin is not dependent on vendors’ performance: 

Vendors know the worth of a good marketplace. They are always looking to sell their goods, showcase their services and stand out in the crowded e-commerce sector with a reliable platform. If there is a dip in their sales for a certain period of time, most of them will stay loyal to their existing marketplace, willfully paying admin their subscription fee (monthly, weekly etc).

Here, subscription model generates more revenue than the commission model. Commission model is entirely dependent upon each and every transaction. But, beware of the traps of recurring revenue. No vendors will be agreed to subscribe months after months if they do not get enough traction from that particular marketplace. They will look for a new platform to draw traffics to their products/services.

Subscription Model can limit vendor capabilities:

This is interesting.

Unlike commission model, the subscription model does not get benefited from each transaction. Without any strategic subscription plans for vendors, there are enough possibilities for them to consume all the profit pie. A well-thought out subscription can halt the free run without blocking their healthy business. Does that sound a puzzle?

The best solution is to give basic marketplace features to vendors, limit their capabilities with a lower subscription plan and lure them with costlier membership plan or subscription package for more advanced features.

How are the big players playing?

Ebay

Ebay is a good example of subscription model practitioner.  ebay subscription model Along with the commission model and listing fee, the marketplace giant Ebay has introduced the subscription fee for sellers.They have earned the confidence of their vendors to implement different subscription plans along with other revenue streams. Ebay is pretty clear in limiting or providing additional ben vendors’ role in their subscription model. Have a look-

subscription-model-ebay

LinkedIn:

A well-optimized subscription model is a revenue-generating machine. LinkedIn which has shaped up as a job marketplace with their Premium Subscriptions model has increased it’s revenue 21% in recent years with this strategy.

Match.com:

Subscription model success is all about tempting the service-providers. Peer-to-peer dating marketplace match.com knows how to entice the platform users-

subscription model

Image Source

Amazon:

A successful subscription model knows how to strike a balance. Amazon has exempted their subscribed sellers from flat fee.

When worked well, the subscription model can trigger benefits for a service-marketplace. Upwork has two subscription plans under the “Basic” and “Plus” categories offering additional features for both the agencies and freelancers. Closely look at the Upwork Plus plan which has categorically offered and limited certain features to both the freelancers and agencies.

Upwork Plus Membership Plan

Freelancers

Agencies

An additional 10 Connects per month (plus a prorated first month’s allotment).

The ability to support unlimited team members.

The ability to buy additional Connects as needed for $1 each.

An additional 20 Connects per month (plus a prorated first month’s allotment).

Rollover privileges so that up to 140 unused Connects can be carried over to the following billing cycle.

The ability to buy additional Connects as needed for $1 each.

Visibility into their competitors’ high, low, and average bids on jobs.

Rollover privileges so that up to 160 unused Connects can be carried over to the following billing cycle

The ability to create a customized URL to your freelancer profile.

Visibility into their competitors’ high, low, and average bids on jobs.

The ability to hide earnings on your freelancer profile.

The ability to create a customized URLs of your team members’ profiles

The ability to hide earnings on your agency and team members’ profiles

Information Source

Lessons that we have learned

Subscription Model is always not the best option for product-marketplace:

Though it has a lucrative advantage for generating recurring revenue, subscription model is not a complete revenue system for product-marketplace. Amazon has Subscribe and Save service on selected products where the core of their business is run by the commission. You won’t see Amazon suddenly transition to a subscription-based company.

Figure out opportunities to tempt vendors:

Admin must provide additional features (inventory, delivery management) to lure the vendors for a higher subscription plan. Without adding real value to vendors’ cause, no subscription model can win sellers.

Service-marketplace is a better option for subscription model:

Peer-to-peer or customer-to-customer service-marketplace do not have concerns of providing product management and delivery service. They can lure the vendors through the better accessibility of the platforms. Just what Upwork does.

Challenges in setting up subscription model:

  • Provide different plans: So that vendor has convenient options to switch. Upwork has “Plus and Basic model.”
    Ebay offers three different models.
  • Restrict the vendor capabilities: Each plan must have their own benefits and limitations. This is your best bet to tempt the sellers.
  • Flexibility to implement other revenue paths: Admin should have the option to stimulate revenue across a different path.

With WC Marketplace setting up a flexible membership/subscription plan is hassle-free and an automated process. Let’s explore the perks from the core-

  • Admin can create different membership plans: Being a robust solution, WC Marketplace offers pre set-up fields to the admins who can subsequently invite the vendors to choose among those customizable plans.

membership plan WCMp

  •  Admin can limit vendors’ capabilities with WC Marketplace: Admin gets numerous fields to assign responsibilities to vendors and limit their capabilities in their marketplace platform built by WC Marketplace.

vendor membership WC Marketplace

  • Run Multiple Revenue Model Simultaneously: Running both the membership/subscription model along with the commission model is never a brainer with WC Marketplace. You just have to fill in the required checkbox.

vendor membership plan

The Final Call:

If you are a startup with a product marketplace venture, it’s better to start with commission over membership model in initial days or provide additional facilities (shipping, logistic management etc).

However, a well-optimized subscription model can be a real breakthrough for your service-marketplace as providing additional assistances here (Upwork model) would be more hassle-free.

Our efforts of helping you the riddle of marketplace revenue model do not end here. The last puzzle of “Listing Fee” is yet to be unwrapped. Will it be a trump card for your marketplace? The answer lies in our next blog.

Take me to the 3rd Part

What is the best revenue model for your online Marketplace? Part-one

Marketplaces are earning huge revenues across the globe.

With 300 million active users and 2 million-plus third-party sellers in the pocket, Amazon is the big daddy of all. Ebay is not far behind with net revenue amounted close to 8.98 billion U.S. dollars. In June 2015 the room-rent marketplace Airbnb was valued at 25.5 billion U.S. dollars. The Uber app is available in 77 countries and 527 cities worldwide and has over 8 million users worldwide.

Four different marketplace success. One common thread.  They have all figured out their revenue path.

Many of the marketplace owners fail here. Why? Because they do not wait to research on-

  • Different marketplace platforms
  • Industry-best practices
  • The pros and cons of each revenue model

Let’s overcome them step by step-

Different platforms of marketplace :

Marketplace has six business model based on platforms-

  • B2B-Transaction between companies
  • B2C: Transaction between companies and individual
  • C2B: Transaction between customer and company
  • C2C: Transaction between customer and customer
  • B2E: Transaction between business to employee
  • Others: Transaction where the Government plays an active role. G2G (Government to Government), G2E (Government to Employee), B2G (Business to Government), G2B (Government to Business), G2C (Government to Citizen)

What does these marketplace offer?

All these six marketplaces use different platforms to connect their audience and vendors but their offerings are not widely polarized. They can easily be categorized under-

  • Product based marketplace (Amazon, Ebay, Etsy)
  • Service-based marketplace (Uber, Airbnb)

What are the available revenue options for the marketplaces?

There are three primary options-

  • Commission
  • Subscription/membership
  • Listing fees

All these three options have their shares of benefits and shortcomings. Which will be best for the product marketplace and service marketplace?

In our three blogs series, we have taken a shot at this question. Each one of our blogs will provide insights, data, and technical know-how to decide and set up the most fertile revenue model for your next marketplace.

The Commission Model 

All leading marketplaces (Amazon, eBay, Uber, Airbnb, Etsy) have selected the commission model for revenues. Why have they so much trust in a model where an admin has to split the earning with vendors? Let’s introspect-

Benefits of Commission Model:

1. First and foremost, admins get a share of every transaction and each value that take place at their platform. Same benefits are not available with the subscription and listing model.

2. In the commission model vendors do not need to pay an additional cost to list and showcase their product.  If the provider is not earning any value, the marketplace run by the commission model will not ask for a single buck.  The commission model is a big bet to win the trust of the vendors.

How are the marketplace leaders playing?

First, we will discuss product-marketplaces.

Amazon:

Amazon has two different commission models for small vendors (individual seller) who have limited number of products (less than 40) and pro-merchants. Have a look-

amazon commission model

As far as commission plans are concerned, Amazon has multiple breakdowns-

amazon commission model- revenue model for marketplace

Image Source

Sellers pay a referral fee for each item sold.

Amazon also charges for shipping and product delivery if sellers are using those services. The charges also get varied if someone is using the subscription services of Amazon. For example, Pro Merchant will not be charged the per-item fee.

An example of how much a seller makes money in Amazon.

Ebay:

Ebay also follows the commission model. They are charging a flat final value fee of 10% of the sale price. It varies as per product category.

Alibaba:

Alibaba, on the other hand, has an interesting stance on their commission model.

Their largest website Taobao operates as a fee-free marketplace where neither sellers nor buyers are assessed a fee for completing transactions. However, Tmall which is Alibaba’s B2B marketplace platform for larger retailers charges the commission fee based on the category of the product sold.

Alibaba commission model

Image Source


Etsy:

Unique handmade and vintage art product marketplace Etsy follows the commission model along with listing fee model. Etsy charges sellers a commission for every sale which is 3.5%.

Let’s turn the table to the service-marketplaces.

Service-driven marketplaces have also opted for commission model.  As there is no product for a transaction, the marketplace provides a platform for “service fee”.

service-marketplace commission model


Airbnb:

C2C marketplace Airbnb has followed the model and charges from both the hosts and guests.

1st) Commission from Property Owners (Hosts): Airbnb charges flat 10% commission from hosts upon every booking done through the platform.

2nd) Transaction fee from Travellers (Guests):. Airbnb charges 3% of the booking amount as transaction charges from travelers upon every confirmed booking.

Has it gone in their favor? Well, a report says, “With a total funding of $2.3 billion till date, the unique business model of Airbnb has even become stronger as people prefer staying at an Airbnb inn rather than a hotel.”

Lessons that we have learned:

The best revenue model for any product-marketplace:

Ebay and Etsy have listing fee. Alibaba (Sellers at Taobao pay to rank higher on the site’s internal search engine and generating advertising revenue.) follows advertising model. Amazon has additional subscription services for vendors.

But none of them have skipped the commission model which profited both the vendors and marketplace owner after every transaction.

Best revenue path for marketplaces in its initial phase:

Subscription model success depends on the additional services provided by the marketplace owner. On the other hand, vendors will reject the marketplace which has no strong audience base but run by the listing fee. Whereas commission model is hassle-free. Once vendor and admin come to a mutual consideration on the commission split-up, the cash-flow of the trigger will be autonomous.

Melltoo, a rising marketplace in Dubai has made the Commission model their strength and currently growing big.

Challenges of setting up a flexible commission model: 

Frequency to split commission:

Marketplace owner has to figure out the best possible frequency or time to split the commission with vendors. Will it be weekly or monthly?

Amazon disburses the commission by periodic bank transfers to the sellers’ account.

Flat fee or percentage on the transaction:

Marketplace owner must figure out the best possible options to disburse the commission. Will it be a percentage fee or a fixed amount or a model combining both?

Amazon charges sellers a percentage of each sale they make on the marketplace.

Global fee or different on product categories:

Will it be an equal fee for all vendors or there will be a different commission on per products?

Amazon charges referral fee which is different as per product categories. Plus, professional merchants who pay a monthly subscription fee of $39.99, they do not have to pay the $0.99 per item fee.

WC Marketplace, a complete marketplace solution helps to integrate these features. 

First, admin can select the frequency at which you wish to disburse the payable amount

commission model wc marketplace

Second, WC Marketplace allows multiple disbursal models to disburse commission as per their favorable option-

  • Percentage of transaction/sale value.
  • Fixed amount per unit.
  • Percentage of the transaction/sale value + a fixed amount per transaction.
  • Percentage of the transaction/sale value + a fixed amount per unit.

Admin just has to select their preferred commission type-

commission model wcmp

Third, If you go by the model of Ebay or Amazon where the marketplaces include the shipping charges or any other fee (tax, inventory management), WC Marketplace offer you simple integration. Look below-

 

comission model wcmp


Is it the best option for the marketplace?

For any new marketplace, starting with a commission model is a safe bet. Share of values. Check. Good bond between admin and vendors. Double Check.

But, you do not need to write off membership and listing fee models right now. They have their shares of exclusive perks and some leading marketplaces have grown in stature with those gems. Want to reveal those perks, keep your eye on our next blog.

Take me to the 2nd Part
I am ready to read the 3rd Part

Web Stores Vs. Marketplaces Part – II

In the previous article, we talked about how some factors such as development and deployment timelines, budget and competition affect both standalone web stores and multi-vendor marketplaces. We saw that although web stores offer an unparallel degree of control over how you manage your e-commerce business, it fails to provide you the ease of operation that marketplaces enjoy.

On one hand, you can customize your own store to any extent you wish with a library of developer supported plug-ins, a multi-vendor marketplace takes the pain of micromanagement away and leaves you free to concentrate on selling your products which is the whole point of an e-commerce business. However, the differences don’t end at that as there are 3 other major points we must discuss before you can declare yourself reasonably well informed enough to choose which path to follow on the way to set up your online venture.

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Why Your Marketplace Needs to Appeal to Millennials?

Now we have read enough trade articles, news reports and marketing blogs to know that millennials are THE market segment that any B2C venture should be targeting right now. I have to agree with each and every one of them too. The numbers say it all. They are larger than the Baby Boomer generation – one of the most economically prolific segments in history, and at least three times larger than Generation X. Add to that the fact that the average millennial’s purchasing power which totals to $1.3 trillion annually far exceeds that of the preceding Generation Y which capped out at a nominal $600 billion per annum.

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Building a Better Marketplace Experience

According to a report by Internetretailer.com, online marketplaces are set to grow at a rate of 25% worldwide in 2015. Consumer seems to be increasingly migrating towards online marketplaces and as far as the current trends are concerned 38% of online shoppers in the US began their product searches on Amazon compared to 11% through search engines like Google. Another interesting piece of information is that
90% of online sellers in the US and UK sell through online marketplaces like Amazon. However, building a marketplace is no easy task. There are certain things you have to keep in mind before you leap into such a highly competitive environment. To say the least, it’s a minefield and it’d be a good idea to step lightly and avoid getting blown up.

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marketplace experience

Niche Marketplaces – What Makes Them Viable?

Amazon may rule the roost when it comes to online marketplaces and with net revenue of $25.36 billion in the last quarter alone, there is little evidence to dispute that fact. However, Amazon and similar marketplaces such as Ebay and Alibaba rake in big business because they cast a wide net. Such horizontal marketplaces cater to a very large number of people because they have an astronomical selection of products on offer.
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