Marketplace Solutions

A marketplace can employ one or more fulfilment strategies inline with business goals, such as Dropship, Consignment, Click and Collect or a mix. The choice of fulfilment strategy ultimately has an impact on the marketplaces buying experience and profitability

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Dropship

Dropshipping was originally invented with one main purpose in mind, to reduce supply chain costs and logistical complications.

When dropshipping, retailers or marketplace operators sell products they do not physically stock, which are shipped directly from the seller to the buyer.

A huge benefit of dropshipping is the massive saving on the cost of warehousing and logistics, for the marketplace operator, which also provides massive opportunities for marketplaces to scale without physical limits.

Seller managed shipping

Using this model the order is forwarded to the seller who then use their own courier or shipping method to ship the products to the buyer.

The cost of shipping, in this case, can vary from seller to seller and can create friction at the checkout for buyers which can lead to more abandoned orders.

In this scenario there are two ways to handle the cost of shipping:
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  1. The seller explicitly requests specific shipping charges which are collected by the marketplace and forwarded to the seller, as an addition to the product price (minus any marketplace commission and/or fees).
  2. The seller provides an all inclusive product price i.e. including shipping. In this case the seller is not forwarded any shipping charges even if shipping charges have been collected from the buyer by the marketplace. This all inclusive product price is forwarded to the seller (minus any marketplace commission and/or fees). Usually in the case the marketplaces offer Free Shipping as a sales strategy.

Operator managed shipping

Using this model the order is forwarded to the seller however the cost of shipping in covered by the marketplace who provide shipping labels.

The cost of shipping, in this case, can be more predictable and controlled as it uses the marketplaces shipping method. This creates a more consistent pricing experience for the buyers and provides better tracking of shipments.

Most large marketplaces can take advantage of discounts and offers available to them via their courier company which can lead to lower shipping costs and less abandoned orders.

Note: The shipping labels have to be managed in  Marketcube as shipping labels have to be generated for each seller, as the "Ship from" address will differ for each seller and hence has to be calculated on each line item and its associated seller in a given order.

Usecases

  • P2P
  • B2C
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Consignment

Consignment mirrors in part to a normal online stores operational model i.e. the marketplace operator is responsible for, at least the last mile, delivery to the buyer.

When using consignment, retailers or marketplace operators either pick and deliver buyer or the sellers deliver to the operator first who then deliver to the buyer.

This is a costlier model to operate but does provide control to the marketplace operator in terms of branding and service delivery.

Managed Marketplace

Using this model a marketplace can offer a managed service for their sellers. Warehousing their product and also shipping them to the buyers.

The main advantages to the marketplace is that they can control their brand experience and create a more predictable logistics process especially where smaller less organised sellers are concerned.

The seller is still kept up to date will all the sales and the payouts.

Uses Cases

  • Local delivery
  • Recommerce, second hand
  • Curated marketplaces
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Click and Collect

As a fulfilment strategy Click and Collect, also known as kerb-side pickup, is not new. Many businesses employ this today to enable customers to place orders online and allowing it to be collected physically from a branch or an outlet.

Marketcube goes one step further by allowing independent third party seller locations to be incorporated into a businesses offline branch or outlet network, via a common marketplace.

Local Pickup

Using this model the a marketplace can offer buyers the options to buy online but collect from the sellers location.

Reserve and Pickup

Using this model the a marketplace can offer buyers the options to reserve products online but the pay and collect from the sellers location.

Usecases

  • Online Malls driving footfall to tenant stores
  • Buy international and pickup locally
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Services

Offering services such booking personal trainers, health care services or food deliveries via a marketplace is a growing commerce trend and one that offers many opportunities online.

Services are non-physical in nature and hence do not require a "shipment" but still are delivered physically and/or virtually.

All services are created as products but have additional dimensions of Location, Capacity and availability along with other standard product information such as description and price.

Single services

Using this model a marketplace can offer buyers the options to book services of a single type e.g. booking personal trainers in a given area.

Multiple services

Using this model a marketplace can offer buyers the options to book services of a multiple types that are booked differently e.g. booking an events venue for 50 people, with a DJ, flower decorations and food catering all constrained by a date that will drive availability.

Usecases

  • Services based marketplace for physical delivery of services
  • Services based marketplace for virtual delivery of service
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Hybrid

As a fulfilment strategy this is highly advanced yet hugely flexible whereby marketplaces can offer all of the above mentioned fulfilment strategies across their sellers.

Today many businesses offer delivery and pick up to their customers, however, offering this model across independent businesses through a marketplace has not yet been exploited fully.

Physical delivery

Using this model a marketplace can offer buyers the options to buy products for shipment along with the ability to book complementary services e.g. buying a TV online and also booking an independent engineer to install, on a chosen date

Online and Offline

Using this model the a marketplace can offer buyers the options to buy products for shipment along with able to book complementary services e.g. buying a TV online and also booing an independent engineer to install it on the wall on a chosen date

Usecases

  • Mall automation
  • Full service marketplaces offering products and services