Rethink Selling On Marketplaces

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💡 Should Small Brands Sell on Marketplaces?

For small or relatively new brands, the goal is clear: build a strong identity and own the customer relationship. Many founders avoid online marketplaces like Amazon or Taobao, worried about commissions and algorithm-driven visibility. But science shows this hesitation may be misplaced.

💡 Here Are the Insights

1️⃣ Marketplaces Lower Acquisition Costs: Acquiring customers directly through ads, SEO, or content is expensive. Research shows brands spent 24 percent of revenue, including marketplace fees, to acquire customers through marketplaces. In contrast, acquisition costs on a brand’s own website ranged from 30 percent for mature brands to as high as 100 percent for newer ones.

2️⃣ Marketplaces Drive Direct Sales: Every 71 sales made on a marketplace generated one customer who switched to buying directly from the brand’s website. Very few customers switched the other way around. This means marketplaces can act as an affordable funnel for long-term customer acquisition.

3️⃣ Categories Matter: The effect is stronger for products with low prices, like stationery, or high variety, like t-shirts. These categories benefit from marketplace discovery and encourage repeat purchases on brand-owned sites.

💡 Why It Works

Marketplaces attract large, diverse audiences that individual websites cannot match. Customers often discover a brand on a marketplace first, then switch to direct buying for more options, better prices, or exclusive benefits.

💡 Real-Life Example

Cosmetics brand Typology sells only through its website and one store in Paris. By avoiding marketplaces like Amazon or Zalando, it risks missing discovery opportunities. A smarter strategy would be to sell bestsellers on marketplaces, while offering bundles, diagnostic tools, and exclusive gifts only on their website to drive repeat purchases.

The Takeaway

For small brands, marketplaces are not competitors; they are customer acquisition channels. By selling selected products on platforms like Amazon and then giving repeat buyers reasons to purchase directly, you combine low-cost discovery with long-term relationship building.

💡 Two Strikes and You’re Out: Why Customer Experience Is Critical

Customers today have little patience for poor experiences. Marketing may attract attention, but service determines whether people stay. Recent data shows just how unforgiving customers can be when things go wrong.

💡 Here Are the Insights

1️⃣ One Mistake Is Costly: A single bad experience is enough for 25 percent of customers to walk away. That means one late reply, a cold interaction, or a confusing process could cost you a quarter of your audience.

2️⃣ Two Mistakes Are Fatal: Almost half of customers churn after two negative experiences. By the second bad interaction, 70 percent of your customer base is gone. The tolerance window is razor-thin.

3️⃣ Marketing Gets Them In, Service Keeps Them: Strong marketing campaigns may win the first purchase, but retention depends on service. Every touchpoint, from response times to tone of voice, directly affects loyalty. Customers who feel undervalued rarely give brands another chance.

💡 Why It Matters

The numbers prove that customer experience is not optional. Retention drives profitability, and poor service erodes it faster than weak marketing ever could. With acquisition costs climbing, losing customers over preventable service issues is a risk no brand can afford.

💡 A Practical Tip

Track service-related churn the same way you measure ad performance. Make “saving the customer” a shared KPI between marketing and service teams. Every support interaction should be treated as retention marketing in action.

The Takeaway

Customers may forgive one mistake, but rarely two. Brands that prioritize seamless service, empathy, and consistency will retain their hard-won customers. Those that do not will find themselves spending heavily on reacquisition, a costlier and less effective path to growth.

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