Is the most important customer for e-commerce marketplaces now the seller?
As major players from Target to TikTok expand their digital ecosystems, sellers now enjoy more leverage, enabling them to be highly selective about where they list their products. To win over these valuable partners, many marketplaces look beyond low fees and offer a sophisticated blend of fulfillment, advertising support and operational ease.
Why Sellers Have Unique Leverage
Sellers bring variety and selection to online services and fund their growth through commissions, ads and payment for fulfillment services.
Companies like Amazon, TikTok, Walmart, eBay, Target and Best Buy pour resources into wooing sellers. Last August, for example, Best Buy launched its third-party marketplace to add more brands and items to its website and app. And Target announced massive investments into its own online marketplace to enhance the omnichannel experience, “By further blending its one-of-a-kind physical, digital and social commerce shopping experiences.”
Online stores compete not just on who gets the most customer traffic but also on who can be the most reliable partner to the businesses that power their marketplaces. With low switching costs and easy multi-service selling, sellers can afford to be selective and pull their wares from websites that don’t meet their needs.
Many also choose a “multi-home” approach, selling in multiple marketplaces simultaneously. A small luxury beauty brand, for example, simultaneously might aim for category-specific customers on Ulta’s UB Marketplace and for higher-income shoppers on Nordstrom Marketplace.
Five Key Strategies to Attract Sellers
Whoever can offer sellers the best blend of tools, profit and trust wins the game. Sellers consider five main areas when “shopping” digital services.
1) Commissions
Fee structure is still the first filter sellers apply. Instead of one universal commission, marketplaces are moving toward a variety of tactics, like discounts for new sellers, incentives for specific categories, time-bound promotions and credits through ads or fulfillment participation. One example is a brand referral bonus. If a seller drives traffic to the marketplace from their own social media ads or email lists, a marketplace can credit back a significant portion of the commission on those sales. This effectively turns the marketplace into a lower-cost checkout tool for the seller’s own marketing efforts.
2) Fulfillment
Initially, marketplaces like eBay expected sellers to handle their own logistics entirely, but the company began to offer fulfillment services in 2019 to help sellers, “meet rising consumer expectations while reducing cost and complexity.” This can be a win for both the marketplace and the seller, because it especially benefits entrepreneurs and small businesses who don’t have the resources to perform fulfillment on their own.
For example, Fulfillment by Amazon helps sellers offer Prime subscribers free, two-day shipping. Amazon will pick, pack and ship orders, as well as handle customer service and returns. Similarly, Fulfilled by TikTok ships products purchased on TikTok Shop with free 3-day delivery on eligible items.
3) Demand Generation
Ads aren’t merely a monetization layer anymore; they’re a seller retention mechanism. Sellers want conversion-ready attention and predictable, measurable performance, not just “reach.”
While putting an ad on the side of a bus may get a lot of eyes on it, customers that actually want or need to see it may not take the bus or see them often. But advertising with digital services enables businesses at a significantly lower cost to more closely target customers that would actually be interested in their products, increasing the likelihood of the campaign achieving the ad’s purpose. Marketplaces that can pair low-friction ad tools with audience targeting and real purchase intent become more appealing because advertising stops feeling like a tax on user attention, and starts being a growth engine.
On TikTok Shop, for example, commerce is the content: creator partnerships and promotional tools are a part of the seller acquisition pitch. Best Buy is explicitly pitching a blend of marketplace selling plus its advertising ecosystem, “Best Buy Ads,” as part of their value proposition for sellers.
4) Curating Other Quality Sellers
Many sellers don’t want digital services where anyone can list just anything, because customers want curation, and to be able to trust the quality of the products they’re buying. Online marketplaces actively take steps to improve the quality of their services, prevent fraud and reduce bad experiences for sellers and buyers.
For example, Best Buy’s marketplace positions itself as selective and curated. CEO Corie Barry has called it a “curated, tailored marketplace” designed to expand and deepen product assortments offered to its customer base.
Additionally, Amazon’s Counterfeit Crimes Unit (CCU) works with brands, customs agencies and law enforcement to track down counterfeiters, shut down bad actors’ accounts, seize counterfeit inventory and prosecute those involved.
5) Ease of Operations
One of the biggest barriers to seller expansion isn’t insufficient demand; it’s operational overhead, including listing products, syncing inventory, managing customer service and handling returns across sales channels. Beyond fulfillment services, marketplaces are racing to remove friction in these areas, because the easiest platform to operate on is the one where sellers will scale first.
Target is increasingly streamlining the operational burden for third-party sellers on its Target Plus marketplace by leveraging its “stores-as-hubs” model and integrating advanced AI tools. The company simplifies third-party operations by handling all in-store returns, providing AI-driven demand forecasting, offering streamlined Shopify onboarding and granting exclusive access to its advertising network within a curated, quality marketplace of other sellers.
E-commerce marketplaces don’t fight just for shoppers; they compete to attract and retain high quality, reliable and popular third-party sellers. Ultimately, the successful marketplaces will be the ones that provide sellers with the most effective combination of profit, tools and a trustworthy environment for them and their customers to do business.
Image via Unsplash.