Online marketplaces vs stores: what's the difference?

I live in Cape Town. It's not a bad place.

Cape Town is lovely.

World Design Capital 2014, home to mountains, beaches, vineyards, and more. One of my favourite things to do on the weekend (and on the occasional weeknight) is visit one of Cape Town’s many markets. They’re great for finding favourite new designers, delicious food, and craft beer. But, every time I’m there, I get sidetracked thinking about the business mechanisms behind the scenes.

Marketplaces are a very particular entity, and there are a lot of things to consider. Which stalls will make it, and which won’t? Is there a recipe for success? How do they know what the right price point is?

This always makes me think of my friends over at Hello Pretty, and how their site is effectively a giant online market comprised of a number of independent stalls, and how the same things must be considered. (And, the fact that they have an edge over a physical market because you can shop there without the Cape winter beating you into submission!)

Hello Pretty? Hello Marketplace!

Hello Pretty is an online marketplace, and not an online store. A lot of people don’t realise the difference. The crux of the matter is that they don’t sell anything themselves - they allow other people to sell. The onus is on the sellers to build their brands, while Hello Pretty provides a platform for them to do that.

There are a few key points to remember for both sellers and buyers. Here’s a cheat sheet for both:

 

Point 1 Designers

Setup is quick and easy.
Your "table" at an online marketplace is easy to set up - your products are immediately on display and people can browse and buy straight away. No need to know how to build a site, or set up a payment processing system - everything is there for you.


Traffic
Team HP works day and night to promote their marketplace, and the businesses selling through them. They write blogs, are ever-present on social media, attend events, and keep up to date with what you guys are up to. You benefit from their sizeable website traffic and marketing efforts. However, as with a physical market, the onus is on you as the designer to promote your brand.

Remember, if people don’t know your store is there, they aren't going to buy from it.


Strength in numbers
Just as small shops like being next to big shops in a mall because of the spillover traffic, the same principle applies to stores on Hello Pretty. A shopper may come to the site looking for one thing, but while they’re browsing, they will come across other things they like - hopefully yours! There's something counter-intuitive to remember: other stores are not competition - they are helping you by bringing feet through the door.


Your brand stays your brand
Hello Pretty has their brand, and you have yours. They will never tell you how to run your brand. You get to reap the benefit of the Hello Pretty brand, while maintaining your own identity. However, they're always on hand with advice when you need it.


Choose your own pricing
Want to price your MacGyver themed mugs at R10 000? Go for it. (Although, they'll probably sell better at a lower price.) Hello Pretty won't ever prescribe your pricing or policies - but they’ll gladly help you figure things out if you aren't sure.


Keep your stock & maximise your profit margins
Hello Pretty doesn't keep any stock, and this will never change. Even if they wanted to they couldn’t, as there are so many stores! They exist as a platform for you to sell your things, and not to sell them themselves. So, you get to keep control of everything in your shop, including managing your own stock.

The upshot of is this that you don't have to sell your hard work at wholesale prices, or hand it over on consignment - your products should be listed at their recommended retail price on Hello Pretty.









 



Point 2 Shoppers

Spoilt for choice
You get to browse over 11 000 products and have them delivered to you! The future is here, and it’s pretty awesome.

If you're struggling to find what you're looking for you, want something custom made or have a question, you should contact the team. Be sure to give as much detail as possible - telling the team you want to buy a silver ring you saw isn't going to be helpful, because there are hundreds of silver rings on the site. Rather say something like that you're looking for a silver ring with a little bow, or a thick-band silver ring with a ruby gem.

Little Bear Brooch Origami Range - Little Rabbits Mr. Pusskins the Persian Kitty Boskke Mini Ceramic Hold my Heart Gift Card Set

Stores are run independently
Every store is run by the designer themselves. This means that your order will be handled and fulfilled directly by the designer. You're buying your goods straight from the source, and supporting South African businesses while you’re at it. So, if you have any specific queries then they're who you should contact.


Prices and shipping costs are set independently by the designers themselves
Hello Pretty runs the infrastructure, but doesn’t prescribe pricing or policies. While they can help you source an item, they can't give you discounts for purchasing more than one item, or send all your items in one go when you're buying from a few different designers at once. Much like a physical market (eg the Neighbourgoods market), when you buy from several different stalls, you have to pay each stall individually.

Having said all of this, Hello Pretty does facilitate wholesale orders and if you're looking to place a wholesale order, you should drop them a line.


Each store's goods are checked out separately
As above, when you browse through a market, you pay every stall you buy something from. You don’t take what you want and then go and pay the owners of the market. The same principle applies with Hello Pretty. If you have several items from different stores, you will have to pay the piper (or the store owners) individually.

 

 

Point 1 Meet your friendly marketplace elves

Another way to illustrate the comparison is by explaining the different roles. Just like in a physical market, or even a shopping centre, there’s a team of people behind the scenes making sure everything runs smoothly. Here’s the Hello Pretty team:

Scott Hadfield

Scott the web developer is the building and maintenance guy. Lights, plumbing, electricity - he takes care of all that. He’s responsible for the backend of the site, and building all of the nifty features.

You never think about where all the tables, lights, plug points and so on come from in a regular market, and it’s the same with the site. Things are just there, and they work! Or if they don’t, he shows up with a toolbelt and lumberjack shirt (he is Canadian) and fixes things.

Samantha Marx

Sam the designer is the talented and artsy person that created the branding, designed the banners and flyers for the market, and makes sure the whole shebang looks attractive. The beautifully designed Hello Pretty website? The Facebook banners? The neatly laid out help pages? That’s her.

She is the one making sure that all things Hello Pretty look, well, pretty.

While the idea of an online marketplace is nothing new, it’s still unusual to a lot of South Africans who are used to buying from online stores (such as Yuppiechef or Takealot). Since a marketplace eliminates a lot of the logistics that limit online stores, Hello Pretty can offer you many thousands of great products from hundreds of highly talented, and often internationally sought-after, South African designers.

And you can buy in your PJs - something which markets have sadly yet to allow.

 

Posted by Menno on 11 Aug 2014

Menno is an engineer by day, launches side projects by night and travels in between. He is often described as "intense". Read his blog at http://www.mennogazendam.com or follow @mennogazendam on twitter.