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Online Marketplaces Help Small Businesses Reach Customers and Succeed this Holiday Season

The holiday shopping season is in full swing, and experts predict shoppers will spend more than $220 billion shopping online between November 1 and December 31. Holiday shopping is critical for small businesses, as 75% of small sellers rely on holiday sales to reach their annual goals. With so much at stake for small sellers, online marketplaces from companies like Amazon, Walmart, Etsy, Target, and eBay are powerful tools for small businesses to expand their reach, find customers, and boost sales. 

Marketplaces Help Small Sellers Expand Their Reach 

Regardless of where the products are sold, sellers must get them in front of customers. Traditionally, brick-and-mortar retailers relied on foot traffic and advertising in their local paper to reach potential customers in their immediate area. Today, sellers can use online marketplaces to reach a vast online customer base, extending their reach beyond their local physical locations. 

While brick-and-mortar retail and wholesale are still the most popular sales methods among small sellers, more and more sellers are turning to online sales methods, with 68% selling on online marketplaces. For rural sellers, where their local customer base is extremely limited, online marketplaces help small sellers reach millions of customers worldwide. More than 55% of rural sellers sell on online marketplaces, and more than 60% of those selling on Amazon also sell on at least one other online marketplace.

Online Marketplace Benefits Over Online Storefronts 

While all e-commerce sales methods allow sellers to reach a global customer base, it can be difficult and expensive to develop and maintain a website, and there is still the problem of finding customers and getting them to your website. 

Online marketplaces receive millions of visitors daily, and provide user-friendly tools to create and manage online storefronts with ease. They also empower small businesses with advanced marketing and promotional tools, offering capabilities such as targeted advertising, product promos, and customer engagement strategies that may otherwise be too challenging and expensive for small businesses to implement on their own.

In addition to helping sellers with their digital storefronts and offering sophisticated marketing tools, online marketplaces offer integrated inventory management services that simplify the process of tracking and fulfilling orders. This automation reduces the burden on small businesses and allows them to focus on core business operations, like developing great products. 

Economic Impact of Online Marketplaces on Small Businesses and Local Communities 

The online marketplace is a boon for the U.S. economy, small sellers, and local communities. Studies show that nearly all shoppers (96%) use at least one online marketplace, and consumers globally spend nearly $2 trillion on online marketplaces annually. The value to U.S. small sellers is amazing, with an approximate gain of $145.1 billion in annual economic value from online marketplaces, including $59 billion in value from the ability to access more customers and $7.6 billion in savings related to start-up or expansion costs.

The value online marketplace provides small sellers translates to increased revenue, growth, job creation, and overall economic growth.

Policy Considerations Impacting Online Marketplaces 

State and federal policymakers can expand online marketplaces’ value and economic impact by supporting policies that encourage online marketplace growth and development by providing funding to promote digital literacy and training programs to help small businesses fully utilize online marketplaces.

In addition, policymakers have to consider the global implications of new laws or regulations that touch the digital economy. Like many other industries, U.S. online marketplaces face stiff competition from overseas marketplaces. Chinese firms like Shein and Temu aggressively recruit U.S. sellers and offer deep discounts to woo sellers to their new marketplace platforms

Overregulating U.S. online marketplaces will provide a huge advantage to Chinese marketplaces like Shein and Temu, which do not always compete fairly on issues like intellectual property and consumer protection and cannot provide the samelevel of service as U.S. marketplaces. 

Small Businesses Thriving on Online Marketplaces

Sweet Water Decor (Pittsburg, PA) 

Founded by Melissa Horvath, Sweet Water Decor sells candles, mugs, and soap dispensers on Amazon, Etsy, Macy’s, and on their web store. Melissa uses Fulfillment by Amazon (FBA) to cut down on packing, labeling, and shipping costs while opening her business to millions of Prime shoppers. Since launching the company in 2014, Melissa has sold more than one million candles online, and sales continue to blossom. 

QRxLabs (Miami, FL)

Alexander Fedorowicz, founder of  QRxLabs, sells their serums and exfoliants on Amazon,, and their online store, successfully leveraging digital advertising and online marketplaces to reach customers nationwide. FBA has proven to be a game-changer, significantly reducing warehousing, shipping, and delivery costs, allowing Alexander to invest more time and money into creating newer, more exciting products for his customers.

ASM Games  (San Francisco, CA)

Alfred Mai started his tabletop gaming company after being disappointed with the lack of fun card games available. Alfred and his wife created their own games and started selling them on Amazon’s marketplace, using Amazon’s low-cost fulfillment program to pack and ship all their products and sell them on Amazon Prime. Today, Alfred’s card games are flying off the digital shelves.

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