When considering multichannel selling, one avenue worth exploring is the utilization of an ecommerce aggregator—a type of channel aggregator.
While the term may initially appear daunting, its concept is likely familiar to you, as it’s a fundamental aspect of online commerce with various applications already in use.
Transportation aggregators like Uber, food delivery aggregators such as Grubhub, short-term rental aggregators like Airbnb, news aggregators such as Flipboard, and content aggregators like Feedly are just a few examples of the diverse range of aggregators currently in operation.
An ecommerce aggregator functions similarly to these models but focuses on products sold online.
If you’re seeking to expand your market presence without significantly increasing expenditures on marketing, operations, or online infrastructure, leveraging an ecommerce aggregator could prove to be an effective strategy.
This article will delve into every aspect of ecommerce aggregators, addressing questions such as: What exactly are they? How do they operate? What are their advantages and disadvantages? What benefits do they offer? Can you provide examples of existing ecommerce aggregators? How do they differ from established marketplaces like Amazon and eBay?
By the conclusion of this exploration, you’ll have gained comprehensive insight into the world of ecommerce aggregators, empowering you to make an informed decision regarding the suitability of an aggregator business model for your online store.
What constitutes an ecommerce aggregator?
Think of an ecommerce aggregator as an internet-based rendition of a large retail chain. Operating under a singular brand, it offers products sourced from numerous merchants utilizing its proprietary platform, business procedures, and customer service infrastructure.
A derivative of the aggregator model is referred to as multichannel listing software, also known as multichannel retail software or multichannel ecommerce software. These software solutions enable you to upload your product listings, which are then disseminated across various online marketplaces such as Amazon, eBay, and Walmart.
You can streamline this process directly from your WooCommerce site. This approach reduces unnecessary steps and offers enhanced control over your online presence. Consider utilizing extensions like Amazon for WooCommerce and eBay Integration for WooCommerce to facilitate this integration seamlessly.
Aggregators and listing software can significantly boost brand visibility by virtue of the sheer volume of products available on their platforms, as well as their established online infrastructure and operational workflows.
Types of Ecommerce Aggregators
When embarking on your search for an ecommerce aggregator, you’ll typically encounter three main types:
1. Rollup Aggregator Companies:
Rollup aggregators specialize in acquiring successful small- and medium-sized ecommerce businesses. These entities accumulate a diverse range of products from multiple brands within their targeted industries and market them through their own platforms or established marketplaces like Walmart Marketplace.
Choosing to sell to a rollup aggregator is a viable option for entrepreneurs seeking to transition to their next venture. By selling their business to an aggregator, they can obtain the necessary capital to pursue new ideas without being overwhelmed by the demands of their current business.
2. Comparison Shopping Platforms:
Another category of ecommerce aggregator comprises comparison shopping websites like Shopzilla or Bizrate. These platforms offer varying degrees of usability and functionality. Typically, they direct customers to your online store to complete their purchases.
While leveraging these platforms can significantly expand your audience reach beyond your ecommerce store, it also exposes you to heightened competition. We’ll delve into the pros and cons of aggregator platforms later in this discussion.
3. Multichannel Listing Software:
Multichannel listing software, also known as multichannel retail software, represents a third type of ecommerce aggregator. This software solution empowers you to upload your entire product inventory, after which it automatically lists them for sale across multiple online marketplaces.
Utilizing multichannel ecommerce software streamlines brand visibility across various channels using online tools, eliminating the need to set up and manage multiple accounts individually.
Understanding Aggregator Operations
The functioning of aggregators varies depending on the type of aggregator you engage with.
For rollup-style aggregators, the process typically involves evaluating your company’s worth, establishing a valuation, and negotiating the terms of sale, including multiples.
In the case of comparison aggregators, your ecommerce brand enters into a partnership agreement with the aggregator. This contract outlines various aspects such as terms, quality standards, commissions, product availability, and other pertinent details.
Subsequently, the aggregator markets your products across multiple channels and earns commissions for each sale, akin to an online marketplace. Some aggregators may employ alternative revenue models, such as the pay-per-click model utilized by price comparison platforms.
You might be required to provide a minimum price for your products, following which the aggregator sets prices for customers, occasionally adjusting them based on factors like seasonal variations, special promotions, or other considerations.
Choosing an aggregator employing this pricing strategy can help avoid being drawn into a price competition, which is a potential risk when listing products on price comparison platforms. Ideally, you aim to differentiate your offerings beyond mere pricing. However, the trade-off of increased traffic and sales volumes for narrower profit margins may prove advantageous in certain scenarios.
Multichannel retail software typically adopts a straightforward monthly pricing structure, akin to many other software services. These platforms facilitate the listing of your products across various channels and marketplaces, thereby generating increased revenue.
If you’re already leveraging WooCommerce for its independence—such as full ownership of your business and website, absence of transaction fees, and no monthly service charges—you might find it advantageous to utilize WooCommerce as your preferred multichannel retail software.
The Functionality of a Channel Aggregator in Multichannel Selling
The involvement of a channel aggregator in your multichannel selling efforts can significantly alleviate the responsibilities associated with tasks such as payment processing, order fulfillment, and customer service, contingent upon the specific platform and software you opt for. The level of support provided varies depending on the type of aggregator you engage with.
By leveraging these services, the chances of your products being found and bought online are substantially heightened. Moreover, they streamline the shopping experience for customers by eliminating the need to visit multiple websites when comparing products.
Advantages of Utilizing an Ecommerce Aggregator
For rollup-style ecommerce aggregators, the primary advantage lies in the opportunity to sell your business—a rewarding outcome for the effort invested in nurturing your small business into a profitable enterprise.
For entrepreneurs who are not inclined to sell or whose business hasn’t reached that stage yet, here are the key benefits associated with utilizing other types of aggregators and multichannel software:
Increased Traffic
By leveraging a price comparison website or expanding product visibility on marketplaces, the aggregator model facilitates the attraction of more online traffic. This heightened exposure ensures that a larger pool of active buyers encounters and considers your products.
Enhanced Revenue
Greater traffic typically translates into augmented revenue. Moreover, if you’re able to capture the contact details of these customers and your agreement terms permit, you can continue marketing to them. This approach enables the conversion of one-time customers into sources of recurrent and sustained revenue.
Streamlined Integration with Online Marketplaces
Both ecommerce aggregators and multichannel retail software significantly expedite the process of selling on platforms like Amazon, Walmart, eBay, Alibaba, among others. Typically, setting up accounts, crafting product pages, and synchronizing inventory across each marketplace can be time-consuming. However, with aggregators and software, these tasks are accelerated significantly once you upload your products, images, and other pertinent information.
Centralized Off-site Management
Aggregators alleviate the responsibility of managing various technological aspects, allowing you to concentrate on product development, marketing, inventory management, and other pursuits. This proves invaluable if you find yourself constantly overwhelmed by the demands of technology management. With someone else handling the technical intricacies of online selling, you’re free to focus on core business operations.
Accurate Data Insights
Many online marketplaces and aggregator platforms offer robust data analytics capabilities, meticulously monitoring and measuring various metrics. This provides valuable insights into the performance of your products, pricing strategies, and promotional offers, as well as shopper behavior. While such insights are also available on your ecommerce website, relying solely on aggregators and multichannel ecommerce software can often yield superior data without the need for extensive manual effort on your part.
Distinguishing Between an Aggregator and a Marketplace
It’s understandable to confuse aggregators with marketplaces due to their similar functions.
Both aggregators and marketplaces facilitate the sale of products from multiple vendors, allowing customers to shop and compare various brands and prices. However, several key differences set them apart.
Product Ownership:
Online marketplaces serve primarily as platforms and do not possess ownership of the products they facilitate sales for. They typically generate revenue through a percentage of the sale price, alongside other fees.
Conversely, ecommerce aggregators may possess ownership of various brands through collaborative agreements with sellers. This is particularly common if a seller opts to sell their business to an aggregator, which then includes their products among others in their portfolio.
Product Fulfillment:
Online marketplaces commonly do not engage in product fulfillment or shipping. Upon a customer’s order placement on their website, the seller assumes responsibility for order fulfillment.
However, aggregators, who have acquired ownership of products either through purchase or agreement, often undertake fulfillment responsibilities as well.
Product Quality:
Ecommerce aggregators typically uphold stringent standards for product quality and customer service. Not all online sellers are eligible for inclusion by an aggregator.
Conversely, the majority of marketplaces have less stringent requirements for product quality. While platforms like Amazon Marketplace aim to monitor and address issues such as scams and poor product reviews, there isn’t a prerequisite for certain quality standards upon account creation.
Pricing:
Marketplaces exhibit a wide range of pricing across various product categories, encompassing both budget-friendly and premium options.
In contrast, pricing on ecommerce aggregators tends to display less variation due to elevated quality standards and a more limited selection of competing products.
Product Variety:
Marketplaces boast an extensive array of product offerings, reflecting virtually limitless diversity across various categories.
However, ecommerce aggregators often curate a narrower selection of products, as many aggregator companies opt to specialize in specific industries or verticals.
Advantages and disadvantages of ecommerce aggregators
You might believe that collaborating with an ecommerce aggregator or marketplace integrator would benefit your business. However, it’s crucial to gain deeper insights.
Below, you’ll find a breakdown of the pros and cons associated with the ecommerce aggregator business model:
The Advantages
Enhanced product exposure
Ecommerce aggregators and multichannel listing software significantly amplify the visibility of your products, a feat that might have taken years to accomplish with just one ecommerce website. Through aggregation, you can tap into a broader audience, attracting new customers and accessing untapped markets that would have otherwise remained out of reach. This is particularly evident in the realm of international sales. Therefore, if maximizing sales volume is a key objective for your business, leveraging aggregators presents a significant advantage.
Quality assurance through association
For ecommerce aggregators that uphold stringent quality standards for the products they feature, your inclusion provides an immediate boost to credibility, alleviating the need to establish trust from scratch. By being present on such platforms, you can assert that your product has undergone rigorous vetting and adheres to a higher standard than those found on typical marketplace platforms.
Reduced technological overhead
Enjoying increased exposure across multiple channels doesn’t entail shouldering the full burden of managing the associated technology and logistics. Other companies, equipped with specialized teams, handle the intricacies of online selling technology. Consequently, you can generate more revenue without significantly increasing your workload.
Amplified marketing efforts at minimal cost
Similarly, by partnering with ecommerce aggregators boasting their own marketing capabilities and advanced SEO tools, you benefit from enhanced marketing exposure without incurring additional expenses. These aggregators possess established methods for attracting and converting online traffic into paying customers, offering a substantial advantage without the need for extra marketing expenditure.
This constitutes a significant benefit of utilizing multichannel listing software. In exchange for a monthly fee, your products are listed on major marketplaces, while the existing infrastructure handles much of the marketing and product promotion on your behalf.
The Disadvantages
Erosion of brand differentiation
Maintaining your own ecommerce store allows you the freedom to craft a unique brand identity and personality. However, this becomes more challenging when collaborating with or selling to an ecommerce aggregator or utilizing multichannel retail software.
Furthermore, you forfeit the opportunity to infuse personalized and genuine customer support, packaging, follow-up, and other brand-defining elements that may hold significant importance to you.
Increased direct competition
While utilizing ecommerce aggregators and software may boost sales volume, it may not necessarily lead to a proportional increase in profits. The abundance of competing products on these platforms, coupled with consumers’ tendency to prioritize the lowest price, can result in shrinking margins and declining profits.
If maximizing profits takes precedence over sales volume for your business, leveraging aggregators may not align with your objectives.
Your product listings are positioned alongside competing ones, and the marketplaces utilized by your listing software and certain aggregators may prioritize promoting other products over yours if it serves their interests. Their primary motivation is to facilitate sales and earn commissions, without the same level of concern for your business’s success as you have.
Diminished control and autonomy
The notion of “owned media” underscores the importance of having full control over your online presence. With your ecommerce website, particularly if you’re utilizing platforms like WooCommerce rather than proprietary ones like Wix or Shopify, you retain ownership of every aspect—from the URL and design to product pages and copy. This ownership ensures that you have the ultimate authority, as only you can decide to deactivate it.
Once again, this is a key advantage of using WooCommerce—you possess complete ownership.
However, when engaging with ecommerce aggregators, listing software, and marketplaces, you relinquish some of this autonomy. These platforms reserve the right to close your account, modify their terms of service, increase fees, adjust shipping procedures, impose new requirements that may not align with your interests, restrict certain products, control your customer data, and more.
On these external sites, you don’t have ownership over your content or your presence, presenting a significant risk associated with using ecommerce aggregators.
This underscores the core principle of multichannel selling: it’s essential to sell through channels where you retain full control. The only exception to this rule is if you opt to sell to a rollup-style ecommerce aggregator. In this scenario, you willingly surrender control of your business in exchange for a financial windfall, which is considered a victory in itself.
What if I prefer not to engage with channel aggregators?
Interestingly, even if you have no interest in collaborating with ecommerce aggregators, there are other types of aggregators that could still benefit your business.
For instance, did you know about shipping aggregators? These platforms can be advantageous for you as a customer, allowing you to compare prices and service options from a range of carriers.
Here are some well-known shipping aggregators:
- Shiprocket: Provides multiple carrier options across numerous countries.
- Shippo: Another international shipping aggregator offering services with over 85 carriers.
- Pickrr: Collaborates with over 30 carriers and utilizes AI among other tools.
Whether you’re shipping internationally or operating within a single country, these services are worth exploring. They may enable you to save money and enhance various aspects of your business, such as supply chain management, customer experience, order management, and more, through the diverse carrier options and additional tools they offer.
Top Ecommerce Channel Aggregators:
To provide an overview of available options, let’s explore a few examples. Starting with a comprehensive list of over 70 ecommerce aggregators can serve as a useful reference point for future research.
Firstly, let’s delve into some rollup-style ecommerce aggregators—companies that acquire ecommerce businesses and integrate their products into their offerings:
Thrasio:
Thrasio focuses on selling products across industries such as home, fitness, kids, outdoor, and cleaning supplies. They possess a well-established brand and follow a rigorous evaluation process for small businesses interested in selling.
Unybrands:
Another player in the ecommerce business acquisition space, Unybrands offers attractive deals for companies seeking to sell.
Mensa:
Mensa acquires companies while allowing their brands to thrive post-sale. They assist small business owners in continuing to benefit from the ongoing growth of their former companies.
SellerX:
Specializing in Amazon-based businesses, SellerX‘s focus lies more on the marketplace utilized rather than specific industries.
Moving on, let’s explore a couple of aggregators that collaborate with businesses aiming to expand their reach through the aggregator model:
Growve:
Growve concentrates on ecommerce industries related to beauty and personal care, active nutrition, and dietary supplements. They are actively seeking acquisitions and partnerships through their Growve Marketplace Agency.
Perch:
Perch offers various engagement options, including brand acquisition, collaboration with existing brands, and affiliate marketing services.
Lastly, we have an example of a comparison shopping aggregator that operates within a specific industry:
Lyst:
Lyst specializes in the clothing industry. Serving as a shopping site with its own brand, payment processes, customer support, and fulfillment, Lyst collaborates with multiple brands within the clothing sector.
How to Select the Right Channel Aggregator for Your Business:
If you’re considering this strategy for multichannel growth and expanding your market reach, here are three steps to help you choose the best aggregator for your needs:
Define Your Objectives:
Begin by clearly defining your goals. Are you interested in selling your business, partnering with an aggregator, maintaining autonomy while expanding your reach, maximizing sales volume, or safeguarding profit margins? Understanding your objectives will streamline the process of evaluating and selecting the most suitable aggregator.
Identify Aggregators that Match Your Requirements:
Consider options that align with your preferences and needs. Comparison sites and multichannel retail software options typically entail less commitment, as they do not require complex agreements or contracts compared to aggregators seeking business acquisitions or brand assimilation. Look for aggregators, platforms, or software solutions that cater to your industry, goals, and budget. Additionally, ensure you are aware of the time commitment associated with each option to avoid overextending yourself.
Choose Your Preferred Options:
Narrow down your initial list to one or a few choices that best fit your criteria. You may have the flexibility to work with multiple aggregators simultaneously. Keep in mind that while this approach offers one method to enter multichannel selling, you also have the option to independently open accounts with online marketplaces and manage them yourself.
