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How to build a Composable Catalog

Kilka Seller Case Study_Nov 2022
Published on April 21, 2023
Kilka Seller Case Study_Nov 2022

Your ideas about what marketplaces are is probably wrong

What you think about Marketplaces is probably wrong.  Or at least only partially right.  Most people when they think of Marketplaces immediately think of sites like Amazon, Etsy, and eBay. On these sites, the consumer experience is clearly a marketplace experience.  it is clear that the consumer is buying from a third party.  And while marketplace platforms can deliver these types of experiences, that model is only appropriate for some retailers.  

But there are still significant benefits of using marketplace strategies for merchants who do not want to create dedicated consumer-facing marketplaces.  All merchants can benefit from marketplace strategies, which provide an approach to generate additional revenue while minimizing inventory investment and risk.  Retailers capture additional sales by converting latent demand  for products in their existing customer base and audiences. 

Marketplace strategies allow merchants to increase revenue while controlling risks in two key ways.  First, they allow retailers to sell merchandise they do not currently own, capturing a portion of sale price.  The second way that marketplace strategies increase revenues is by giving them access to other sales channels selling on other retailers sites. With both approaches, retailers can drive increased revenue while reducing inventory risks. Particularly in the current economy, finding low investment revenue and adding additional sales channels can both make a significant difference.

In both approaches, merchants can use their existing systems and processes to capture this opportunity.  

How to build a Composable Catalog

Composable commerce is currently a popular strategy for combining best-of-breed commerce applications to deliver the right experience for your customers and your brand. The same philosophy can be applied to your product catalog and assortment.  

While not literally plugging together APIs, you can create a plug-and-play set of products pulled together from diverse sellers using different commerce and channel management systems.    A marketplace platform can allow you to seamlessly integrate your own first-party products with third-party commission-based and dropship products to augment your assortment, explore new categories, and increase revenue while managing inventory investment and risk.  This approach allows you to focus on attracting and converting customers without the investment required to deeply understand adjacent categories and tie up investments in inventory.

How you disclose your inventory strategy to your customers depends.. For some retailers, it is a dedicated marketplace or section of the website, for others it’s disclosing the seller information on the product details page, and for some it’s making it completely opaque to the consumer that a third party is involved.  The consumer-facing strategy is a separate decision from the inventory strategy and associated benefits.


How to be successful with a Composable Catalog approach 

Marketplace projects often get bogged down when they are envisioned as dramatically transforming how a merchant does business. A more scalable and successful strategy is when existing systems and processes are used across all types of products. Incorporating dropship and commission-based products into your existing merchandising and marketing efforts.  Aligning as much as possible with your current ways of working can lead to faster success providing a low-risk way to increase revenue while expanding your product assortment.

Here are some key considerations to keep in mind:

  1. Choose the right marketplace platform: A marketplace platform needs to be powerful and able to scale but ease of integration both technically and with business processes is critical. Marketplacer’s Commerce Accelerators and broad range of APIs and Webooks can make starting both as a seller and with a third-party inventory strategy on your site fast to launch.   
  2. Identify sellers who align with your site and your brand:  Finding sellers who can provide the quality of products and the level of service you require is key to efficiently launching a marketplace. Marketplacer’s Seller Community and Channel Management partners can help accelerate this critical process.  
  3. Expand your composable catalog overtime: The advantage of a composable catalog approach is that it can allow you to be agile with your assortment. Products and categories can move between commision-based, drop ship, and first-party strategies as you understand their potential. New categories can be added, new products can be tested, and winners can be optimized to maximize their return. 

In conclusion, marketplace strategies are not just for consumer-facing marketplaces like Amazon and eBay. All merchants can benefit from a composable catalog strategy that allows them to augment their product assortment and generate additional revenue with minimal risk. With the strategy, right platform, and seller base marketplace strategies can be a valuable addition to any merchant’s toolkit.

Published on: April 21, 2023

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