There seems to be a small boon with starting online marketplaces these days, often with established retailers adding the ability for third-party sellers to add their products to their current online presence.
But true startups, those build from the ground up to be different, not just an integration with a solutions provider like Mirakl, are rarer.
What you need to know: A new marketplace in the UK is trying to take on the likes of eBay, Etsy, Amazon, and OnBuy by differentiating itself to work solely with UK-registered businesses.
The UK Marketplace, yes, that is its name, or UKM for short, launched publically this month, claiming to have 70 professional sellers with more than 40,000 products active on its platform.
In addition, UKM claims that it has more than 30,000 pre-registered users ready to download the app and an extensive and growing Facebook Marketplace “Buy/Sell Group” network, with over 52,000 active members and 5,000 new listings per month.
What they said: “After months of building and beta testing, we are hugely excited to finally launch UKM to the public and can’t wait to see their response,” noted Martin Saxon, a spokesperson for UKM.
“Our aim with UKM is to create the leading one-stop go-to place for almost anything UK-related while helping our customers to reach a broad global audience for the smallest possible fees.
“By integrating social media-style interactions – buyers will be able to ‘follow’ the sellers they are most impressed with or interested in – we are endeavoring to create a sense of community as well as a simple selling platform.
“One where sellers can really get to know their buyers, and buyers can purchase with confidence.
“[O]ur intuitive interface and state of the art seller control panel with a sophisticated sales report tool means that literally anyone in the UK can quickly and easily sell their products and track their sales.”
How it works: The marketplace can be used by both personal and business sellers, which makes it similar to eBay. There are no insertion fees and subscription fees to list an item on UKM.
However, personal sellers are limited to “local sales” as payments cannot be processed on the marketplace and must be made in person (cash). This reduces the personal seller account to a classified-only type of account.
UKM will collect a 5% final value commission on all sales, with Stripe being the payment processor for all online transactions by business sellers (Stripe fees will apply).
Similar to eBay, UKM does not allow communications or sales outside of its platform; requires that orders are sent quickly (delivered in the UK within four business days – some exceptions apply); places a premium on fast communications with buyers (within 24 hours); and has a feedback system for products and sellers.
However, unlike eBay, Etsy, or Amazon, there does not seem to be a platform-run complaint mechanism for disputes and fraud. UKM specifically mentions that problems must be solved through UK standard consumer protection laws and processes.
In addition, UKM has no phone or live chat customer service support, and only offers a ticket-based email address at firstname.lastname@example.org.
How British Centric is UK Marketplace?
As mentioned earlier, one of the key differentiators for UKM is that it requires sellers and products to be physically located in the UK, but orders can be shipped globally.
UKM feels the UK-centric approach discourages the “fight to the bottom” pricing structure frequently seen on other marketplaces that allow sellers to be located in low-cost producing countries such as China, undercutting quality and price from domestic sellers and manufacturers.
But there is a catch. This does not mean the products listed must be produced in the UK.
The company’s terms require the seller of record must be located in the UK, the inventory must be in the UK at the time of sale, and dropshipping is allowed. This provides a convenient loophole for Direct-to-Consumer (DTC) brands or foreign manufacturers to list products on UKM through a UK-based intermediary and third-party fulfillment (3PL) warehouse.
Amazon’s marketplace is full of Chinese brands using the “made in China, sold on Amazon” business model, where Amazon is the “domestic” fulfillment warehouse with companies using a “domestic” intermediary to act as their sales contact, customer support, and product service center.
By the terms of UKM’s selling policies, that would be allowed on its marketplace as well, except that they are not the fulfillment operator.
UKM location: While UKM’s homepage says “Proudly British,” the company behind the UK-centric marketplace is UK Marketplace FZC LLC, located in the United Arab Emirates (UAE).
Additionally, launches like this often include a quote from a company founder, CEO, or other principal, but in this case, the press release only quotes a PR person.
The site is hosted on UK servers, and UKM says it follows all UK and European regulations.
It even warns that some contract services are located or provided by US companies, meaning some personal data storage is subject to US laws.
However, UKM should be a bit more transparent about its ownership. It could simply be an ex-pat living in the UAE, and that is okay.
There is an aura of trying to conceal who is behind the venture, which may discourage some business sellers to give the marketplace a shot.
The bottom line: This is an interesting venture, and the website looks and feels professional, responsive, and easy to navigate. It appears UKM will expand the marketplace to include services, vehicles, property and jobs soon.
There are no integrations with marketplace facilitators or other ecommerce multi-channel solutions to help business sellers list products on the platform quickly.
PayPal seems to be missing as a payment option as well. UKM uses Stripe to process payments, and business sellers must have or open a Stripe account, which will incur payment processing fees in addition to the 5% commission.
The fee comparison table with other online marketplaces in its FAQ has some accuracy issues because fees on other marketplaces often fluctuate between categories and may include payments processing as well as seller protections.
In that sense, UKM is simpler, the same commission fee applies to all categories currently, but business sellers will have to deal with Stripe directly on any disputes.
Building an online marketplace from scratch takes time to get to vibrancy, meaning a transaction volume with enough buyers and sellers to become an active community resulting in frequent sales.
But everyone has to start somewhere.
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