Canadian consumers who frequently purchase online indicate their favourite places to do so are online marketplaces, according to a recent survey by GetApp. Fifty-nine percent of Canadians surveyed said they shop online markeplaces often, and another 29 percent said they shop there sometimes.
Websites are important too, with 21 percent of Canadians often making their purchases on the vendor’s or brand’s website, and 45 percent saying they sometimes do so. Having a website to support and grow online sales is critical, even if it isn’t the final point of purchase.
Social media shopping is still catching on in Canada. Eighteen percent shop on social media often and 20 percent make purchases sometimes.
Auction sites like eBay have fallen out of favour for online shopping in Canada, with only 10 percent saying they shop there often. Second-hand online marketplaces (like Kijiji) perform slightly better, with 12 percent purchasing there often and 30 percent shopping there sometimes.
Other recent surveys have also indicated Canadian enthusiasm for online marketplaces. Twenty-seven percent of Canadian adults, or an estimated 8.2 million people, planned to shop this year’s Amazon Prime Day sales (up from 24 percent in 2021), according to Finder’s Amazon Prime Day Shopping Report. Thirty-five percent of Canadians aged 18-34 planned to shop Prime Day sales.
The most popular product category was makeup and skincare, followed by products for the home and clothing/accessories.
It’s becoming more and more critical that your products be available in online marketplaces. The pandemic has accelerated digital adoption in Canada, including direct to consumer (DTC) sales via online marketplaces. 1.3 million new sellers joined Amazon in 2020 (3,438 per day), according to a 2021 ecommerce trends report published by Divante.
“The figure equals 3,734 sellers per day, or 155 per hour and two every minute. Based on the current onboarding rate, 1.4 million new [Canadian] sellers will potentially have joined the platform by the end of the year,” says Finbold in their data analysis.
The holiday season is expected to bring more of the same in Canada.
“…in most gift categories, online shopping has become the default, and Dentsu says brands need to be optimizing their presence with online retailers, even if they don’t end up buying there: more than half of consumers will look at sites like Amazon for inspiration, where they may also consider purchasing generic brands,” says a recent Strategy article.
Can Small Businesses Afford to Sell on Marketplaces?
The vast majority of Canadian third-party sellers on Amazon are small-medium-sized businesses. In spite of growing fees and challenges, Canadian sellers remain profitable. While it does take time and effort, 57 percent spend fewer than 20 hours each week selling through online marketplaces, and 13 percent spend just over 30 minutes each day.
- Almost 4000 Canadian sellers broke six figures on the marketplace last year.
- 240 Canadian sellers surpassed $1 million (USD) for the first time.
- In total, the number of sellers who surpassed $1 million grew by over 38 percent.
- More than half of Canadian sellers use Fulfillment by Amazon (FBA), selling close to 110 million products.
But how much did it cost to generate those sales?
Marketplaces are still the least expensive way to start selling online. In fact, 32 percent of the most successful Amazon sellers surveyed spent $0-500 USD to start their business and they’re still going strong over five years later.
While there is no such thing as a typical online income, these actual experiences reported by current Amazon sellers will provide you with a reasonably good idea of the cost.
- Sixty percent of active sellers spent less than $5,000 USD to get started on Amazon, and 29 percent spent less than $1,000.
- 17% of Amazon sellers spent less than $500
- 12% invested $500-1,000
- 13% spent $1,001-2,500
- 18% invested $2,501-5,000
- 21% spent $5,001-10,000
- 21% invested over $10,000
The cost of starting an Amazon business in Canada will vary due to other factors as well, including how well you choose your products. In short, you’ll want to select products that are proven sellers with low competition and great margins. Read How to Choose the Best Products to Sell Online in Canada for product pointers.
There are several product research tools out there to help you with the first stage of your evaluation, while also ensuring future profitability. Jungle Scout is one of the most popular Amazon selling tools, providing a product database, supplier database, product tracker, keyword scout, sales analytics and an inventory manager. The functionality and data are invaluable, as you select and manage your products.
Successful sellers don’t necessarily spend a lot of time on their Amazon businesses. Fifty-seven percent spend fewer than 20 hours each week doing so, and thirteen percent spend just over 30 minutes each day.
The learning curve for selling on online marketplaces is manageable by most, or you can hire an expert to help. It’s a great way to start an online business journey and continuously grow through ecommerce direct sales. You’re not stuck with Amazon, there are a number of Online Marketplaces for Canadian Sellers.
Do you have any questions about selling products to Canadian consumers through online marketplaces? Please comment below or join us in the Online Business Canada Facebook group.
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Melody McKinnon's formal education is in business management, which she enhanced with more than 60 certifications revolving around business, marketing, health, general sciences and writing. In 25 years of working online, she has owned or managed both educational and ecommerce websites. Her book, 7 Recession Proof Online Businesses to Start From Home, is available on Amazon.
Melody has worked with many businesses & brands in a multitude of capacities. She can often be found on CanadiansInternet.com, CanadianFamily.net and AllNaturalPetCare.com, as well as other quality digital publications. Her content has earned reference links from highly-respected websites, magazines and university textbooks.