26Oct

Merchant Onboarding Challenges

Onboarding your merchants can be challenging as some merchants actually do not necessarily see the need to change, are too busy or even not interested in growing their business. Here are some challenges encountered and key takeout’s as to how to avoid and overcome the common pitfalls. 

Having worked with marketplace development with several business concepts before, I have noticed that a large part of the effort in developing a successful marketplace goes into efficiently onboarding the merchants or entrepreneurs. Once you have your marketplace technically set-up and have identified the relevant merchants to your marketplace, you also need to dedicate some time to successfully onboarding them. Without merchants and their listings, you do not actually have a marketplace! Here I have listed some of the challenges I’ve encountered over the years: 

  1. Old-ways Entrepreneurs If a merchant has had their business for decades, they might think the world is still the same as it was 15+ years ago. They may have a firm belief that e.g. a small standard ad in a local newspaper or on a local store noticeboard is the most efficient way to attract new clients (which in some cases it might be!) and are hesitant to try out anything new that they feel they are not fully in terms with. “What has worked before will work today” is a common phrase you would hear from these kinds of merchants. Someday, however, they may find themselves out of business, as they have not kept up-to-date with their competition, who have adopted more advanced marketing and sales mechanisms to their business. 
    • Key takeout: These kinds of merchants need education about the ways the world runs today. It means that a high level of trust is needed in order for them to feel comfortable about joining your marketplace. It may take some time to get them onboard, but once they have been convinced, they can become your marketplace’s most loyal partners and advocates.

  2. Too-busy Entrepreneurs Sometimes the merchant may be swamped with running their current business daily activities and while they are initially interested in trying out new ways of getting customers, they feel that there is always something more important that they need to attend to first. It can be challenging to get any of their time to set up a meeting, let alone to discuss upcoming business opportunities. 
    • Key takeout: See if there is scope for improvement in their business processes and offer to help them out as much as possible especially in the sign-up process. If needed, take out some of their workload e.g. by offering to pre-load their listings, writing up their company profile etc. Of course, you need to assess your own cost vs benefit ratio with each merchant separately as your time is also of value.
       
  3. Lifestyle Entrepreneurs In some cases the merchant already has a loyal customer base and hands full of orders (think of e.g. a hairdresser or masseuse) and they do not want to grow their business beyond themselves by employing more people. They do not see the need to get in new clients as their order books are full already. I call them ‘lifestyle entrepreneurs’, meaning that their job represents their lifestyle, and they are happy with the way things are and not interested in growing and actually making a real business out of it. 
    • Key takeout: You might demonstrate to them what kind of business opportunities they had if they wanted to grow their business, but since it is deep in these merchants’ values to live a certain kind of a lifestyle, it may not be advisable to dedicate too much time into convincing them to change their mind.
       
  4. Digital Savvy Entrepreneurs These are merchants that typically have built their business in the “Digital age” and are used to online marketing, familiar with tools like Google and Facebook as marketing channels, have a website and possibly have already got quite sophisticated tools in place. The challenge with these kind of entrepreneurs is that they may already have some or all of the things a marketplace might offer in their own little ecosystem.
    • Key Takeout: Convincing them isn’t the issue, they get digital, but convincing them you’re offering something that won’t cost them too much time, effort or money is key. However if the value proposition of your marketplace makes sense these could be the easiest type of merchant to convince.

What other types of merchants have you encountered? Drop us a line at info@dataridoo.com and let us know about your business idea! 

An industry expert with over 10 years of experience in running and developing online marketplaces, digital marketing, media and analytics in both privately-owned companies and global Top 500 companies.