How to become a marketplace business

19/08/2021

Matt Purt and Chris Griffin acquired Secret Sales in 2019 with a view to launching a unique proposition for the fashion industry, intended to disrupt the non-full price product space. The relaunch brought a complete pivot of the business model and overhaul of technology, transforming the flash sales retailer into an advanced ecommerce marketplace platform for non-full price branded fashion. 

Ampersand managed the transition, which had an aggressive timeline and a complex trading strategy both at play. The first challenge was to get the initial implementation live in less than six months, in time for Black Friday. This was followed by a six-month period of “mixed” trading, with Ampersand’s solution supporting a hybrid flash sales/marketplace model. Secret Sales then relaunched as a 100% marketplace business in March 2020, facing into one of the most challenging trading environments in recent years. It was a bold decision to transform the business, but it’s certainly paid off.

“Fast forward 14 months, we’ve experienced hyper-growth as a business of 4,000%. We currently have 900,000 SKUs and over 700 brands on the platform. ”

Matt Purt, Owner & Director, Secret Sales

Screenshot of Secret Sales website

Following the success of the project, we thought we’d share some advice for retailers who want to grow and scale at pace and become a marketplace operator.

1. Think like a retailer, act like a marketplace

“Just because you don’t directly control the supply chain, doesn’t mean you shouldn’t think like a retailer.” Matt Purt, Owner & Director

Set yourself up internally to think like a retail business:

  • curate your inventory to avoid the endless aisle of irrelevant products commonly found on marketplace platforms
  • if you have a team buying inventory from multiple partners, be very selective about the ranges you sell
  • hand select every partner and work with them to make sure you best represent their brand on your platform

2. Integrate best-in-class technology and systems

Becoming a marketplace operator comes with a unique set of challenges and demands, which require strong and steady management from a specialist systems integrator. In the case of Secret Sales, the new business model demanded that their custom stack be retired. However, fundamental to the relaunch proposition, was retaining (and improving) their existing merchandising style, presenting and curating relevant products to their customers.

We achieved this by migrating them to a flexible, scalable ecommerce platform and integrating best-of-breed technology including a PIM, powerful merchandising capabilities and a marketplace system.

Matt points out that Secret Sales, “manages all of our customer, product and partner data using Ampersand’s proprietary integration platform. We then bolt-on best-in-class retail technology, which allows us to remain at the vanguard of their technology while enabling us to knit everything together and maintain our vision of how we want to curate products.”

Introducing new product management and data mastering processes in such a way has reduced Secret Sales’ operational costs dramatically, while relevant brand-based content and visual merchandising has enhanced the entire shopping experience.

“From the customer’s perspective, the front end journey hasn’t really changed, but the fulfilment model..operationally and commercially…it’s substantially different.”

Darryl Adie, CEO, Ampersand

3. Carefully manage third-party sellers

Partnerships vary from brand to brand, so expect to facilitate a range of onboarding times and processes for different sellers, there isn’t a “one-size-fits-all” approach here.

It’s also good to have in mind that you won’t be able to directly connect with every retailer. Matt advises, “Don’t let the number get in the way of good business.”

Going from a retail business where you’re buying and selling inventory, to a 100% non-stock marketplace requires a massive change in how you do business. Leverage the existing relationships that people in your business have and welcome new ones.

Finally, try and remove challenges and obstacles in your contract negotiations with sellers. It is not worth creating barriers like “exclusivity”, remain flexible to signing contracts with third parties on different terms.

4. Carefully manage the change in mindset

Becoming a marketplace store brings about significant operational change and affects every touchpoint; from managing warehouse, logistics and stock control; to marketing, merchandising and other front-end trading mechanisms. Merchandisers no longer own the product, they now rely on third-party partners to be their supply chain; picking, packing and shipping directly to consumers. It’s a complex set of challenges for tech and systems but also for your people.

“How you promote, how you trade and how you talk to customers must change. Beyond operations and technology, your people have to transition through a significant change in mindset and this has to be carefully managed.”

Matt Purt, Owner & Director

5. Keep true to the ethos of partnership culture

Your retailer-supplier relationships are now replaced with partnerships. Create dedicated teams with great people that already have good relationships in place to help facilitate that journey. Create some points of differentiation and value-adds to create better propositions for retailers and brands.

Choosing the right partner and platforms

Companies that consider building their own marketplace solution, quickly realise its complexity and their lack of in-house experience will significantly slow down their time-to-market. They need a marketplace platform – and a technology partner like Ampersand – to make the move to marketplace a successful one.

“Ampersand provided the flexibility and ability to work to aggressive demands in budget control and timeline management, we’ve been able to grow and scale at pace with phenomenal success.”

Matt Purt, Owner & Director

Thinking of becoming a marketplace operator? Check out our  Secret Sales case study or get in touch to tell us about your exciting transformation plans.