The market for providing e-commerce services to established and new retailers who want to sell on third-party marketplace sites such as eBay is burgeoning. In the future, says Bill Tait, CEO and founder of Mercantec Inc., the web retailing market can expect new vendor and business alliances that will in turn offer merchants several new turnkey packages. "The vendor market is beginning to meet in the middle," says Tait, a veteran e-commerce technology and business start-up executive. "Companies used to operate in silos, but now it makes sense to partner with others to capitalize on the new business opportunities these third-party marketplace sites are generating."
A recent Forrester Research Inc. study estimates that online third-party marketplace revenue will reach $28.2 billion in 2004, up from $12.9 billion in 2002. It is expected to grow to $54.3 billion and will account for 27% of e-commerce sales by 2007, Forrester says.
With such a lucrative new market at stake, Tait says e-commerce technology vendors are looking to build marketing alliances with other companies offering different expertise rather than building a new program entirely in-house. Mercantec, for instance, is introducing PowerCommerce 2005, a suite of storefront applications that includes tools for selling directly on third-party sites. The program, which includes integrated site and store builder applications, lets users register shoppers, track inventory, create content and manage online coupon programs. It also features several third-party marketplace tools. A new marketplace manager function lets a merchant operate a new storefront or link an existing store site directly to eBay.
Mercantec is building the storefront technology, but is teaming with Lightbridge Inc., an analytics and e-commerce technology firm, which operates Authorize.Net, a payments processing and gateway service, to offer merchants payments processing options, including a gateway to PayPal, the payments arm of eBay.
"In the past most companies would have gone at the market with their own in-house program, but merchants want more turnkey solutions," Tait says. "The market is meeting in the middle because storefront builders are teaming up with the marketplace sites and companies with a specific expertise to offer retailers a turnkey system now rather than later."