September 7, 2011, 3:34 PM

Best Buy’s new online mall

The consumer electronics giant launches its online marketplace with items from eight retailers.

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Best Buy Co. today launched its first online marketplace, inviting e-retailers to list and sell items on BestBuy.com that the e-retailer doesn’t carry itself.

Best Buy did not immediately respond to questions about what it charges e-retailers to sell on the marketplace, but marketplace operators typically take a cut of sales processed through their sites and often charge a flat monthly listing fee.

Best Buy, No. 11 in Internet Retailer’s Top 500 Guide, says the marketplace will expand by some 33% the products available for sale via BestBuy.com in time for the holiday shopping season. Marketplace sellers are not allowed to sell the same products that BestBuy.com does.

John Thompson, senior vice president of Best Buy, says the online mall represents Best Buy’s response to consumer requests that it offer more products for sale. “Increased assortment of products, brands and price points is exactly what people have told us they want,” he says. “We listened, and developed marketplace to meet those unmet needs.”

With the launch, e-retailers have yet another marketplace option to consider. Amazon (No. 1 in the Top 500 Guide), Buy.com (No. 32), Sears (No. 7), Wal-Mart (No. 6) and eBay all offer e-retailers the option to list and sell products on their sites.

Scot Wingo, CEO of ChannelAdvisor, which helps online merchants work with search engines, comparison shopping sites and online marketplaces, says the growing number of marketplaces is good news for smaller e-retailers because the e-commerce sites of these big retailers draw consumer traffic that small retailers can’t generate themselves. “Retailers need to decide their marketplace strategy—which marketplaces will they partner with, which will they not?” he says.

Best Buy says it will vet e-retailers that want to sell on BestBuy.com against a set of standards, including how long the e-retailer has operated, its overall customer satisfaction rate, order cancellation history and back order history. Best Buy did not specify how it would measure those areas.

At launch the marketplace has eight participating e-retailers: Buy.com (No. 32), Wayfair.com (No. 51), BeachAudio.com (No. 413), CametaCamera.com (No. 899 in the Second 500 Guide) ANTonline.com, Mambate.com, SFplanet.com and ElectronicExpress.com.

With the exception of Wayfair.com, the participating retailers sell consumer electronics and related accessories similar to what BestBuy.com offers. “As an electronics retailer, there is some logic in the strategy to expand your current category before going into new categories,” Wingo says. “So given that and the Best Buy audience, I think it makes sense.”

Products detail pages for products sold by a marketplace seller feature a message that the products are sold and shipped by the outside retailer. Marketplace orders are not eligible for pick up at Best Buy stores or BestBuy.com’s ship-to-store program. Consumers who purchase marketplace products go through BestBuy.com’s regular checkout process and pay with a credit or debit card. PayPal, Best Buy gift cards and promotional codes are not accepted as payment for marketplace purchases, but consumers do earn Best Buy Reward Zone points on purchases. Reward Zone is Best Buy’s customer loyalty program.

Marketplace sellers ship orders placed through BestBuy.com and also handle returns and customer service. If there is a problem with a marketplace order that the seller isn’t resolving to the customer’s satisfaction, a consumer can e-mail BestBuy.com to have the concern investigated by the retailer under the provisions of a marketplace guarantee.

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