This year’s early Covid-19 lockdown came crashing down on small retail businesses. But many did survive by successfully pivoting most or all of their business to online sales. E-commerce marketplaces such as Etsy, Shopify, BigCommerce and others have been the salvation for small retailers. Providing an end-to-end online sales process from item selection to checkout to order fulfilment has been a winning formula for the e-commerce marketplaces.
Shopify serves over 1 million merchants and has started its own warehouse and fulfillment infrastructure. Etsy became a go-to website for face masks but carries goods from many micro-retailers, with a total merchant base of over 2 million. Expect to see record sales from e-commerce marketplaces when final Christmas shopping numbers are in.
The following excerpt from a Wall St. Journal article reports more on the topic:
While the year has been a struggle for small businesses, some companies that host their transactions have been soaring. Shares in Etsy Inc. and Shopify Inc., whose e-commerce platforms primarily cater to small businesses, have surged during the pandemic. Etsy has more than quadrupled this year, while Shopify has tripled.
For many small-business owners, the technology platforms have served as a lifeline as their companies shift to a focus on online sales.
Matthew Cummings owns a glass-blowing company that makes custom beer glasses in Knoxville, Tenn. He has been on Etsy since 2012, but didn’t move fully online until the pandemic hit and he had to close the doors of his bricks-and-mortar store. He said his Etsy sales are about 10 times higher this year.
Both companies have kept their pricing competitive during the pandemic. Etsy charges 20 cents per item listed by a vendor and a 5% transaction fee for each sale. Shopify offers tiered monthly plans. The most basic level charges a monthly fee of $29 for sellers and a 2.9% transaction fee.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group