Marketplaces: what are the main difficulties encountered by retailers, and what are the solutions?
During the release of the Marketfire e-commerce solution module on the PrestaShop Addons Marketplace, we had the pleasure of meeting with Xavier Vaucois, founder and CEO of General Internet and publisher of Marketfire, a new tool that aims to support online retailers with different aspects of their activities: from managing their direct sales and marketplaces (increasing turnover and margin, profitability), to financing their growth, including accounting assistance.
He tells us what the main challenges for today's e-merchants are, especially on cash flow and profitability of operations.
1. How was Marketfire created?
Xavier: we started financing retailers using business data and no longer their past balance sheets in 2019. We realised that the data and analysis we used to finance retailers at lower costs through better risk management was of enormous value to these retailers
Together with the retailers, we have built a tool that allows them to use their data to learn about and acquire the Amazon buy box, consolidate direct sales and marketplaces sales, analyse profitability for each product, measure trends, fees and commissions, track payments, payment delays, unpaid orders, calculate VAT, etc.
2. What were the major development stages?
Marketfire's engine was designed and built in 2019. We continue to improve it with our first customers in 2020. Between January and June 2020, we improved the graphical interfaces and ergonomics by providing a user-friendly application. Each of our customers bring their own ideas forward, and we are constantly improving the tool for the benefit of our retailers. This summer, we implemented the PrestaShop connector for the 1st retailers and made an agreement with you, PrestaShop, to help the 300,000 retailers in the community.
Since then, we have supported them with financial functionalities, i.e. monitoring orders and payments made through marketplaces, analysing unpaid orders, late payments, marketplace fees and commissions, and monitoring business volume and orders.
We have also helped them by analysing the top products - sold and returned, to improve catalogues and margins. We have simplified the accounting work by calculating the VAT to be declared in each state, taking great care to analyse all the shipping locations for each product, for each sale and the VAT thresholds of each state.
Finally, we have added functionality to increase profitability by calculating the margin on each sale, through analysing, at the product level, of the actual fees and commissions applied. Recently, we've added the Amazon buy box to help retailers earn more revenue. The data of all places is taken into account, as well as PrestaShop's live sales data.
We also integrate customer notifications to make a global synthesis, product by product or sales channel by sales channel.
3. How would you describe the tool?
Marketfire is many things: a performance management platform with a single, consolidated dashboard to steer its multi-channel activities, a platform for financing orders, inventories, projects at low cost, and finally a management control platform that analyses payments, changes in external cash flow and VAT.
4. What are the main difficulties for retailers selling on marketplaces?
Marketplace sellers are usually paid several weeks after the sale and shipment. The delay varies depending on the market place. We analyse sales and payment data to calculate many scores and derive the retailer's credit score. The better it is, the more it provides access to low-cost financing. We can finance their orders so that they can benefit from the fruit of their sales on T+1 at a rate of between 0.66% and 1.36%. We also finance their stock and projects with loans.
Secondly, retailers may sell their products in marketplaces, but these may not necessarily be profitable. It is important to measure the real fees and commissions involved, and set your prices accordingly. Also, it is important to keep track of the Amazon buy box price every day, for each product, if the retailer wants to maximise their sales potential. Also, taking account of the costs related to returns and cancellations is a key factor in optimising business profitability.
Calculating VAT accurately can be cumbersome and costly for any retailer. Of course, retailers think that all they have to do is give everything to their accountant and the accountant will take care of it. Except that very few accountants are equipped to open all Amazon reports for example (and Amazon is one of the places that helps retailers the most) to position the exact warehouse that shipped the product at the time of the sale. Also, not many retailers consider state thresholds and apply the correct rates (retroactively to the thresholds).
Marketfire consolidates everything, not just for one marketplace, but for all of them, which no marketplace can do on its own because they don't have the data from other sales channels. It has never been easier to help your accountant and potentially reduce the cost of selling via marketplaces.
Of course, everything we do for the Marketplace business, we also do for direct sales, especially via PrestaShop. We can also integrate other ERP data, amongst many other things.
5. What types of retailers might want to use a tool like Marketfire?
All of them! Small or large businesses, selling directly and/or on marketplaces, that want to develop a bigger, more profitable business. And of course, any retailer who wishes to be financed at low cost.
We sell our Marketfire platform at a low price to benefit everyone.
6. Why did you choose to join the PrestaShop ecosystem?
After covering the main marketplaces, our first retailers wanted to consolidate their direct sales. We developed the PrestaShop module to help the community do better. Also, our agreement with PrestaShop allows community retailers to take advantage of two unique European specialists.
7. The next key steps in developing Marketfire?
We want to develop more features to increase our customers' turnover and profitability. We are continuously integrating new marketplaces, with our standard Mirakl connector scheduled for this summer. Today, we cover a variety of languages English, Spanish, Italian and German, and we will enrich Marketfire's languages.