Market Place sales movement

Last week, I posted about a marketplace which saw tremendous growth in 2022 relative to the past decade. After digging into it, it seems to correlate with an oversupply of product in the traditional bicycle retail channel, resulting from a pandemic induced bullwhip effect.

The surge in sales for this marketplace led me to wonder if this was happening on other marketplaces that we are monitoring. The chart below plots the rolling trend line for two marketplaces against one another over the past 6 months. The blue line represents a more established marketplace whose primary revenue stream comes from fees charged for completed listings (10-20%). In stark contrast is the marketplace we looked at last week, represented in red. This second marketplace charges a flat fee for monthly access to list product.

Clearly, sellers prefer to list on the lower fee marketplaces. However, as this applies more pressure to their servers, I would expect the fees to increase. Currently, they do not have a mechanism for transacting from within the marketplace, so it is unlikely they would pivot immediately to a percentage fee structure right away.

Similarly, as this strategy becomes more popular, we will likely see brands monitor the marketplaces in order to restrict any dealers who may be moving product through sales channels which are restricted by their dealer agreements. Most brands’ dealer agreements explicitly list certain sales channels as approved and requiring explicit approval for adding additional channels.

Our goal at Bicycle Market Research is to build out real time monitoring systems for the various market channels that have alluded traditional market analysis techniques. In doing so, we will be able to better understand the behaviors of consumers, brands, and other stakeholders.

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