The Relationship Between E-Commerce Sellers and the Modern Workforce
For many in today’s workforce, a traditional career doesn’t quite cut it. Demands for more flexible hours and additional sources of income outside of their full-time jobs have motivated a growing number of workers to join the gig economy. From driving with Uber to taking care of chores through TaskRabbit, gig work can consist of just about anything. One of the most popular ways to earn extra cash is by selling products on e-commerce marketplaces such as Amazon.com and Etsy. According to Hyperwallet’s January 2017 study, “The State of E-Commerce Marketplace Selling in 2017,” more than nine in 10 marketplace sellers bring in up to 49 percent of their total income selling on e-commerce sites.
Although marketplace selling has helped provide many in the modern workforce with the flexibility and supplementary income they so desperately desire, payments difficulties and a lack of trust have kept others from turning their gig work into a full-time career. Here’s how speeding up the payments process and increasing seller trust can benefit both e-commerce marketplaces and their sellers.
When it comes to marketplaces, e-commerce sellers aren’t short of options. Amazon, eBay and Shopify are just a few of the many marketplaces that e-commerce sellers have the luxury of choosing from. Given this competition, it’s important that marketplaces closely cater to the needs and preferences of sellers. Failing to do so could prove costly; as many as 13 percent of sellers have switched to another online marketplace due to frustrating payment processes.
By implementing a fast and easy payment method, marketplaces stand to increase the number of sellers they work with as well as the number of transactions they process. This is especially true for global e-commerce marketplaces. One-third of those who sell only in the U.S. indicate the difficulty, inefficiency and cost associated with international payment processes prevent them from selling to other geographies. Marketplaces that work to speed up and simplify their payments process promise to attract international sellers and boost their total number of transactions.
Gig work is often thought of as a supplementary source of income. However, for some it can take the place of a traditional career. One in 10 sellers are focused on making enough money through online selling to quit their full-time job in 2017. A lack of trust in the e-commerce marketplace is one reason more sellers don’t do the same. For example, one-quarter of sellers haven't received a payment for a product they sold. Perhaps even more importantly, half of all sellers don’t trust the security of their personal information.
In order to convince more sellers to choose a career in the gig economy, marketplaces need to improve the speed, liability and security of payments. Doing so will not only offer marketplaces the opportunity to process more transactions, but it should also enable sellers to choose a career that offers the flexibility they crave.
E-commerce marketplace selling serves as a convenient option for workers looking to earn a few bucks on the side, but payments issues have kept many from turning it into a full-time job. By taking steps to speed up the payments process and mend seller trust, marketplaces can soon change that.
Michael Ting is the senior vice president, digital markets at Hyperwallet. He has more than 20 years of product, business development and operations experience in financial services, payments and the on-demand economy.