Shop-in-Shop (Commission Model)

Shop-in-Shop (Commission Model): Meaning, Benefits, Function 

What is the shop-in-shop commission model in eCommerce? Learn how it works, why marketplaces offer the shop-in-shop model and how it benefits sellers.

With the rise of marketplaces, many businesses have turned towards these online platforms to sell their products. Marketplaces have devised various commission models to offer value to retailers who enter into contracts with them. One service that marketplaces offer under the commission model is the shop-in-shop or separate URL shop option.

What is shop-in-shop? What are the benefits that it offers to retailers? What advantages do marketplaces gain from it? Find out in this article.

What is Shop-in-Shop? 

In the context of the commission model, shop-in-shop (also known as Separate URL) is a service that a marketplace provides to its sellers. It allows sellers to have their own unique URL or separate seller website on the marketplace.

In other words, retailers would still use the marketplace to sell their products. However, they could create a separate URL for their shop. This URL provides them with a dedicated website address which the customers can land on upon searching for the retailer’s products on a marketplace. Marketplaces that offer separate URLs include Amazon, Etsy, eBay and WooCommerce.

The shop-in-shop model facilitates sellers in multiple ways. The dedicated domain allows them to maintain a brand which, while still located on the marketplace alongside other products by many other sellers, still maintains a distinct identity. As the name suggests, retailers can use a separate URL to create their own brand’s shop within the larger marketplace.

The option to use shop-in-shop or separate URL differs from marketplace to marketplace. Each platform may have varying policies. Seller storefronts may leverage the features on offer to customize and personalize their shop-in-shop accordingly.

Benefits of Shop-in-Shop for Sellers 

Sellers can leverage an online marketplace to reach a wide base of online shoppers. At the same time, they may create their shop-in-shop on the platform through a separate URL, gaining multiple benefits some of which include:

• Brand Identity: With a separate URL within the ecosystem of an online marketplace, sellers can craft a recognizable brand and showcase their products to a wider base of consumers than their own website may reach. Not only that, but they are also able to strengthen their brand’s visibility and impression amongst consumers. They become more recognizable and memorable to customers by using the shop-in-shop feature.
• Seller credibility: With separate URLs, sellers can enhance their credibility for their customers. Their online presence receives a boost with the establishment of a shop-in-shop. They appeal to customers who are looking for companies they may trust and who are invested in building their brand name across various online platforms – all of which a shop-in-shop facilitates for sellers.
• Shareability: When sellers have a separate URL or a shop-in-shop, they can simply share the URL across all their social media accounts. This cross-promotion across multiple marketing platforms improves their visibility and eventually, their revenue. Interested customers do not have to take a longer route by first going to the marketplace and searching for products to find the seller. Instead, through a separate URL, customers can land directly on the seller’s shop on the marketplace and shop without distractions.
• Market Opportunities: With separate URLs, sellers can launch targeted marketing campaigns on marketplaces to attract customers. They may engage in promoting their shop-in-shop by using ads or other strategies; for instance, on shopping days, sellers may use campaigns to reach and appeal to a wide consumer base. This not only benefits sellers but also the marketplaces.

Why Marketplaces Offer Shop-in-Shop 

Marketplaces offer the shop-in-shop feature as a unique selling proposition. The feature not only benefits sellers but also provides marketplaces with benefits, such as:

• Value proposition: The shop-in-shop feature attracts sellers who want the advantages of a marketplace alongside the space to carve their identity on the platform frequented by a large volume of online shoppers. Thus, marketplaces can set themselves apart from their competitors by providing a shop-in-shop function, which appeals to a wide array of sellers.
• Seller Engagement: Marketplaces can drive up the engagement of sellers by offering them customization and personalization options. Sellers are likely to invest more in their online shops on a marketplace when they are empowered to set up their individual storefront within the larger platform. With the power to enhance their brand identity, they become actively engaged with the platform and may remain loyal to it.
• SEO Success: Marketplaces can capitalize on the separate shop URLs to boost their visibility and ranking on search engines. Stores with separate URLs that are optimized will draw organic traffic, which will also boost the performance of the marketplace. In turn, this will attract more customers to the platform who use search engines to find products.
• Revenue generation: Marketplaces with a solid strategy for shop-in-shop are able to earn revenue from the model. With separate URLs, sellers can market their products more competitively and drive up their sales. Marketplaces can charge commission per their policies and in turn, leverage the success of sellers to improve their own bottom line.

Key Takeaways 

• Shop-in-shop is a feature that marketplaces offer to sellers under their commission model. Through it, sellers can establish their distinct online storefronts within the larger marketplace.
• Marketplaces that offer the shop-in-shop feature include Amazon, Etsy, and eBay.
• Shop-in-shop is also known as Separate URL, as through it, sellers can secure a dedicated web address on the marketplace.
• Shop-in-shop allows sellers to strengthen their brand identity and recognition. They may improve their online presence, boost their credibility, and carry out cross-platform marketing easily.
• Marketplaces also benefit from providing the shop-in-shop feature. With it, they are able to attract a diverse range of sellers and engage them actively on their platforms. They are also able to leverage the SEO traffic of their sellers’ shop-in-shop and earn more revenue.