Otto is flourishing: is it an opportunity for merchants?

European online retailer and marketplace Otto has enjoyed significant growth in recent months. As they said in a report about the financial year 2017/18:

Once again, e-commerce was a key factor in this positive development. Worldwide, online sales grew by 10.9 per cent to just under EUR 7.8 billion. In the German online business, the Otto Group generated revenues of more than EUR 5.4 billion, an increase of 10.2 per cent. The Otto Group is thus maintaining its position as the second largest e-commerce player in Germany and one of the largest in the world.
– Otto

We wrote about the Otto marketplace and what it offers merchants earlier in the year. But to what extent does it represent a sales outlet opportunity for online merchants? Tamebay thinks it’s very interesting and the news that it has enjoyed decent growth of late doesn’t dent that enthusiasm. It’s huge in Germany but also popular in Austria, Belgium, the Netherland and Russia too.

The biggest barrier to entry on Otto, as noted by the DIT (Department for International Trade) on their online marketplaces guide, is the 10k Euro one-off registration fee required to get started. And you’ll also need a catalogue of more than 100 different SKUs and pay sales commissions between 10 – 15%. But should you seek to sell on Otto through the DIT, and be successful in that application, they will waive the 10k fee. Find out more here.

Whether the marketplace offers a viable opportunity for you will very much depend on the size of your business and what you sell. If you are a smaller merchant then you will likely be best advised to consider other marketplaces, specifically Amazon.de, in the first instance before looking to Otto. And with Amazon you can also plug into the Amazon Europe FBA service to help you with logistics. Germany is a massive ecommerce market and, even with Brexit on the horizon, is worthy of your consideration as a country to start selling to seriously.

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