CMS/LPM Algorithmic Barriers on Platforms like Vinted, eBay, and Etsy
Although platforms like Shopify, Vinted, eBay, and Etsy provide small businesses with opportunities to sell online, their algorithms and fee structures can unintentionally harm the very businesses they aim to support. Algorithmic Challenges These platforms use algorithms that prioritise the following: High Seller Activity Businesses that post frequently or o er discounts often gain better visibility. However, this situation disadvantages small businesses that cannot a ord constant promotions or have limited resources. Low Margins and High Fees Many platforms charge sellers multiple fees. For instance: eBay Charges a final value fee of 10%-12% of the total sale price, including shipping. Etsy Sellers face a 6.5% transaction fee, alongside listing and payment processing fees. Shopify Transaction fees, excluding monthly subscription costs, can range from 2.4% to 2.9%. Wix Transaction fees, excluding monthly subscription costs, can range from 2.1% to 2.5%. Wix standing at the lowest increase overall. According to various marketplace analytics reports, these fees have increased by an average of 15% to 25% over the years, further squeezing small businesses' profit margins. Limited Branding Opportunities Platforms often limit how sellers can present their brand Sellers on Etsy and eBay operate within the framework of the
platform's branding, making it di cult to establish a distinct identity. Businesses must comply with strict platform guidelines, often sacrificing creative autonomy. Dependency on the Platform Once a seller builds a customer base on these platforms, moving o -platform becomes challenging due to Loss of Visibility Sellers face decreased sales when attempting to direct customers to independent websites. Increased Platform Reliance: Many businesses end up locked into these ecosystems, unable to compete independently. Price Wars and Commoditisation Algorithms often promote the cheapest options, fostering a "race to the bottom." This practice: Undermines quality-focused sellers who cannot compete on price alone. Encourages commoditisation, making products interchangeable and devaluing unique o erings.
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