June 6, 2022
ROAS for 50% of vendors
Vendor adoption rate
Lift in vendor sales
Introducing Babytuto, a boutique parent and baby e-commerce marketplace with a variety of world-leading products in the infant development market. Babytuto has about 35,000 SKUs and completes about 15 million USD of GMV (gross merchandise value) per year.
In initial conversations, Babytuto approached Topsort’s team expressing a need for multiple revenue streams but wanting to control the advertisements so that they are relevant and do not degrade user experience in any way. Most importantly, Babytuto wanted advertisements that convert to sales in the end. Sponsored listings seemed like the natural winner—for the ease of use and the sense of native content that does not disrupt the user journey but adds relevancy to the search and discovery process.
Just a few weeks before Cyber Monday in Chile, which is the first week of June, Topsort partnered with Babytuto to provide the auction-based technology as an infrastructure for Babytuto’s own sponsored listings on their e-commerce marketplace. Topsort provides an off-the-shelf two-part solution to Babytuto: a fully self-service marketplace admin panel to see both aggregated performance and controls, individual user experience, and a self-service vendor dashboard that became an instant hit with vendors.
In fact, within a 3-day window, Topsort’s special vendor onboarding program achieved a 40% vendor adoption rate out of everyone who was invited and generated active participation in the auctions. Based on the vendor activity, the performance of this batch of sponsored listings, and the marketplace characteristics, our projection is that promoted listings on Babytuto will eventually generate additional profit equal to approximately 5% of their gross merchandise value.
With Topsort’s unique vendor onboarding program, vendors were very happy and saw results almost immediately. In fact, on average, the vendors who participated saw a 30x ROAS (return on ad spend) and have been blowing up our phones to ask for purchasing more ad credits. In addition, participating vendors saw a lift in sales upwards of 7.5%.
Optimizing sales in huge promotional calendar events like Black Friday, the Christmas period and Valentine’s Day is considered essential to increase revenues with any marketplace. But, as a marketplace, your real growth opportunity is from creating multiple revenue streams and additional profit centers.
The sponsored product listing platform is auction-based, bringing the relationship between vendors and the marketplace closer. Giving brands the opportunity to compete for prominent listing locations gives them the power to run their own advertising strategies, to attract customers within the site. To become a sponsored product, the vendor must not only be willing to pay a sufficiently high bid but must also maintain a high-quality score; this ensures the customers only see the relevant and desirable products.
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