With the opening of its website to 3rd parties in 2020, Otto hoped to regain market share in the web retail market. Within the initial years, the corporate enjoyed the advantages of the platform model, but now it has hit a snag. Fee increases, disputes with selling partners, and internal changes have led to a crisis.
This conclusion is drawn by Handelsblatt concerning the iconic shipping company from Germany. The business newspaper writes: “Germany’s second-largest online marketplace is in deep crisis. Because of this, Otto.de is losing a whole lot of external retailers who sell via the Hamburg-based company’s platform.”
Otto’s marketplace
Local hero Otto, which grew as a mail-order company with physical catalogs, decided originally of this decade to open its doors to external retailers and types, following market leader Amazon. Lower than a yr ago, CEO Marc Opelt referred to the platform model because the “key growth engine” of the web department store, accounting for about one-third of income.
The platform model was Otto’s ‘key growth engine’.
Last spring, Otto announced preparations to open its online marketplace to partners in Europe. During this time, Bodo Kipper, who was accountable for the marketplace, left Otto because of differences in strategic direction, as the corporate acknowledged.
Seller fees
Not long after, Otto announced a drastic increase in its selling fees, raising the essential fee from 39.90 euros to 99.90 euros monthly. Based on Otto, this was needed because of the proven fact that many partner sellers had added low-quality products to the marketplace prior to now. Moreover, Otto increased commissions for certain product categories.
Deleted accounts
Based on Handelsblatt, the fee increases have contributed to merchants turning their backs on Otto. The business newspaper counted 1,178 deleted seller accounts prior to now five months.
Handelsblatt counted 1,178 deleted seller accounts.
Otto has confirmed that merchants have left but denies that it’s as many as reported. The corporate states that about five hundred sellers left the platform after the fee change this spring.
