Best Buy Is Closing Its US Marketplace

On February 24, 2016 Best Buy closed its US marketplace business.

In a letter to sellers Best Buy said:

“As of February 24, 2016, we have discontinued our Marketplace business and removed all third party seller listings. We believe we can continue to provide a positive customer experience on our site through other product sourcing methods.”

Best Buy first opened its marketplace in September 2011.

There were about 100 marketplace sellers, which altogether contributed to less than 1% of sales. Best Buy spokesperson Jeff Shelman told EcommerceBytes:

There are two key reasons for the closure: to invest the money the company is spending on supporting the marketplace business into other areas of strategic growth, and customer confusion over marketplace purchases.

That confusion stemmed from the inability to offer in-store pickup for items offered for sale by third-party merchants, and from the fact that customers could not return marketplace items to Best Buy’s retail stores.

Customers buying from websites which originally were not marketplaces are confused if they will get the same experience as previously. Confusion among buyers was that they thought they would be able to return the third-party merchandise, 70% of which overlapped with the Best Buys’s own inventory, in Best Buy stores

Many were used to having in-store pickup and returns, so only learning about it not being available for marketplace sales after the purchase is a bad experience. Marketplaces are meant to have the same buying experience across all sellers.

For Best Buy the problem was how little traction the marketplace had - only 100 sellers, less than 1% of sales - and yet the costs introduced in running it.

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Juozas "Joe" Kaziukėnas

Founder of Marketplace Pulse, Joe wears multiple hats in the management of Marketplace Pulse, including writing most of the articles. Based in New York City. Advisor to other startups and entrepreneurs. Occasional speaker at conferences.

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