The fear arrives a few months after a marketplace launch. The marketplace line goes up, the website line wobbles, and somebody in the meeting says the word cannibalising in the tone normally reserved for a gas leak.
It is a fair worry. It is also one you can measure with an afternoon and a spreadsheet, which is more than most worries offer.
Think of the marketplace as a second door on the same shop. The question is whether new people are walking through it, or your regulars have just found a door nearer the car park.
Here is how to find out.
Read the labels. The marketplace keeps the email address, but you ship the parcel, so you hold a delivery name and a postcode for every order. Match them against your own customer list. New names are new customers. Familiar ones are regulars using the other door.
Compare the bestsellers. Put the marketplace top twenty next to your own. If the lists barely overlap, you are serving a different shopper with a different basket, and nobody is eating anybody.
Watch a gap. Sooner or later an item goes out of stock or gets delisted on the marketplace. Look at what your own site did with that product in the same days. If your sales did not move, those marketplace orders were never coming to you anyway.
Check the price. If the same product is cheaper on the marketplace than on your site, stop investigating. You did not get cannibalised. You put up a sign pointing at the other door.
Now the part that takes the heat out of it. A cannibalised sale is not a lost sale. You still made it. You just paid commission on an order that would have come to you direct. So the real cost is not the marketplace revenue. It is the commission on the overlap. If one order in ten comes from a name you already knew, you are paying a toll on that one, and the other nine are the reason you opened the door.
Cannibalisation is not a verdict on the channel. It is a number, and usually a smaller one than the gas-leak voice suggested.
If this is the exact wall you are staring at, tell me what you are seeing: mail@sandeepkv.com, or message me on LinkedIn.