Ethical Superstore set to launch new marketplace

Nov 18 2010 by John Hill, The Journal

PROMINENT Gateshead online trader Ethical Superstore is launching a marketplace where ethical businesses and charities can sell their products to the general public.

Ethical Superstore has become the leading source of ethical products in the UK over the last seven years, recording sales of £4.3m in the year to July 2010 and offering over 9,000 products.

The company hopes the official launch of its OneGoodMarket venture will allow it to expand its product range to 100,000 by allowing retailers to offer products through the platform without taking up space in the business’ Team Valley warehouse.

Ethical Superstore co-founder Vic Morgan said: “Our vision of Ethical Superstore was to be an ethical Amazon. What it’s become is a successful and large retailer of products.

“With OneGoodMarket, we’re aiming to make our successful e-commerce platform available to retailers and create a marketplace where suppliers can have their own storefront within the site.

“We turn away hundreds of suppliers every year because there are limits to space, but they are now no longer limited by which products we can stock in our warehouse.”

Ethical Superstore has been boosted by two investments from the Finance for Business North East fund, and has attracted funding from organisations including Northstar Ventures, NEL and Newcastle-based entrepreneur Jeremy Middleton.

He said: “We’ve raised a few rounds of finance, and the last round of £1m in June was instrumental in making this happen.”

While the superstore itself offers a range of products including the Cafedirect, Divine Chocolate and Traidcraft brands, Morgan said the new marketplace will be particularly useful for shopping on a more local level.

He said: “This gives us the chance to tackle the local shopping part of the market in which you can type in your postcode and find out where to go for your fresh goods.

“It can also help charities to get involved in selling their goods, as well as those selling artisan products who may have a strong local following.”

Morgan said he expects to see more large retailers setting up a marketplace platform.

While online retailers such as Amazon already have such a facility in place, clothing retailer ASOS is also launching one to allow smaller retailers to sell through their site. OneGoodMarket itself offers retailers a chance to take advantage of Ethical Superstore’s profile as well as the provision of a dedicated storefront, in exchange for a 10% commission on sales.

Morgan said: “I think we’ll increasingly see larger retailers expanding in this area. If you look at the growth model for the successful online retailer, you’re increasingly seeing marketplaces as a common part of the strategy. It’s the logical next step when a retailer hits a critical mass of suppliers and consumers.

“However, whereas five years ago you had to be an Amazon to have a successful marketplace, there’s more evidence of niche marketplaces, such as Not On The High Street, working well. I see that as a positive development.”

While OneGoodMarket is currently attracting retailers for an official launch on December 15, work is being carried out on a mobile app for Blackberry and iPhone that will enable consumers to locate retailers on the move.

Morgan said: “If you want to find an organic retailer or a farm stand within five miles, we’re currently collecting data that will allow us to make that information available through an app. That’s likely to be available within the next six months.”