Big box retailers are increasingly opening third-party marketplaces, and this week craft supply retailer Michaels joined the fray. The new Michaels marketplace allows craft supply sellers to list their products on Michaels.com. Orders are processed, warehoused, packed, and shipped by the third-party seller.

The marketplace allows Michaels.com to more than quadruple its product assortment, going from 250,000 to more than 1 million SKUs, without the investment an expansion like this would otherwise typically entail. Michaels is accepting applications from sellers in categories including arts and crafts supplies, candle and soap making, leather and woodwork, baking, tools and tech, yarn, stitchery, kids, toys, education, journaling, and seasonal products with the hope that Michaels.com becomes a premier destination for consumers looking for craft supplies.

The marketplace trend

Opening a marketplace is a current ecommerce trend for large retailers. Over the last few years Land’s End, Hudson’s Bay, Macy’s, Target, 1-800-Flowers.com, and Anthropologie have all added marketplaces to their ecommerce sites, joining massive marketplace players Amazon and Walmart. Marketplaces are attractive because in addition to cheaply and rapidly increasing assortment, they improve an ecommerce site’s placement in search by enabling it to rank for many more search terms items and they can be a hedge against supply chain disruptions.

“The marketplace business model is almost too good to be true,” Ashley Milns head of UK sports equipment retailer Decathalon, told ComputerWeekly recently. “You can massively increase your product range, and third parties deal with stock, pricing, content, storage and fulfillment, the returns, and aftersales, and they’ll pay you for it.” The Michaels marketplace is charging selling a 15% transaction fee on all sales.

According to Sohini Pramanick, partner at consultancy OC&C, a goal is to launch the marketplace in such a way that the consumer hardly notices anything has changed. Michaels has integrated its third-party sellers seamlessly into its ecommerce site so that their storefronts are not easily noticeable. Entering the name of a specific third-party shop into the search bar doesn’t bring that shop up, for example, so the average consumer wouldn’t necessarily realize they were shopping from anyone other than Michaels directly.

Advantages and limitations for sellers

For sellers, the Michaels marketplace gives them access to the tens of millions of visitors that come to Michaels.com each month. It’s important to note, however, that sellers don’t get access to their customer’s information and aren’t able to market to them directly. “Protecting our customers’ privacy is extremely important to Michaels,” says Rachel Petersen, Head of Corporate and Product Communications. “Our third-party sellers can only access the customer information necessary to fulfill an order. Per our Seller Agreement, they are not permitted to market to Michaels.com customers directly or to include marketing materials in shipments to divert customers from Michaels.com.”

The company revamped its customer rewards program and, last month launched a Michaels credit card. Customers who shop in stores and online, including from marketplace vendors, can 9% back in rewards on purchases at the retailer. Michaels has also been working to reorganize and modernize its 1,300 stores in the US and Canada by creating less crowded aisles, and experiential inspiration hubs throughout the store.

The path to opening a marketplace

The Michaels marketplace was originally scheduled to open in August, but as sellers began the process of uploading products, it became clear that the system was clunky and difficult to use. At that time, one seller said, “Import is a mess. I can’t copy a listing or delete it, only archive it. Adding a listing requires information that is irrelevant.” Sellers were supposed to be able to sync their Shopify listings with the Michaels storefront, but that function was not working. The launch was pushed out from August to late February, by which time many of these hiccups had been corrected.

Sellers are given a support email address and must also list a phone number for buyers to contact them, and sellers can set their own hours of availability. Some sellers on the marketplace at launch have just two items, like SpeedSew, while others have hundreds or even thousands of products listed. If Michaels carries a selection of a brand’s top products in its stores, such as Fiskars scissors, there’s an opportunity to for that brand to now sell the rest of their relevant assortment on Michaels.com via the new marketplace.

According to Petersen, there are plans to allow Michaels.com marketplace sellers to pay for advertising on the platform for better placement in search, a further method of monetization for the craft chain. 

Interested sellers can apply here: https://www.michaels.com/marketplace

Abby Glassenberg

Abby Glassenberg


Abby co-founded Craft Industry Alliance and now serves as its president. She’s a sewing pattern designer, teacher, and journalist. She’s dedicated to creating an outstanding trade association for the crafts industry. Abby lives in Wellesley, Massachusetts.

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