Best Buy is launching a new third-party marketplace this year. It’s bigger than just electronics
Best Buy plans to launch a new third-party marketplace in the U.S. in mid-2025, and the opportunity to sell on the platform is gaining attention from brands, even those outside of consumer electronics.
CEO Corie Barry told investors about the new marketplace on an earnings call in November, saying it would give its customers access to a larger assortment and new categories. It will also give sellers and advertisers a new avenue on which to increase their reach and build their brands, she said. In December, Best Buy’s chief marketplace and e-commerce officer, Frank Bedo, posted on LinkedIn that the marketplace began accepting applications.
This follows a previous attempt, from 2011 to 2016, when Best Buy launched a marketplace to compete with Amazon but shut it down. It only brought in 1% of Best Buy’s revenue and created confusion among buyers who thought they could return the inventory to Best Buy stores, a Best Buy spokesperson told EcommerceBytes in 2016.
Best Buy returns to this business while many sellers facing rising costs and dwindling profits on Amazon branch out to new platforms. While Best Buy is especially known for consumer electronics, the platform stands to benefit sellers of products complementary to electronics — like phone cases, home theater accessories or wellness products — or even completely new categories for the retailer.
“The traffic is very high, and the consumer base is very loyal — it has a lot to do with that brand that Best Buy has built,” said Megan Potts, founder of Triforce Digital Partners, an agency that specializes in non-Amazon marketplaces like those from Target, Walmart, Wayfair and Home Depot. “I think that Best Buy is going to add a lot of unique millennial eyeballs that are already shopping there; these are really affluent customers, much more affluent than Target and Walmart, even Amazon.”
Through the marketplace, the company is expanding into new categories while facing softened demand in its core business of consumer electronics. The retailer’s sales thrived immediately after the pandemic but have fallen for about two years. In its latest earnings call in November, the company reported a 3% dip in sales for the quarter that ended Nov. 2, citing weakness in the appliance, home theater and gaming categories.
A large, loyal customer base
The landing page for the new marketplace sells it like this: Sellers can tap into one of the top e-commerce websites in the U.S. and leverage its advertising business. Best Buy has more than 200 million online customers, according to Best Buy’s internal data from 2022 to 2023. The company says it generates more than 10 billion site views per year and more than 1 million transactions each week.
The new platform is a partnership with Mirakl, a software company that also powers third-party marketplaces for Macy’s, Nordstrom and Kroger that complement their traditional e-commerce sites with a larger selection from third-party sellers. The marketplace businesses also aim to boost advertising revenue — another growth area for retailers like Best Buy — by adding more products that draw in more customers.
Barry said it took a while to launch the new marketplace to get the in-store and digital experiences to work together, from search to fulfillment, membership, and any associated Geek Squad experiences. “We’re really working hard to make sure we, uniquely to Best Buy, bring to life a marketplace that we hope serves some of our consumers’ broader needs.”
Jay Antokol, senior marketplace manager for Tiger Companies, a portfolio company with a wide array of business and consumer products from office furniture to home decor, said he’ll probably sell a few hundred SKUs with Best Buy, likely in the outdoor living category.
“Most of the products we work with, most of them are not sold in stores either because they’re too large, or just the volume’s not there to support in-store,” he said. “We try to focus in on, obviously, our largest accounts [including Amazon and Walmart], but we’re always open to trying to see where the market’s moving, where we can add products across to other retailers.”
‘A curated, tailored marketplace’
Barry said the U.S. business will learn from Best Buy Canada, which has operated a Mirakl-powered marketplace since 2016, specifically how to augment the retailer’s traditional assortment with a deeper offering. She used an example: In stores, Best Buy can’t provide every cellphone case design customers would want, but it could do that through an online marketplace.
“I wouldn’t think about this as all of a sudden you’re going to come to Best Buy, and there’s this magical huge marketplace that has everything,” Barry said. “This will be a curated, tailored marketplace to the customer that is coming to shop with us and those deeper assortments that you would hope you could provide.”
George Hatch, director of marketplaces (excluding Amazon U.S.) for the e-commerce accelerator Pattern, said the company is already selling products on Best Buy’s Canadian marketplace — especially electronics and electronics-adjacent products — and has been waiting for the retailer to launch in the U.S. Hatch said brands “want to just ensure that they have a good offering anywhere that a consumer may be choosing to shop, so if a consumer is choosing Best Buy to do their shopping, they want to make sure that they have a brand-authorized option on that marketplace for that consumer.”
Andrew Waber, director of market research for Momentum Commerce, said in an email that smaller brands with products like phone cases and cables that may not yet have a relationship with Best Buy, as well as direct-from-manufacturer brands such as those from China that thrive on Amazon, could work well on Best Buy’s platform.
Triforce Digital Partners’ Potts expects Best Buy to be similar to Target Plus, which has less competition than Amazon. She also said it can be easier to score valuable placements during holidays, for example.
She said she worked with Best Buy on a dropship basis in 2020 with her previous company Spreetail, a brand accelerator, to help the company understand how to expand its assortment. She said she found it to be a misconception that Best Buy is just for consumer electronics and that non-consumer electronics brands would do extremely well. She added that brands may be able to get better placement than they would get on Amazon, as it’s a smaller platform, though it is still yet to be seen what kind of opportunities will be offered. Deals of the Day on Best Buy, she said, was especially effective when she was selling products on Best Buy’s website.
“Best Buy is going to be another one now where they can get these really high real estate placements — where you can’t talk to anybody at Amazon unless you are a top-five seller,” Potts said. “A homepage placement on Target [over Thanksgiving week, Black Friday and Cyber Monday] could give you $300,000 to $500,000 a day, which is very, very valuable to those brands.”