Best Buy’s website will start selling sports apparel, Martha Stewart wares alongside electronics

People will soon be able to buy Fanatics sportswear and Martha Stewart cookware, along with all kinds of electronics, on the Best Buy website.

The Richfield-based retailer announced Tuesday morning it has re-entered the third-party marketplace business.

It’s a low-risk, high-reward way for Best Buy to better compete with Amazon and other online outlets. And it more than doubles the retailer’s product offerings.

“We’re looking at the marketplace as a natural extension of the things that we bring to our customers today,” said Jason Bonfig, chief customer, product and fulfillment officer at Best Buy. “It’s a more holistic picture of what our customer would expect and how do we make sure [they] can purchase whatever they would like to at Best Buy.”

The new marketplace also broadens the retailer’s presence in categories where rivals like Micro Center excel, with a larger selection of laptops, gaming accessories and products from brands such as Razer, Microsoft and Samsung.

“The marketplace is really trying to find the balance of making sure that a customer can get what they want from Best Buy and it expands our assortment, but at the same point in time, not getting that expansion to a point where it becomes very difficult to shop our site,” Bonfig said.

Analysts aren’t confident about the marketplace’s ability to draw in new customers and “move the needle” significantly.

Best Buy opened its website to select outside sellers from 2011 to 2016, with about 200 sellers participating. However, it ended the program amid low sales and confusion over returns.

A refined approach in Canada, launched in 2016, has been more successful: Third-party sellers now account for 25% of orders shipped on BestBuy.ca, according to Jefferies investment bank.

A U.S. marketplace, Jefferies said, could account for 14% of Best Buy’s online sales by 2030, with commissions boosting profits starting this year. Best Buy declined to comment on when it would expect to see a return in investment.

“It’s going take awhile for shoppers to realize Best Buy has the third-party items. So I think it’s going take at least a couple of years for this to really ramp up,” Chukumba said.

The new U.S. marketplace, same as Best Buy’s Canada hub, is powered by Mirakl, an e-commerce software company that has also worked with companies like Kroger, Macy’s and L’Oréal.

Other retailers from Amazon and Walmart to Target have seen success with outside sellers. Target announced plans in March to increase sales from its third-party marketplace from $1 billion in last year to $5 billion by 2030.

CEO Corie Barry previously said Best Buy’s U.S. marketplace will focus on new products and offer multiple versions of the same item, meeting customer demand for deeper selection.

“We can see that in customers who are searching our website and looking for a broader selection or looking for a broader quantity of products, and we just don’t have them there,” Barry said on a March earnings call.

While Amazon operates an open marketplace with minimal entry requirements for sellers, Best Buy, similar to Target, is taking a more curated approach. All potential sellers will be vetted before joining, which Barry previously said ensures “the positive experience [customers] would expect at Best Buy.”

More than 1,500 sellers have been accepted to Best Buy Marketplace, Bonfig said. The initial launch will include over 500 sellers.

“They’re experts, curating what kind of products they need to carry and how to put it together into a full-service package,” Hyunjoo Im, retail and consumer studies director at the University of Minnesota, said in a prior statement. “The price may not be the lowest, but I know for sure that the product is safe.”