Allowing third-party sellers to sell on an e-commerce site can instantly expand a retailer’s online offerings without the retailer having to invest in more merchandise, but can also confuse shoppers who want to return their merchandise. After 5 years, Best Buy is shutting down its third-party marketplace today, citing shopper confusion and a decision to invest in other parts of the business as their main reasons.

Running a third-party marketplace has been a very profitable venture for Amazon, which also handles storage of merchandise and order fulfillment for companies that are interested. It has also worked out well for companies like Sears, Walmart, and Barnes & Noble, with the occasional item curation problem or being blamed for pricing errors.

Best Buy announced some post-holiday season layoffs at their corporate headquarters at the beginning of this week, which probably has something to do with the abrupt announcement that the marketplace would be closing. ECommerceBytes reports that sellers learned about it yesterday, and the closure is happening today.

The e-mail that sellers received yesterday said, in part:

Dear Marketplace Seller:
As of February 24, 2016, we have discontinued our Marketplace business and removed all third party seller listings. We believe we can continue to provide a positive customer experience on our site through other product sourcing methods. This is notification that Best Buy is terminating the Marketplace Seller Agreement, including the Standard Terms, Program Policies, and any subsequent amendments (the “Agreement Documents”), effective March 24, 2016. Please process all open customer orders, including any subsequent returns, under the terms of the Agreement Documents.

A Best Buy representative explained to ECommerceBytes that one concern about the marketplace was confusion over whether items could be returned to Best Buy stores, as regular BestBuy.com purchases can. While most of the sellers were large competitors like Rakuten and Beach Camera, the marketplace also had the problem that Best Buy is not the official seller, and that customers would only realize this when they needed to return an item or make a warranty claim.

Sellers will have one month to wrap up their business on the site, and then must find somewhere else to sell. The third-party merchants sold similar merchandise to Best Buy but often refurbished; that’s a business that Best Buy would like to capture for itself, expanding its Geek Squad Certified program. Sounds more promising than Geek Squad Optimized, at least.

Best Buy Confirms Closure of Third-Party Merchant Marketplace [ECommerceBytes]

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