You may not know it yet, but Latin America has its very own Amazon. It’s called Mercado Libre.
The Argentina-based company launched back in 1999. Since then, the marketplace has transformed itself into an eCommerce powerhouse.
Mercado Libre is the leading online marketplace in Latin America. As of 2021, it registered 139.5 million active users, and earned 7.07 billion USD in revenue. (source)
Latin America is among the fastest growing eCommerce markets. This makes ML one of the best ways of entry for US sellers into the Region.
Below, we’ll explore the ins and outs of this marketplace. You’ll learn how the platform works and how to make money on Mercado Libre.
What is Mercado Libre?
Mercado Libre is the largest eCommerce site in Latin America.
As of 2022, it operates in 18 Latin American countries. Plus, the marketplace is run by almost 30,000 employees across the region.
This is a fully automated marketplace, just like Amazon. Both third-party sellers and individual users can enroll, list and sell products on the platform.
ML is also the first Latin American tech business listed on NASDAQ – it has been there since 2007. It also owns 5 distribution facilities across the region, and a software center in Colombia. (source)
The site is also very user-friendly, being accessible from the website or the mobile app.
|Mercado Libre in Latin America|
Source: Mercado Libre
The site is also a sales platform for over 500,000 small and medium businesses (SBM) in Latin America.
The company states that 40% of SMBs generate over half of their revenue from the marketplace. (source)
Mercado Libre features a vast product selection.
Users can find electronics, apparel, auto parts, media items, and consumer goods.
As such, ML is a full-fledged retail store, open to all 650 million Latin Americans.
How Does Mercado Libre Make Money?
Mercado Libre drives revenue through their eCommerce and Fintech services. The first include sales and shipping fees from first- and third-party businesses.
Fintech revenue comes from Mercado Libre’s payment and credit services. These may include a commission from each payment or loan.
To collect revenue, the platform offers various services to facilitate user and seller experience. Such services include warehousing, delivery logistics, and online payments.
Recently, the platform also started featuring in-site ads, storefront creation, and classified ads.
Here are the key marketplace services:
Mercado Pago is a payment solution exclusive to Mercado Libre.
It’s designed to safeguard user-seller transactions, both physically and digitally.
The service also enables money transferring between Mercado Libre users. It’s available in Mexico, Brazil, Chile, Uruguay, Peru, Argentina, and Colombia.
Mercado Pago also has its own ad to facilitate transactions. The app can read credit cards and QR codes to speed up payments between parties.
This is a complete logistics operation for third-party brands. Sellers can partner up with approved carriers to deliver their products across Latin America.
Mercado Envíos also offers warehouse and stock management options. Enrolled sellers also enjoy unique discounts on storage and shipment fees.
Mercado Libre opened a credit line for buyers and sellers alike. It’s used by almost 10 million users, as of 2021.
The company created this service to help Latin Americans overlooked by banking institutions.
Thus, users can take loans from Mercado Libre to pay for products.
Payments and interests are usually paid using Mercado Pago. The final interest fees may vary, depending on the loanee’s overall credit score in the marketplace.
This is the equivalent of Amazon Stores.
Mercado Shops enables merchants to create unique micro-stores to showcase their catalogs.
Sellers can set up a shop for free. Then, Mercado Libre may charge for any extra function requested by merchants.
All stores can integrate with social media, and Mercado Libre’s services. For example, brands can set up in-store payments using Mercado Pago.
Merchants can create dedicated ads to promote their items on and off Mercado Libre. Available ad options include banners, or suggested products in the search ranks.
This is a Pay-per-click service. That means brands only pay a fee or each click on their ads. Sellers can choose when to showcase ads. You can also set daily budgets to boost your visibility.
This comprises Mercado Libre’s classified listing services. It’s open to realtors and car dealers to list properties and vehicles in the marketplace.
Classified listings are among the most searched pages in ML. It’s also noteworthy that sellers only pay for ad placement fees, not for value fees.
That’s because users can’t complete classified sales online. Instead, customers can see such listings and contact sellers to kick off negotiations.
Can Americans Sell on Mercado Libre?
Mercado Libre is among Latin America’s best eCommerce sites. And it’s also available for US sellers!
The Global Selling Program allows international sellers to tap into Mercado Libre. This program gives foreign sellers the full backup of Mercado Libre’s machinery to sell in Latin America.
As of 2021, cross border trade is available for Mexico, Brazil and Chile. So, you can take advantage of the Global Selling Program to handle Shipping, customs, currency and taxes.
The program is partnered with carriers like DHL. Sellers only need to print and paste shipping labels, and deliver your parcels. From then on, the carrier takes care of the legwork.
New sellers should submit the types of products they’ll offer in Mercado Libre. Fill in your business and contact data. You should also include banking details to manage payments and fees.
You can also set up various payment methods for users. These range from the usual credit card to physical deposits, and Mercado Pago services.
The listing process is quite similar to Amazon’s. You can upload items using a CSV file. Only make sure you submit the correct categories, GTINs and dimensions.
Just like on Amazon, users can find all kinds of products within Mercado Libre. There are a few exceptions, of course. You can review the restricted products list here.
Sellers should also consider carrier restrictions in Mercado Libre. This is key to creating a smooth global selling operation. Here are the allowed package dimensions:
Source: Mercado Libre
There’s no cost for listing products in Mercado Libre. Brands only incur a fee once they sell a product.
Sales fees will vary depending on the territory and type of product you sell. For example, Mexico fees range between 12.5% and 22.5% In contrast, Brazil has a fixed fee, at 16.5% per order.
Mercado Libre also charges an additional per unit fee. This is applicable to every extra low-cost product sale.
You can check Mercado Libre’s Shipping fees right here.
Related content: How to Sell on Amazon in Mexico
It’s easier to expand your business alongside the right allies. Joining forces with Mercado Libre can give you a unique edge to succeed.
Mercado Libre boasts over 20 years of experience in eCommerce sales. Plus, it’s worked hard to earn the trust of its huge customer base.
The marketplace includes many services that help sellers build better connections with users. That’s what makes them one of the most popular eCommerce sites in the region.
So, take note of Mercado Libre, if you want to make it south of the border. In time, you’ll set up a unique shop in one of the flagship retailers in Latin America.
Esteban Muñoz is a content writer at AMZ Advisers, with several years’ experience in digital marketing and e-commerce. Esteban and the AMZ Advisers team have been able to achieve incredible growth on Amazon for their clients by optimizing and managing their accounts, and creating in-depth content marketing strategies.