An online marketplace is a website or app that facilitates shopping from many different sources. The operator of the marketplace does not own any inventory, their business is to present other people’s inventory to a user and facilitate a transaction. eBay is the ultimate example of an online marketplace, they sell everything to everybody. There are many other types.
Consumers don’t like using apps from single retailers. They are much more likely to download an app that offers product ranges broader than one store can offer. That’s one of the major appeals of a marketplace.
Marketplaces have some downsides. Because products are being offered from many sellers, the information about them is often not comparable and the delivery speeds of sellers are not uniform. That can surprise consumers in a bad way. Making a marketplace work smoothly means drawing on many suppliers simultaneously and making it seamless for consumers – that’s hard to do.
Big brands also started to sell their products on the marketplaces too. They are using these places like another channel to reach the customers. It does not mean that they stopped their own e-commerce website, they are still selling their products on their own websites too. For example, you have a t-shirt brand and are selling your products on your own branded e-commerce website. You are not going to get attention while a customer does not visit your website. If you also sell your products with your own brand on a marketplace besides selling the products on your own website, you will get a customer’s attention even it does not know your brand.
Marketplaces get higher traffic and customers, because of this reason they have a high potential for earnings. As a merchant, when you want to sell your product on a marketplace, you do not have to take care of the software, systems, security and development activities. The operator of the marketplace spend millions on brand awareness and marketing, you do not have to do anything about these processes. They provide a seller dashboard that helps the merchants to manage their store easily. Also being a part of an established online marketplace provides a high level of trust between a seller and a buyer.
We have great know-how about ecommerce and marketplace. If you want to have your own marketplace, contact us! You focus on your business, technology is on us.