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Types Of Marketplaces

 

There are three types of marketplaces:
1- vertical marketplace
2- horizontal marketplace 
3- global marketplace

1 – vertical marketplace
A vertical marketplace sells products from many sources but they are all of one type. For example, TrueFacet.com sells only jewelry and related products. The site does the important job of guaranteeing authenticity and because jewelry is such a high-ticket item, that’s an important value-add. I recently met Tirath Kamdar, the Founder and CEO of TrueFacet, at a conference called ShopTalk, which bills itself as ‘the nextgen commerce event’ for retailers. Kamdar believes TrueFacet is ‘creating the VIN of the jewelry industry.’ By giving each piece of jewelry a unique identifier when it’s listed on the site, TrueFacet adds value by verifying the authenticity of a product.

 

vertical marketplace

2 – horizontal marketplace
A horizontal marketplace sells products of many types but they all share a characteristic. For example, Panjo,  another presenter at Shoptalk, is a marketplace for enthusiasts. According to Chad Billmyer, Panjo’s CEO, ‘belly dancer enthusiasts behave the same as Porsche enthusiasts.’ By providing community, infrastructure and data, Billmyer believes Panjo will drive traffic for people to pursue their passions and buy and sell from each other at the same time.

 

horizontal marketplace

3 – global marketplace
A global marketplace sells everything. The ultimate example of that is eBay. (Full disclosure: I’m an avid eBay shopper. As I write this article, I am wearing this suit available from Saks for $3895 plus tax. I bought it new with tags on eBay for $1100.75. Most of what I wear is a similar story. I have bought and sold five cars on ebay and hundreds of other items, all at great values and with very little grief or frustration.) eBay has 167 million users, over 1 billion items for sale, more than 80% of the items are new, and this year will sell almost $90 billion worth of product. Their appeal is their breadth of product. Bob Kupbens, VP of Seller Experience at eBay, said at Shoptalk, ‘scale gets you transparent pricing,’ if there are enough things being bought and sold, users can see what a fair price should be and they feel like they’re getting the right value. Kupbens also pointed out that an environment like eBay, ‘polices itself because there’s a community of people in a more efficient marketplace.’

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Marketplace vs Online Store

A marketplace is a platform where vendors can come together to sell their products or services to a curated customer base. The role of a marketplace owner is to bring together the right vendors and the right customers to drive sales through an exceptional multi-vendor platform – sellers have a place to gain visibility and sell their products, and the marketplace owner earns a commission from each sale. An online store, on the other hand, is a single store selling its own products online. All marketing and operations are managed by the company that owns the website and products.

Marketplace vs Online Store

Marketplace owners do not own the inventory their platform sells, unlike online store owners. The marketplace owner, therefore, leaves the more operational side of the business to vendors while focusing mainly on promoting their marketplace brand with a view to driving traffic to the platform and converting site views into sales.

 

Online Store

Examples for marketplaces are large companies with huge inventories like Amazon, Rakuten or eBay or niche platforms like Etsy (handmade crafts), Runnics (sportswear for running) or Shop.Surf (Surf & Skate gear and fashion). In contrast, an online store is just one single company, such as Zara, Apple or Nike, selling its own products online via its own online shop.

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The benefits of an online marketplace

Some sellers and small businesses think that selling their products in a marketplace is cheaper than designing a website and searching for software tools that manage several e-commerce platforms. Watch out! This can be the case for brands with a tiny catalog and a very focused audience. But a marketplace is also an investment for any professional company and brand. And it’s necessary if you want to squeeze all their benefits!

marketplace

An online marketplace gives you the following benefits:

Digital visibility: A lot of shoppers use marketplaces as their main search engine and this way you can make your presence across more channels grow. In addition, customers feel more confident buying products in online marketplaces.

 

digial marketing

Diverse customers: Your loyal clientele knows your brand and will continue recommending it, but it’s a profile that you have studied in detail beforehand. What if you could reach buyers that you have never crossed paths with before, or try new demographic niches and discover new sales opportunities?

 

Diverse customers

SEO reinforcement: You must monitor your website’s SEO all the time and it’s not advisable to change your copies and designs too often. But you can test keywords and ad campaigns with your product listings and discover what attracts the most traffic in a marketplace!

SEO

Easy management: Adding more sales and distribution platforms to your omni-channel e-commerce strategy is not a problem thanks to marketplaces’ support (they can storage and ship your products if you like). And don’t forget tools for Product Information Management (PIM) that automate the bulk upload of product information to your marketplaces (we are a PIM and we configure any marketplace connector you need. This way you can be sure that the catalog and stock data are uniform across all your channels at the same time.

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?What is a Marketplace

According to Lengow, over 60% of sales already happen through marketplaces, and some of the most successful companies worldwide (Airbnb, Amazon, Uber) operate under this model.
On the surface, it may seem like marketplaces are much more complex than other, similar businesses, due to their nature as multi-vendor platforms. The truth is the marketplace model is surprisingly lean and scalable for new startups.

 

Marketplace

You’ll understand it with an example.

marketplace is a virtual shopping center that works as an intermediary between buyers and sellers.

Think about what a physical shopping center really is. It’s place where thousands of clients go because they find it convenient to shop in one place with a variety of stores. It’s also a place where, as a shop owner, I’m interested in being because there are lots of customers going there every day.

A marketplace is the same thing in the e-commerce world. Sounds intriguing

 

Marketplace

Amazon is the mother of all marketplaces and the must-mention benchmark when it comes to this topic.

Talking about marketplaces means talking about Amazon, the most famous one in the world. there is life beyond the giant that is Bezo’s famous shop. 

 

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