What is Marketplace? – Types, Advantages, and More
The Marketplace refers to a broader concept of online sales. On this platform, different stores can advertise their products, thus offering customers a range of options.
The concept of the Marketplace is not new. In Latin America, it emerged in 2012, and today, many large digital companies have already joined. Some examples of Marketplace are Amazon, Google Shopping, and Mercado Libre.
As we have already said, there are several differences between a Marketplace and e-commerce.
In the case of an e-commerce, you enter the website of a store X and choose a product sold and shipped supply itself
A marketplace is a great platform where different brands, companies, or stores can sell their products or services. Or, put another way, a kind of online shopping mall. This business model is not new, nor is the concept itself since a marketplace is simply an intermediary between sellers and customers
Types Of Marketplace
- Taking into account what a marketplace is, there are currently up to three types:
- Product : the platform used to sell and buy any material good.
- Services : As its name suggests, this type of Marketplace offers services, such as hotel reservations or ticket purchases, among others.
- Labor : when the platform connects companies with professionals or vice versa.
- General : You can find products from different categories in this type of Marketplace.
- Vertical or niche : This Marketplace specializes in a specific category.
A marketplace is a large store of stores. It is a distribution platform where e-commerce offers its products and services the same way offline shopping centers do with products and services from physical stores.
It is curious, but the English word marketplace translated literally means market. We have adopted it to call electronic needs or e-marketplaces when the term ” online marketplace” is commonly used to differentiate it from the Marketplace (physical market).
Difference Between Marketplace And Ecommerce
A marketplace is a platform that serves as an intermediary between sellers and customers. In other words, you can find numerous brands and stores whose products or services are sold through this website and not directly through them.
On the other hand, when we talk about e-commerce, we refer to a web page that belongs to a brand or store, which is fully responsible for the sale of its product or service and sending it to the customer. In other words, we would be talking about direct contact between the seller and the client in this case.
How does a Marketplace Work?
The action of a marketplace is simple, and even though it can vary from one to another. Most marketplaces work in a very like method.
In general terms, a marketplace’s action is based on sellers having a profile that allows them to upload harvests within the platform. A brief account of the product and photographs, the category it belongs to, and information that may be useful to the buyer.
Advantages of a Marketplace
Marketplaces have many significant advantages, especially when compared to traditional physical commerce.
Some of the most important are the following:
- They constitute a sales channel that reaches all audiences since they can access anywhere globally. You only need to have Internet access.
- They adapt to both online and mixed businesses (online and physical sales). Selling in a does not mean that you cannot also have a physical store, so, in reality, it can be a complement to traditional sales.
- It is also sold exclusively online. It allows some businesses to do without having physical stores, which considerably reduces the fixed expenses associated with their economic activity.
- You do not need to have your online store, but you use the platform.
- Using the marketplace platform provides greater security and confidence in the transactions that are carried out. It usually has a significant influence on customer satisfaction.
Disadvantages of a Marketplace
Although selling through a offers many advantages, it is also true that it has some drawbacks or limitations that should be taken into account.
Some of the most important are the following:
- The purchase is not immediate. When buying online, the product takes time to reach the consumer. It may only be a few hours or a few days, but it will always be necessary to transport the product in question from the distribution center to the address indicated by the customer.
- They require logistics processes for deliveries. Because the product must take from the warehouse to the customer, it is necessary to have a logistics team or outsource the service to take care of this activity.
- Payments are not immediate since they manage done itself. It means that, in many cases, the seller receives the money accumulated from sales on specific days of the month and not as sales are complete
When understanding a marketplace, the most important thing is that it is not an online store. An online space where many sellers offer their products to potential buyers.