What is an online Marketplace?
A marketplace is an eCommerce website where you can find a variety of products from different brands coming from multiple vendors, shops or person showcased on the same platform. The marketplace owner is responsible for attracting customers and the processed transactions, while the third party vendors deal with the manufacturing and shipping. The primary entities of a marketplace model are the marketplace owner, sellers and the customers.
Online Marketplace streamlines the business operations through one simple portal, where the vendors and manufacturers sell their products directly to the consumers, therefore avoiding the stagnant process of stocks holding.
Big companies like Amazon and eBay have experienced massive success in the eCommerce marketplace business model. This Omnichannel model has so far proven to be the most profitable business in web eCommerce. The entire marketplace runs on one software infrastructure, allowing all the vendors to sell their goods under the umbrella of one website. Regarding revenue, these companies take a percentage of the sales of any product sold across the platforms.
The Role of Marketplace Owner, Buyers and Sellers in a Marketplace
An online marketplace has three entities: the store owner, buyers, and sellers. The store owner allows multiple vendors add the products on the portal and the customer/buyer will buy the products. In the marketplace, the buyer is looking for the lowest possible price, while the seller is aiming for the highest possible price and the commission charged per transaction will benefit the store owner.
How do Marketplace Entities Benefit?
Business Benefits:
Benefits for Sellers:
Enables oversea sales by providing opportunities to trade in the international e-marketplace.
Benefits for Buyers:
The buyers can find established and trusted vendors and build a strong relationship by dealing exclusively with them.
Ending Notes
The most important challenge for a marketplace is to attract the sellers and buyers to trade; the second next critical problem is to turn them into active users of the platform over a long haul.
That’s why marketplace owners should always come up with new ideas of how to keep the sellers engaged for a long time, and at the same time increase their customer base.
Do you want to launch your own marketplace? Check out a live demo of our ready-to-use marketplace solution ‘Rocketbazaar.’
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