A marketplace is an online space created to gather and accommodate a number of vendors and customers where they can interact as equals (when both sides are private individuals or business representatives) or develop a hierarchy “entrepreneur-client.” There are three basic business models:
- B2B (business-to-business) — Business marketplaces
- B2C (business-to-customer) — the businesses sells to its clients.
- C2C (customer-to-customer) — only private individuals offer and make orders, not entrepreneurs, equal communication
There are different types of online marketplaces based on their business models or their method of business operation. Here are the existing types of e-marketplaces:
1. B2B (business-to-business) — Business marketplaces
In B2B marketplaces, businesses sell to other businesses on beneficial terms. It is a business to business online marketplace platform operated by a third party (marketplace owner) and is open to the buyers and sellers from a particular industry. Some popular examples of the independent B2B marketplaces are Alibaba.com, eBay.com, etc. that allow manufacturers and the wholesalers to buy and sell on their platform.
Depending on the platform content, B2B models can be of two types:
- Vertical online marketplace (refer to only one segment of the industry) – Vertical marketplaces provide online access to businesses vertically across every segment of a particular industry sector such as automotive, chemical, construction or textile. Buying or selling using Vertical marketplace helps increase the operating efficiency while decreasing the supply chain and inventories cost and procurement time.
- Horizontal online marketplace – A horizontal e-marketplace, on the contrary, suggest service in different industries connecting buyers and sellers across different industries or regions. It allows the buyers to purchase indirect products such as office equipment or stationery.
2. B2C (business-to-customer) — the businesses sells to its clients.
The B2C marketing model allows entrepreneurs and their customers to interact with each other. The advantage of such a platform is that you find everything you need and a wide variety of commercial offers on one website.
For example, AliExpress is a huge multivendor marketplace platform with many vendors offering their goods, working with the B2C model. The platform is visited by more than 525 M users monthly and find offers from companies-producers: from clothes and household appliances to cars and bikes.
3. C2C (customer-to-customer) — only private individuals offer and make orders
C2C marketplace models are also referred as P2P: peer-to-peer, or person-to-person, presuming that there are no entrepreneurs and all the participants are equal. They have similar interests, income, are about the same age, and go to the web platform to share something with others. This helps the buyers to lower their administrative costs and get best prices from the suppliers. The suppliers can also use the buyer-oriented marketplace to advertise their product to the set of relevant customers.
Comparative table of the C2C, B2C, and B2B business models
Besides the marketplaces mentioned above, there are also C2B business models (customer to business). It can be a freelance exchange house where private specialists offer their services to different companies.
Our eCommerce experts can tell you everything about the development of an online marketplace. You can find the complete information about developing an online marketplace on Rocket Bazaar Base Suite. Also, find examples of marketplaces in our portfolio and don’t hesitate to contact us.
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