In a world of trade, the term ‘marketplace’ is used to describe the arena of competitive commercial dealings. Speaking of online marketplaces, they’ve come to describe ecommerce websites or online stores that connect three parties, such as buyers, marketplace sellers, and operators, and multichannel commerce platforms, where product and service information is supplied by third parties.
How To Sell on Marketplace?
The algorithm for selling on a marketplace depends on what type of marketplace that is, including policies it uses, the industry it belongs to, and other factors that might influence the trading process. However, most online marketplaces follow the simple logic: if a vendor is not invited to participate in a marketplace but applies to be considered, then it fills out the form, passes onboarding and verification procedures, uploads its products with images and descriptions to the catalog, and waits for its first interested buyer.
How Do Online Marketplaces Make Money?
There are a few ways marketplaces typically make money, such as via:
- Subscription fees
- Listing fees
- Transaction and online sales commission fees
- Marketing and advertising services
- Fulfillment and logistics services
- Financial services
- Affiliate and partner programs
- Referral and lead generation fees
- Selling data
How To Create an Online Marketplace Like eBay?
As mentioned above, you need to have a mature digital solution first before attempting to build a marketplace of your own. Your ecommerce platform needs to be flexible, extensible, composable, and API-based. A good online marketplace also needs to have the following features to be able to attract potential partners and buyers and compete with marketplaces like eBay:
Of course, an ecommerce business requires investments. You need to pay developers, designers, and marketers to get you started.
- Basic online shopping functionality like product listings, shopping cart, search, popular payment methods, support chat, admin dashboard
- Complex account and user management with permission and access levels; catalog management and complex pricing mechanism
- One-click ordering, quick reordering, wishlists, ratings, reviews, payment reconciliation, notifications, and reporting are all highly desirable
How To Build an Online Marketplace?
As mentioned above, building a marketplace starts from either choosing a reliable ecommerce solution or developing one of your own websites. When choosing an ecommerce platform, ensure it is flexible, composable, extensive, cloud based, and supports integrations via APIs.
How To Choose Marketplace To Sell Online?
Start with selecting a few marketplaces that target your desired market. Then narrow down your choice to a few marketplaces that have well-defined seller policies, good reviews, and reasonable commissions.
What Is an Example of an Online Marketplace?
eBay and Amazon are good examples of popular online marketplaces.
What Is the Largest Online Marketplace?
Amazon is the largest online marketplace in the world, attracting almost five and a half billion visits per month. Ranked by financial data, Taobao and Tmall are the world's largest online marketplaces with Gross Merchandise Value (GMVs) of $490 billion and $464 billion respectively.
What Is Cloud Marketplace?
A cloud marketplace, otherwise called SaaS marketplace, is a type of application marketplace where buyers come to a virtual storefront and search for, buy, or manage cloud applications. A good example of a cloud marketplace is AWS Marketplace where shoppers find and use software and services run in Amazon Elastic Compute Cloud.
What Is a B2B Marketplace?
A B2B marketplace is a marketplace that connects three parties – buyers, sellers, and operators – where both buyers and sellers are businesses. Good examples of B2B marketplaces are Amazon Business, Alibaba, and IndiaMart.
What Is Peer to Peer Marketplace?
A peer-to-peer marketplace is a decentralized marketplace whereby two individuals interact with each other to buy or sell goods or services. Good examples of peer-to-peer marketplaces are Uber and Etsy.
How Many Online Marketplaces Are There?
While it’s hard to give definitive estimates as to the number of online marketplaces in the world, it’s safe to assume that there are way more than 100 and the number keeps constantly climbing.
How Much Does It Cost To Build an Online Marketplace?
The cost of building a marketplace varies greatly and depends on multiple factors: from the complexity of the ecosystem you want to build to where you and your employees are located (think salaries and overhead expenses). Generally, the cost varies between 40,000 and 500,000 dollars.
Why Online Marketplaces Are Booming?
We have written an interesting article on the topic The Marketplace Revolution, where we discuss the factors that contributed to the widespread growth, adoption, and popularity of marketplaces, and we encourage you to read it.
To put it shortly, marketplaces offer multiple advantages for all involved parties: buyers benefit from the abundance of choice, sellers – from the lower cost of entry into the market, and operators – from monetizing the marketplace platform, gathering valuable customer data, and building entire ecommerce networks.
What Is the Best Marketplace Website?
Different marketplaces are “the best” for different reasons. Thus, Amazon might be the best marketplace for people in the West, while people in the East might prefer something entirely different like JD.com or Pinduoduo. Depending on what you want to buy and where you are located, you might have your own “best” marketplace.
What are the top product categories for selling on the marketplaces?
The top product categories are typically fashion, books, arts and crafts, homewares, tech products, and electronics.
Top Tips & Steps for Online Marketplace Success
As mentioned above, to get more sales from a marketplace, you need to follow the steps:
- Explore multiple marketplaces and choose whichever offers the best bang for the buck: it might be a marketplace with more monthly traffic, a good partnership program, or fewer fees.
- Perform all the necessary integrations with your internal systems first, so you have up to date inventory on the website.
- Describe your products as adequately as possible (pay attention to every detail and include high-quality images).
- Be clear about your prices: if you need to ship inventory for a fee, then clarify that your prices exclude the cost of shipping.
- Invest in customer care and collect feedback on a regular basis.
What is a final value fee?
The final value fee, usually used in the context of eBay, is the percentage based on the total amount of the sale and the category of item.
Which marketplaces have a vast global market share?
Amazon and eBay are good examples of marketplaces with a vast global market share.
What are the top marketplaces by monthly traffic?
According to Statista, the top retail websites worldwide by monthly traffic are Amazon, eBay, Rakuten.co.jp, AliExpress, and Walmart.
What are the payment processing fees?
Payment processing fees are the costs business incurs when processing payments from customers. Payment processing fees usually vary depending on the risk of a transaction, type of card, or pricing model preferred by the payment processor.
Is there a difference between gross merchandise value and gross merchandise volume?
Gross merchandise value is the same as gross merchandise volume, that is the total monetary value of total sales which is typically calculated as the total sales multiplied by the take rate (or the average commission the e-commerce merchant charges on each sale).
How do online seller fees range from marketplace to marketplace?
The commission depends on many factors, but it typically falls between 3.5% and 20%. Many sellers claim to pay 20% for marketplaces like Uber and Lyft, while those selling on Etsy seem to pay less than 4% on average. The variations can be really huge.