Today, Marketplace Websites are redefining the shopping attitude of people. A Marketplace is an e-commerce website where it buys and sells various products. Consider an online Marketplace as an open warehouse where the products are sold even without making a special place for them to store in the inventory.  It depends on the type of Marketplace but, today all the global marketplaces are turning into an entity of merely a transaction where there is no inventory of their own and where the products get shipped directly from the retailer. As it saves a lot of money, Marketplace apps are gaining a strong momentum in the present day Digital World.

To explain this better, consider a warehouse packed with products. You can only sell what is stored in your warehouse no matter how big or small. Now, consider an online warehouse where there is no physical space present. Each retailer that is signed up with the online marketplace is offering a product to be sold on the channel that they choose from their personal warehouse. As much popular will be the marketplace better the chances for the sale and, that can go global with free shipping or other such facilities. It depends on the type of marketplace and the resources they have that can help the buyer and seller by keeping track of the needs from both the perspectives.


E-commerce and Marketplace is not the same!

There is a very thin line between the two. A marketplace is an e-commerce website but an e-commerce platform is not necessarily a marketplace. An e-commerce platform is a single brand and a single entity where they have their own inventory. There can be multiple brands that an e-commerce website signs up with but the platform itself will have a single identity dealing with various products sold. Anything that is sold on their website, if there are sellers involved, the products will go through their inventory and there will be no third party involved, unlike online marketplaces.

To be precise the difference between an online marketplace and e-commerce is that in case of the owner of a marketplace website third-party sellers are allowed to invoice the customers directly. In marketplace websites, the owner will not directly invoice the customer as it is a platform which allows the sellers to advertise and sell products directly to the customer. It becomes a network of selling and buying. In the case of an e-commerce platform, the owner is linked directly with the invoice of the customer and the sellers have no right to sell the product to the customer directly. Everything goes under the supervision of the e-commerce website.

Basic Differences between Online Marketplace and E-Commerce platform:


Marketing Standards: There are different approaches involved when one decides to own and facilitate e-commerce or online marketplace. The benefit of owning a marketplace website is that the buyers and sellers don’t have to spend much and because there are wide options and range available it benefits both the seller and the buyer. In the case of e-commerce platforms, the seller or the merchants have to spend more money to popularize their products on the website. Also, it depends highly on the demographics and the user interest for the success of an e-commerce website. Though this rule applies to online marketplaces as well, the risk is lesser as usually like any super mall it becomes a hub of selling not one but many types of products which keep the growth steady.


Financial Risks: It is obvious that in the case of Marketplace as there is no inventory involved they do not have to worry about stocking products, unlike e-commerce platforms. In the case of e-commerce websites, the vulnerability regarding supply and demand is quite high. If we think from the perspective of Marketplaces then they do not have to worry about stock because only those products are features that the retailer is buying and in case they need more buyers for a particular products category they can easily hire more vendors. No matter how big their market grows, unlike e-commerce, they don’t have to worry about investing in creating huge storehouses to keep the stock. As maintaining inventories are another issue so financial risk is higher in the case of e-commerce websites. They have to stack the products and wait for it to sell. This takes time and money more than one might anticipate.

For any Businessman the above two factors are prominent aspects to work. It sets standards in the market where one can enjoy a good online presence with a Business Reputation that helps a customer to trust and invest with the services. To help you in better we at Intellisense offer IT Outsource Services in Jalandhar.


Let’s understand the types of Online Marketplaces:

There are three basic types which are vertical, horizontal and global marketplaces. In the case of Vertical Marketplace, there is one type of product involved but there can be many sources involved to sell that kind of product. It can be service oriented or directly dealing with selling or buying. Airbnb is one of the best examples of a Vertical Marketplace which involves renting of accommodations. Another such example is UrbanClap which deals with beauty salon and treatments.

Horizontal Marketplaces sells many types of products but all share a common characteristic. Etsy is the best example of a horizontal marketplace. The whole idea of the website is to promote only handmade good and handicrafts of various kinds. Today, it sells all sorts of products on the website but all are handmade where from jewellry to clothing and even cosmetics products are prepared by the vendors themselves. Another such website is Panjo which is a marketplace for enthusiasts alone where you can buy and sell unique items.

Global Marketplaces as the name suggests works in all niches available. There is no limit or restriction. It expands into various categories and often turns out to be the most loved websites from the customer point of view. It is always a good investment to create a global marketplace app where the user can buy or sell anything at one place. It saves both time and money. Ebay, Amazon, Flipkart is one of the big names ruling the online market. Create online Marketplaces as there are low risk, steady growth and income and also gains popularity much faster than an e-commerce website.

We at Intellisense provide with IT Outsource Services in Jalandhar, India. Contact us to get the quote!


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