Definition of online marketplace
An online marketplace is an e-commerce site that brings sellers and buyers together in one place.
What does an online marketplace do?
An online marketplace is an e-commerce site that connects sellers with buyers. It’s often known as an electronic marketplace and all transactions are managed by the website owner. Companies use online marketplaces to reach customers who want to purchase their products and services. Examples of online marketplaces include Amazon, eBay, and Craigslist.
What’s the history of online marketplaces?
Online marketplaces have been around since 1995, when eBay and Craigslist were founded. eBay launched and became a place that brought sellers and buyers together in an auction setup. Nowadays, there are countless online marketplaces from sites like Amazon, Etsy, Alibaba, and bol.com.
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What are the benefits of an online marketplace?
The biggest advantages of an online marketplace and the reasons many businesses sell via online marketplaces is that:
- It is an additional source of revenue.
- It cuts marketing costs.
- It allows companies to internationalize its business.
- It creates transparency in availability, stock levels, and prices.
- It is a great way for customers to compare prices.
- It allows your company to function 24/7.
- It generates trust between your brand and customers.
- Customers are more likely to purchase from an online marketplace with a wide range of options.
- Businesses need to pay a fee/percentage of sales to the online marketplace platform.
- Selling via your own e-commerce site vs. via a marketplace.
Learn more about the benefits of an online marketplace in the blog Online marketplaces: Friend or foe?
What does the future of online marketplaces look like?
Today, marketplaces are growing at a very fast pace. Analysts predicted that worldwide marketplaces would account for 40% of the global online retail market in 2020. 75% of U.S. marketing experts say that by placing your business where your customers want to buy from will benefit your company’s revenue from selling via online marketplaces.
The future of your business’ success on online marketplaces is to focus on your niche and giving all customers that come via online marketplaces superb customer experiences.
Discover other B2B e-commerce trends for 2023 and beyond here.
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