The online marketplace is a web-based platform that connects buyers with third-party sellers. As opposed to an eCommerce platform in which the owner of the website is the sole vendor of the products offered on the site. An online marketplace allows independent sellers to display their products and communicate with buyers.

There is a myriad of distinct kinds of marketplaces online. Certain are general-purpose websites catering to sellers and buyers of all kinds, while others concentrate on particular areas or verticals, like the gaming industry, or handcrafted items.

Certain cater to specific geographical areas, while others are available worldwide. Some marketplaces on the internet also offer sellers other services, such as fulfillment services however, others are restricted only to matching buyers to sellers.

Marketplaces on the internet account for an enormous portion of the overall for eCommerce. They made up 57% of the total internet-based sales by 2022. In the same year, the most popular online marketplaces earned approximately $1.97 trillion in revenues.

The benefits of online marketplaces

Benefits that come with using these online platforms are:

Simplicity

Through an online marketplace, vendors do not have to create their eCommerce websites. They can utilize virtual storefronts provided by the marketplace online.

Exposure

The largest, well-established online marketplaces attract large crowds -For instance, Amazon receives more than 200 million unique visitors each month. Sellers who participate in an online marketplace are exposed to a wider public.

This is an essential advantage for smaller stores particularly since they could struggle to attract significant customers to their eCommerce websites.

Additional services

Certain marketplaces offer sellers additional services such as drop shipping or fulfillment services. These services can be handy for retailers selling online who do not have the resources to handle these operations on their own.

Although you can get these services from independent firms being able to combine them on an online marketplace makes it easier to manage the retail process.

Repeat business

Connecting with buyers through the internet, vendors boost the likelihood of returning customers. Buyers who have a positive purchasing experience are likely to return to the same site frequently to buy a variety of goods.

It’s more difficult to build a repeat business on a smaller, uninvolved eCommerce site with only a small selection of items as customers are less likely to frequent the website regularly.

SEO benefits

The most popular online marketplaces are well-indexed in search results. Therefore, it’s generally easier to direct users to a storefront on the online market. 

Compare that to the challenge of creating a strong SEO for a smaller independent site that does not rank so highly in search results.

Tips to choose the right market for your business

Online marketplaces are excellent assets for eCommerce businesses. To know how to start an eCommerce business, click here.

The most important aspects to take into consideration when deciding on an online marketplace are:

Brand recognition

Try to locate a market that is well-known by the people you want to target.

Pricing

Be sure the costs you’ll have to pay the marketplace’s provider are in line with your financial and profit targets. Equally important, you should make sure the pricing plan is appropriate for you. 

For instance, if you don’t have a lot of money to pay for the market then you might be better off with an online marketplace that costs no upfront costs and instead, takes a portion of the profit earned from each sale you make. 

In addition, some marketplaces offer fewer commissions, but charge charges upfront to register or to advertise products.

Top Online marketplaces 

Amazon

While Amazon sells products directly via the website it permits third-party sellers to sell their items to create a vast online marketplace. Being the biggest eCommerce site worldwide, Amazon enjoys unparalleled brand recognition and a high rate of online traffic.

Alibaba

While Alibaba is sometimes referred to as”the “Alibaba to amazon fba“, the eCommerce site is currently operating in over 200 countries across the globe and is the biggest online marketplace for B2B sales.

eBay

The traditional model of sales on eBay is based on placing items for auction however, the site lets sellers fix price limits for their goods so that they can avoid auctions.

Etsy

Etsy is an excellent instance of an online marketplace that focuses on a particular niche of commerce that includes artisanal crafts and lifestyle items.

This narrow scope makes Etsy a lower overall impact in the eCommerce space than other larger websites that have a revenue of approximately $800 million.

The strong relationship of the site with products made by hand is ideal for creatives, artists, and others who are looking for the best way to conduct business online.

Recommended Guide: Why amazon product research is important for your business in 2022. this dedicated guide gives you brief information about the product research and best-selling products on amazon.

Alternatives to Online marketplaces in 2022

If you decide that an online marketplace isn’t the best option to reach your goals with e-commerce, then your best choice is to set up the store yourself. Also, running your own store will provide the ability to build it according to the best way that fits your needs.

This also increases the margins of your profits because you can not pay commissions or fees. It also means that you do have no restrictions on what kind of products you can offer or the way they appear on your website.

Another option to go with marketplaces on the internet is to take part in a local market. If you are selling homemade products for food and produce, a farmer’s marketplace will enable you to connect with customers in a similar way to that of an online market.

Additionally, selling products at a fair for crafts could be an alternative to websites similar to Etsy. There are, however some major drawbacks with these options. The exposure you have to customers when operating in a physical store is much less than.

Online Marketplaces offer a variety of advantages, however, they’re not the right choice for every eCommerce strategy.