You’ve probably heard of Uber, AirBnB, and Etsy, and almost definitely eBay and Amazon.What do these businesses have in common? They are all examples of eCommerce marketplaces. An eCommerce marketplace is a technology that is disrupting traditional eCommerce by allowing multiple sellers to use an integrated platform to market and sell their products or services online and/or through mobile apps.
Some benefits of eCommerce marketplaces include:
- One stop solution for sellers from accounting, shipping, and marketing, to payment processing
- Customers get more selection and better pricing
- Sellers have marketing and technology that saves them time and money
- There are little to no upfront costs for sellers
- Greater exposure to a global audience
- Larger demographic with the network and social effect
According to a recent poll, 64% of shoppers say that they first search for products they want to buy on eCommerce marketplaces. If they haven’t hit your industry yet, it’s likely they will soon. This doesn’t just apply to retail industries: Marketplaces can also be B2B (for example, renting construction equipment) or service/talent recruiting oriented.
The Beginning of Traditional Marketplaces:
Marketplaces started out as traditional shopping places including Indian/Egyptian bazaars and Greek agora centuries ago where people browsed and shopped from various sellers in one central location. This later evolved into huge shopping malls where people could purchase anything from children’s toys to high-end items all in one place, making it more convenient to shop.
The Next Step: The Beginning of ECommerce Marketplaces
In the online world, most people consider eBay as the first major eCommerce marketplace. When it started in 1995, suddenly items that people would throw out were fetching them considerable amounts of money. As buyers were more easily able to connect with sellers, goods that had commanded a higher price in stores suddenly commanded less as supply increased and competition became more stiff. Craigslist provided another leap, as people were now able to connect with locals to purchase goods or services in person.
For new competitors, the network aspect means, it’s hard to beat the major horizontal marketplaces at their own game. In these types of two-sided operations, having more buyers creates a bigger market for sellers, and having more sellers creates greater selection and lower prices for buyers.
Many of the next generation of eCommerce marketplaces are starting where Craigslist left off, taking it to the next level. People like the wide array of products and services that Craigslist has to offer, but also want more trustworthy and no-hassle ways to be connected with what they want to buy. Companies are taking one product or service Craigslist provides and making it more user-friendly.
Here Are a Few Examples of Popular eCommerce Marketplaces:
- Amazon, eBay, and Etsy: These big online shopping hubs revolutionized the sale of consumer goods in their own way. In addition to being a traditional eCommerce website, Amazon allows many other suppliers in many industries to feature their goods on its website. eBay facilitates the sale of over $200m a day of virtually anything from individual to individual, making it possible for anyone with a computer to become a millionaire. Etsy specializes in the sale of handmade goods, something that was very difficult before it came along.
- Uber and Lyft: These two companies have created a marketplace which allows independent providers of transportation services to leverage their platform to reduce the time as well as the cost to get a taxi.
- OpenTable: OpenTable allows users to reserve spots at leading restaurants worldwide.
- AirBnB, HomeAway, and Hostelworld: These marketplaces allow people to book accommodations from individuals’ homes to vacation homes and hostels worldwide. The ability to read reviews and compare prices makes these a go-to option for many travelers, and they often provide more satisfying stays than traditional hotels.
- And there are many more
Features of a Successful eCommerce Marketplace Include:
A Streamlined User Experience
Customers these days can find so much quality at their fingertips that the instant they see something questionable they start looking elsewhere. A few important elements that will keep them with marketplaces are:
- A seamless payment process
- Great introduction flows (for your website or app)
- Attractive design
- Easy browsing of products and services (on mobile if possible)