Ecommerce Marketplaces: The Next Big Thing

  • Marketplaces Image

Ecommerce Marketplaces: The Next Big Thing

ECommerce Marketplace imageYou’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.

Mall photo

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)
Amazon Screenshot

Amazon is perhaps better known than anyone for their amazing user experience.


Buyers have taken a leap by abandoning shopping in-person and dealing with established sellers, meaning that the marketplace itself must provide the missing trustworthiness, both in relationships between buyers/sellers and the marketplace, and in relationships that buyers and sellers have with each other. When expectations are violated on either the buyer or seller side, successful marketplaces often reach out to the user.

Machine Efficiency with a Human Touch

Shoppers these days want the best of both worlds. We are giving up physical stores for:

  • Savings
  • Speed
  • A computer’s infallibility
  • Greater selection

Having all these facilities at a click away, we still like having it run by a human on the other side. For example, Threadflip, a marketplace, which allows women to sell their clothes online, conducted research that showed that people don’t want to wait for more than 10 days for their clothes to be delivered. To address this problem, they send reminder emails out and inform both buyers and sellers of this implicit expectation. They also send out shipping labels to help ensure this fast shipping.

Social Proof

Social proof (in the form of positive testimonials, seeing faces, and best of all, word-of-mouth) can tell buyers that a service is reputable and sellers that the marketplace can be lucrative for them. A good rule to follow is that people trust social proof to the extent that they know the people that are providing it.

Curated Content

One reason customers often come to an eCommerce marketplace is so that they don’t have to wade through low-quality merchandise/services elsewhere. Great marketplaces often use star rating systems and an in-house team or crowd sourcing to downgrade or weed out inferior products.

Support for Sellers

In contrast to the old model of focusing all a company’s attention on the end-user’s experience,  attention must now be paid to ensure a positive experience and economic empowerment for suppliers. Here are a few best practices that help there:

  • Ensuring that fees are low enough for good profit supplier-side
  • Creating forums/spaces for suppliers to share best practices
  • Guidelines from the company itself on how to be successful
  • Providing sellers with analytics to make better decisions

PROS has developed a white label, fully integrated, and complete end-to-end marketplace platform suited to any vertical. It incorporates automated billing between vendors and the website owner, product inventory management, vendor profiles, and many other features and functions.

Please contact us if you would like a demo for your next eCommerce marketplace platform project.

By | 2017-08-14T16:44:51+00:00 August 14th, 2015|Blog|Comments Off on Ecommerce Marketplaces: The Next Big Thing

About the Author:

Deepak Wadhwani has over 20 years experience in software/wireless technologies. He has worked with Fortune 500 companies including Intuit, ESRI, Qualcomm, Sprint, Verizon, Vodafone, Nortel, Microsoft and Oracle in over 60 countries. Deepak has worked on Internet marketing projects in San Diego, Los Angeles, Orange Country, Denver, Nashville, Kansas City, New York, San Francisco and Huntsville. Deepak has been a founder of technology Startups for one of the first Cityguides, yellow pages online and web based enterprise solutions. He is an internet marketing and technology expert & co-founder for a San Diego Internet marketing company.