Vertical Ecommerce Marketplaces Overview

Vertical Ecommerce Marketplaces

A vertical marketplace is an online platform where vendors sell their goods and services specific to an industry, profession, trade or a particular group of customers with specialized needs. Ecommerce giants like Amazon, Wal-Mart and eBay are struggling to keep pace with what vertical marketplaces like Uber, Odesk, Airbnb, and the likes are bringing to the fore. These ecommerce giants serve several industries and carry a plethora of products and services, which may or may not relate to a particular industry.  

Vertical Marketplace Share

vertical-market-share

Ecommerce businesses using vertical marketing should be able to exhibit their products and services better. A user experience (UX) that highlights the special features of the product category is developed with the help of a vertical market because it emphasizes one, or few, product categories. Vertical e-marketplaces grant online access to businesses vertically up and down in every segment of a certain industrial sector, for instance, chemical, textiles or automotive. When you use vertical e-marketplace to purchase or sell products, it not only assists in lessening the supply chain costs, inventories and procurement cycle time but also helps to boost the operating efficiency of your industrial sector.

Vertical Marketplace in Ecommerce

vertical-marketplace-in-ecommerce

The businesses that use vertical ecommerce are specialists. For instance, an ecommerce website that only markets sports gear is a vertical ecommerce business. Or a designer of fabrics should incorporate photos of how the tailors work on an outfit. Likewise, an online grocery store should be able to write product descriptions that are more suitable for items of grocery.

Why is Vertical Market Place Beneficial For Both Consumers and Merchants?

A particular business concentrates on catering to the specific requirements of the customers. When you look from the viewpoint of a customer, then identifying vertical markets will make the process of purchasing easy.

Advantages of the vertical marketplace:

  • When one looks at it from the perspective of advertising, then, vertical markets are preferred more. This is so because they enable the planners to create a single, centralized advertising effort. This centralized effort can be then established across the board.
  • Vertical marketplaces are also chosen by the businesses themselves because their presence enables the companies to concentrate on niche products, and when they do so, they prosper. The product or service of a particular company can be easily perfected more easily when a company is allowed to specialize. This can even make them dominate the market.
  • When businesses turn to specialization, many a time, the competition is lessened because of their specialization. This eventually results in the inability of the market being able to support a higher price for a particular product or service. While some specialized markets are crowded, businesses usually aim at verticals where there exists an opportunity to innovate and provide something different.
  • From the perspective of marketing, the lesser the competition is, the quicker and cheaper it gets to receive exposure in organic search results (SEO) and paid keywords.

Factors To Consider Before Entering A Vertical Market:

What may seem as the principal advantage of the vertical marketplace can also turn out to be its disadvantage. This is so because having a small base of the customer means having limited potential for the generation of revenue. Furthermore, being a specialized business can lessen the number of potential customers who are looking for their desired products or services on the internet. Thus, before entering a vertical market, businesses should know that a focused vertical has fewer interested consumers. Whereas, on the other hand, ecommerce websites are capable of focusing on a large number of customers. However, the key is to seek out a successful and profitable vertical marketplace that has the potential to develop, too.

Difference Between Vertical Marketplace And Horizontal Marketplace:

A vertical marketplace, as mentioned above is a business niche where sellers cater to an audience that is specific. It also serves the particular set of needs of customers. With technological advancements, the concept of vertical markets is frequently getting used through ecommerce businesses. This is because of two factors, one being minimum expenses and the other being capacity to communicate to a large audience throughout the globe.

Vertical Marketplace vs Horizontal Marketplace

vertical-horizontal-differences

On the other hand, a horizontal marketplace is open to a large number of people, notwithstanding their interests, industry or distinct niche. It sells products from a large number of categories. Generally, online businesses involve verticals in targeted marketing or outreach campaigns. The most famous horizontal e-commerce business is Amazon.com. It sells books, furniture, food, grocery, apparel, toys, software, music, gadgets, and a whole lot more.  Horizontal ecommerce businesses present themselves as a one-stop shop and communicate convenience as a strong benefit. They also tend to find supply chain or scale advantages that help them offer great prices.

Future of Vertical Marketplace:

The age of vertical marketplace has recently started, and it has been continuously used by entrepreneurs throughout the globe building companies to support these foundational behaviors. With a thorough understanding of the market and an accurate business strategy, an online business can enter and expand in a vertical market, by enjoying success along the way.

Scroll to Top