The online marketplace model has been around since the early days of the internet. The format first rose to popularity because it offered consumers a wide range of products that were easily accessible in one place. But the online marketplace model has seen a resurgence in recent years. Specialist sites now offer online marketplaces for all sorts of niche products and interests.
An online marketplace is a type of ecommerce store where products are listed and sold by a selection of third-party vendors. Examples of online marketplaces include Amazon, eBay, and Etsy.
Most online marketplaces share common characteristics that distinguish them from other ecommerce shops. These characteristics include:
These features generally make the shopping experience more interactive. They also help instill trust that the customer will get what they're paying for, which can sometimes be a concern with online marketplaces. This is because buying from third-parties is riskier and less reliable when it comes to product quality and customer service.
The online marketplace format has risen to popularity because it offers a variety of benefits to sellers and shoppers alike. Firstly, online marketplaces allow sellers to reach a large potential customer base without having to spend lots of money to set up their own online sales infrastructure. They do have to pay a fee for selling on the online marketplace, but that’s more than offset by increased sales.
Secondly, it’s a lot easier to sell via an online marketplace. After a simple application and verification process, sellers can sell their goods and services via the existing platform infrastructure. Listing products and changing pricing is all managed by an easy-to-use seller account/backend software.
Shoppers, on the other hand, get a huge selection of products on one, easy-to-use platform. It’s much easier to find what they’re looking for, even if it’s a specialist product. Online marketplaces are often able to offer products at cheaper prices.
Meanwhile, customers also benefit from various buyer protections that ensure they get what they pay for. And, they often benefit from more efficient logistical infrastructure, which provides quicker, cheaper delivery.
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