Online marketplace

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.

What is an online marketplace?

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.

What are the top online marketplaces?

Statista’s report on top online marketplaces shows that Amazon is the most popular online marketplace worldwide, averaging about 5.3 billion monthly visits. The second most visited shopping site is eBay, with roughly three billion visits. Here’s the list of top 10 online marketplaces:

  • Amazon

  • eBay

  • Shoppee

  • Rakuten

  • AliExpress

  • Walmart

  • Mercado Libre

  • Etsy

  • Taobao

  • Wildberries

What is the best online marketplace?

The findings of different reports show that Amazon is the best online marketplace in terms of monthly visits and mobile web traffic. Third-party seller gross merchandise volume (GMV) on Amazon equals 390 billion USD. Data also demonstrates that the top alternative for Amazon sellers globally is eBay. 

In 2022, the European online cross-border market produced a total revenue of 265 billion euros. Notably, marketplaces accounted for at least 63 percent of this figure, equivalent to 167 billion euros. Amazon and eBay account for nearly half of the online marketplace-driven trade.


How to build an online marketplace

Conducting comprehensive market research is key to the success of your online marketplace. The following steps help you gain most out of your investment:

1. Determine the key characteristics of your platform

Most online marketplaces share common characteristics that distinguish them from other ecommerce shops. These characteristics include:

  • Products from many different third-party sellers

  • Easily accessible product reviews from other users

  • User accounts with a variety of features, and often social functionality

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.

2. Decide what type of marketplace suits your aims

Generally, you can split online marketplaces into three different models - vertical, horizontal, and global online marketplaces. They can be distinguished from one another in the following ways:

Vertical online marketplaces

Vertical online marketplaces sell multiple products from multiple sellers. But these products all fall under the same category/type. An example may be an online marketplace for clothing or an online marketplace for cars.

Horizontal online marketplaces

Horizontal online marketplaces sell products from multiple different categories. However, these products are all linked by another common factor. Take Etsy for example. Etsy sells many different types of products, but they’re all handmade.

Global online marketplaces

By contrast, global online marketplaces sell an almost unlimited selection of products. They don’t limit the selection of products by category or product type. As a result, they tend to be much bigger, with a higher volume of shoppers/users. Sites like eBay and Amazon are prime examples of global online marketplaces.

3. Define the platform’s key functionalities

The basic features of an online marketplace include product page, shopping cart, payment gateway, promotions and loyalty program, search function, admin panel, sign-in and sign-out forms and security options. As you grow your business, you’ll need to add more functionalities to your platform. 

4. Develop the best tech system

Depending on your business requirements and your objectives, you can develop an in-house tech stack or create an ecosystem of microservices which enables you to buy your required solutions (ecommerce platform, CDP, promotions and loyalty, CMS, etc.) from reliable vendors. 

Benefits of online marketplaces for sellers

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.

Benefits of online marketplaces for buyers

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.

How promotions power an online marketplace

Creating exclusive customer experiences through personalized offers play a key role in boosting the engagement and loyalty of online shoppers. A Forrester report on the state of customer loyalty and marketing technology shows that 65% of US online consumers who belong to loyalty programs say that members-only offers are important to them. 

You can create a wide range of promotions and loyalty offers by integrating your system with Talon.One:

1. Updating activity notifications

Start with one of the SKDs. Once it is configured, you can use the following API calls:

Using Talon.One APIs, you can send a session update every time a customer uses a promotion code.


The Rule Engine will validate the code, and return an acceptCoupon effect (and any other effects that were triggered), or a rejectCoupon effect indicating that the coupon isn't valid.

2. Handling effects

The Rule Engine will send back discounts and other actions in the form of effects. These are handled in your integration by registering effect handlers: 

Head to our customer success stories to see how ecommerce businesses and online marketplaces benefit from Talon.One’s scalable loyalty and promotions solutions. 

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