An online marketplace is an e-commerce site that brings sellers together with buyers, and all transactions are managed by the website owner. Companies use online marketplaces to reach customers who want to buy their products and services. Examples of online marketplaces include Amazon, eBay and AliExpress.
Benefits of Online Marketplaces for Businesses
Better Opportunity
There are greater opportunities in supply chains for sellers and buyers to develop new trading relationships. The radar of a marketplace is always bigger than an individual e-commerce website because many sellers and buyers from different niches use the same platform for their needs.
More Transparency
Online marketplaces can provide greater transparency in the buying process as availability, rates and stock levels are all available in an open environment.
Always Reachable
When 24-hour operations are possible, concerns about time constraints and various working hours for trading are eliminated. Since these marketplaces can be accessed from anywhere at any time, no one has to wait for the shop to open. Online marketplaces are therefore very convenient for both sellers and buyers.
Revenue Stream Alternative
There are two ways for marketplaces to generate revenue, one is commission-based and the other is to charge subscription or membership fees. Some of the online marketplaces consider commission as the best option as it is easier to operate and a sustainable source of income.
Benefits of Online Marketplaces for Buyers
Best Deals
Buyers can get the best deals thanks to up-to-date information on product availability and price. An online marketplace connects the right buyers with the right sellers with much more precision than a simple web search can.
Opportunity to compare products and prices
Instead of wasting time searching for individual suppliers, online marketplaces offer an easy way to compare prices and products on a single platform. One of the most important benefits of an online marketplace is that it brings together all the deals from different vendors or service providers. Customers are more likely to use an application with a wide variety of options so that they can choose exactly what they want without limiting themselves to a single provider.
Builds Trust
Advanced online marketplaces provide a degree of trust to the customer because they only work with sellers who are members. This builds trust and appears credible when a new customer visits the e-commerce marketplace. A significant number of buyers hesitate to share card details for financial transactions when operating on a new website.
Benefits of Online Marketplace for Seller
Regular Orders
Sellers receive daily requests from both new and existing customers for offers and products. An online marketplace increases business opportunities. You can meet customers you have never crossed paths with before and find new prospects for sales.
Sales Channel
When you sell through multiple platforms, you provide multiple touch points for your customers to connect with your brand. The online marketplace creates an alternative distribution channel to advertise and sell products.
Low Marketing Cost
Compared to other distribution platforms, online marketplaces can provide lower marketing costs. The seller can reach a potential customer with little effort. You can sell where potential customers are located without investing extra time or money. Marketplaces have the advantage of owning their resources, target groups and customers.
Foreign Sales
Global online marketplaces will offer opportunities for overseas sales that you may not be aware of. Through online marketplaces, overseas sales are incredibly easy. In particular, foreign operators such as Amazon or eBay often provide assistance and rights to retailers. In the face of high stock levels, an attractive price will convince most foreign customers.
