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What Is Ecommerce Marketplace?

Undoubtedly, businesses, irrespective of their size and domain, must have a robust digital presence in today's competitive world. Some businesses might consider eCommerce and online marketplace websites to be similar. Moreover, for general consumer's both of these platforms are used to browse and buy products online.

So, what is an eCommerce marketplace?

The online marketplace, e-marketplace or eCommerce marketplace is a website or a place where one can find and purchase different products from different vendors. The marketplace owner assists businesses and customers to get a single platform to make transactions. Additionally, third-party service providers or vendors deal with the manufacturing and delivery of products.  

The online marketplace easily streamlines the selling and buying process through an easy portal. It enables vendors to sell their items to the consumers directly and reduces the need to keep stocks.

Companies like Flipkart, eBay, and Amazon have achieved tremendous success through the online marketplace business model. This OmniChannel model has become the most profitable business model in the eCommerce industry. 

The entire portal executes on single technical architecture and software infrastructure, enabling all sellers to sell their products under a single umbrella. And when we talk about revenue generation, companies using this business model hold the lion's share of the total market.

Why Choose E-Marketplaces?

E-marketplaces offer an easy shopping experience to search, compare and buy products from a wide range of vendors on a single platform. These platforms provide convenient shopping to shoppers and help them get desired products at the best prices.

For brands, vendors and sellers, online marketplaces are a win-win platform and offer tremendous benefits:

Enhanced reach: 

Small business owners or startups that might have less reach to customers should opt for online marketplaces. Developing your eCommerce websites is not easy and affordable to all. Hence, even for overseas expansion and huge customer reach, using an e-marketplace is a great choice.

Revenue generation: 

An e-marketplace serves as one more profitable sales channel to advertise and sell your products. In this way, it assists you in revenue generation.

Customer acquisition: 

If you want to grab customers' attention in less time and effort, operating on a trusted e-marketplace is a cost-effective and reliable solution.

Rapid delivery: 

Offering rapid delivery to all your customers is a typical job; having warehouse capabilities is not possible for every business. To fulfill both of these needs, you can choose an e-marketplace. Doing this also improves customers' loyalty to your business.

Customer service:

For retailers and brands that use fulfillment services offered at e-marketplaces, such as the Amazon FBA program, the e-marketplace handles warehousing, exchanges, or returns.

Want to know the difference between eCommerce and marketplace? Let's start a discussion on eCommerce vs marketplace:

  1. Investment


Instead of building a user-friendly eCommerce website, you will need to invest in product optimization and digital marketing strategies to gain more customers.


When we talk about an investment in a marketplace, it is relatively less here. However, the cost of launching the marketplace is high compared to an eCommerce website, as you will need to make it convenient for the vendors/sellers and customers. An efficient search filter and a well-structured navigation system are some of the essential features a marketplace must contain.

2. Technology used


Platforms such as Magento, PrestaShop, 3dcart, OpenCart, Shopify, and BigCommerce can be used.


An online marketplace is tricky as they require managing several third-party vendors. Therefore you need to utilize an efficient SaaS/cloud marketplace platform such as Arcadier, Sharetribe etc. 

You can also choose a business-centered marketplace solution using CS-Cart or MultiMerch. If you need a multivendor marketplace, use CMS extension (Dokan + WooCommerce + WordPress).

3. Inventory


Unlike the online marketplace, you don't have the option to disappear or disable the products you don't sell to the customers. In some cases, sellers get rid of at this point or reduce the prices of unsold items to attract buyers and keep selling.


No limitations on inventory. Users can find the products they like from a big pool. But, you will need to infuse more effort into merchandising.

4. Order management and shipping guidelines


You will be responsible for delivering orders and managing shipping guidelines to your customers.


Sellers will receive, operate and deliver orders. The way you manage all these things will rely on your region, business model or industry you run. Vendors can fix their own delivery rules and associated prices; also, they can use the existing shipping method of the marketplace that automatically calculates costs.

5. Financial risks


More financial risks as eCommerce sell or buys products.


An online marketplace doesn't sell or buy products. Therefore, there is a less financial risk than eCommerce websites.

In a nutshell!

To run a successful operation on the web, you need an advanced platform to automate your business operations, product branding and selling. It is also necessary to optimize the marketing performance to ensure enhanced visibility, drive conversions, competitive prices, and maintain market share.

Marketplaces are a perfect starting point for startup businesses as it helps them cut down the costs, reduce risks, and build the brand's image in less time. However, if you are an established business and not intended to share your profit part with a marketplace, then creating your ecommerce website is a good choice for you.

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