Online Marketplace Businesses: Key Benefits to Starting One

According to Statista, in 2017 e-commerce sales worldwide amounted to $2.3 trillion. And this number is expected to grow in the coming years. This indicates that consumers and businesses have both moved their interactions online.

Marketplaces are what make these interactions possible. In recent years, their number has increased. These newcomers are functioning alongside such giants as eBay, OpenTable, Uber, Airbnb, and Amazon. According to a research by Internet Retailer, 35 of the current top 75 online marketplaces launched between 2010 and 2015, including physical stores that went online. In this article, we outline how to start an online marketplace business and talk about their key benefits. But first let's answer the question: What is a marketplace?

In this article, we outline how to start an online marketplace business and talk about their key benefits. But first let's answer the question: What is a marketplace website?

An online marketplace, or an e-marketplace, is a website or app that serves as a mediator between customers and companies or individuals offering products or services in the B2B and B2C sectors. Marketplace owners usually don’t offer any products or services themselves. Their task is to provide a platform where marketplace participants interact.

There are four main types of e-marketplaces:

• Vertical marketplaces offer products of the same type from different vendors.
• Horizontal marketplaces offer different products that have similar characteristics.
• Global marketplaces have no limitations and sell all kinds of products from different suppliers.
• Hybrid marketplaces offer their own products as well as products from other companies while providing a platform for participants to complete transactions.

Internet Retailer analyzed the top 75 online marketplaces worldwide as of 2017 and came up with the following statistics:

Considering marketplace growth and areas yet untapped by this technology, business owners can leverage the marketplace business model and build their own unique solutions. Below are some key benefits of running your own marketplace.

The cost of releasing a marketplace application is almost the same as the cost of launching an e-commerce website. Although the logic behind an e-marketplace is rather complex, its functionality can cater to the specific needs of many different vendors.

Read more - Online marketplace developers