What is an Online Marketplace?
An online marketplace is an ecommerce shop where multiple merchants can offer services or products to clients. Examples of online markets consist of Amazon, Etsy, Airbnb and eBay. These online shops are considered to be online markets due to the fact that there are lots of merchants (numerous thousands, in reality) who can offer their products to the clients that search the website.
Traditional ecommerce stores sell the products and services of one brand, but not online marketplaces. Given that an online marketplace has numerous merchants selling their products on the shop, they have a higher product offering which can draw more visitors to search the website. Among the main benefits of online markets is that they draw in great deals of digital foot-traffic, which can indicate higher exposure for the merchants who sell on the online marketplace.
What unites all the sellers on an online marketplace together is that there’s one checkout process. When customers store on an online market, they do not need to click away to various websites to finish the transaction, they can buy from many different merchants on the market at the same time, even if the merchants aren’t related to one another.
When consumers make purchases from online marketplaces, the merchants they purchase from get an alert that someone has acquired their item, and after that each merchant can separately ship and send the consumer the products that were purchased from them.
This means that although a client can complete simply one transaction on an online marketplace when buying from multiple various sellers, their products will be delivered from each seller individually indicating they’ll receive a shipping package from each merchant they purchased an item from.
Essentially, for customers, shopping on an online marketplace resembles shopping from several different ecommerce merchants at the same time, while being able to pay all the merchants in one deal instead of in many transactions.
Another thing that unifies online markets together is that they normally are focused around one specific niche. Amazon, for example, started as an online market of booksellers. Airbnb started as an online market to lease rooms in San Francisco. Online marketplaces are usually more effective when they focus around one niche since it gives customers a reason to go shopping there and when they do shop there, they know what to get out of the merchants offering on the marketplace.
An online market can also be described as a “Collaborative Economy” or a “Sharing Economy” because it’s normally made up of merchants who collaborate to share or sell their idle properties on a community-accessible market.