Smartphones have eased every activity of our day-to-day lives. With the use of smartphones, people are now able to order food, book a cab, shop from stores, and perform all the essential activities in just a few clicks. All these have been possible with the digital transformation of the offline business via apps, websites, and software.
According to reports from Statista, 47% of the online shopping is done via online marketplace platforms globally, which implies the fact that online marketplace development is the future and it is worth investing in such development.
In this article, we will be providing you with a detailed description of the online marketplace, the development of the marketplace, its types, benefits, and many more.
What is an Online Marketplace?
The online marketplace is the platform that connects buyers and sellers. When talking about the online marketplace one similar thing that comes to mind is e-commerce. Although these both aren’t the same, they do have certain similarities.
The online marketplace is a website where multiple sellers can sell their products and goods. In other words, an online marketplace can be also defined as a shopping mall where you can find almost everything from multiple brands and sellers and buy them online without having to move out of your home.
The online marketplace constitutes of three parties – the marketplace admin or the owner of the website, the sellers, and the buyers. Examples of popular online marketplaces include Amazon, Etsy, eBay, Walmart, and many more.
Types of Online Marketplace
In this fast-changing and technology-driven world, everyone wants their businesses to reach new heights and generate higher revenue and ROI. There are a lot of marketplaces if sorted and filtered as per the categories like the customer type, industry, and other factors. Majorly there are three main types of marketplaces.
- Business-to-Business Marketplaces (B2B)
- Business-to-Customer Marketplaces (B2C)
- Peer-to-Peer Marketplaces (P2P)
Also known as B2B Marketplace, it is a marketplace where the customers (buyers/sellers) buy goods and products in bulk from companies, vendors, or wholesale suppliers. The B2B marketplace enables the goods and products to more consumers with an expanded sales medium. This also enables the automation of the buying and selling process between the businesses with improved transparency of the deals and transactions between them, which in turn favors both the parties to build trust amongst them.
Examples of the B2B Marketplace development are Toptal, Upwork, Indiamart, and many more.
It is also known as a B2C Marketplace and as the name suggests, it has two users, the sellers and final consumers of the goods and products. In other words, it is a one-stop-shop or an online retail store, for buyers who are looking to buy a variety of goods from these marketplaces offered by numerous sellers.
Examples of B2C Marketplace development are Flipkart, Amazon, and many more.
Popularly known as P2P Marketplace or Customer-to-Customer (C2C) marketplace, it serves the similar needs of individuals. This type of marketplace is designed to sell goods and services in exchange for money or other products and services. The primary benefit of developing a P2P marketplace is that it is a part of the sharing economy as well as making the optimal use of available resources by renting, and not buying along with a shorter sales cycle as compared with the B2B and B2C marketplaces. It also enables a consumer today, to become a service provider tomorrow when the need arises.
Some well-known examples of the P2P or C2C Marketplaces are Uber, Lendbox, Etsy, and many more.
The online marketplace has fulfilled the demands of the consumers, sellers, and suppliers enormously which has made way for them to grow. Developing an online marketplace has numerous benefits which will help you decide better and plan the future of your marketplace development more effectively.
- The primary benefit of developing an online marketplace is that it allows you to internationalize your business i.e. to make the products, goods, and services available for everyone globally.
- Through this development, you can offer the best goods and services from the best suppliers and service providers, with unique pricing, offers, and benefits.
- It gives you a plethora of opportunities to explore the market/industry, gain exposure, and then plan a better roadmap to grow your business.
- It helps in building trust, credibility, and authenticity between the users along with visible transparency among them which helps them to fulfill their future business requirements.
- The online marketplace also helps in the reduction of marketing costs for goods and services.
- It aids the customers and buyers to compare prices between different sites and also check the availability of goods.
- Through this sellers and suppliers can display a wide range of options of goods from different categories which in turn also aids the buyers to buy from the wide range of options available.
- It allows your businesses to be functional 24*7 and even buyers can buy products anytime and anywhere.
- These marketplaces also aid you with reviews and feedback on the products and services along with genuine pictures, which helps you decide whether to purchase the product or not.
- This also grants you access to a large number of additional benefits like it saves your time, traveling costs to malls and retail stores, shopping within your comfort zone, customer support, and other assistance as well.
The above-mentioned are the benefits of an online marketplace development but you should also not miss out on the disadvantages of developing an online marketplace.
The primary disadvantage of the online marketplace is that it only allows users to buy and sell products, which implies that there are zero scopes for brand building and also it aids in the distribution of the goods, products, and services which will surely increase your sales, but you cannot market your products on this platform.
Although you might just think that this is just a mere disadvantage, this should not be ignored as it might affect the business and the plans that you may have for your business. But not to worry, you can work on these disadvantages and overcome them as there is no end to technology and we are all aware that with every problem comes a solution.
How to Develop an Online Marketplace?
- Pick a Feasible Industry
- Determine Your USP (Unique Selling Proposition)
- Evaluate the Market Size of Potential Buyers and Sellers
- Design Your Distribution Model
- Choose The Suitable Business Model according to the Demands
- Develop your Product
- Build Trust and Credibility between the Users
- Provide the Services and Grow Your Realm
We are all aware of how fast online marketplaces are growing. The online marketplace development has opened up a plethora of opportunities for business owners to grow with this trend and provide improved customer service to the buyers with the features and offerings in their software. The future of the online marketplace looks promising, with a total of 230.5 million people shopping online with a steady increase in the number year over year, as per the reports from Statista.
With this article, we hope you might have understood the basic types of these online marketplaces and their benefits. Now if you are convinced about an online marketplace development for the business we recommend you to conduct thorough market research and surveys which will help you understand better and conclude your thoughts with hiring a development company for the same.