When decide to whether build an online marketplace or an eCommerce site to sell your and your partner’s things online, you need to know what are the pros and cons of both options. In this article, we have presented you the pros of building an online marketplace.
To understand what an online marketplace is, we have an article on that subject.
Now let’s understand what the benefits of building an online marketplace are.
1. No Stock
As an online marketplace owner, you aren’t required to stockpile the inventory. Online marketplace has shops of the vendors, who takes care of the selling an item and shipping it to the customer. You only handle the transaction and take out your part from it. This makes things a lot easier. You don’t require costly warehouses or an army of employees to produce or manage the large inventory.
Though, there could be an exception if you are offering the vendors the service of selling their products. In such case, you receive the stock from the vendors and you do all the selling and shipping to the customer requiring warehouses, staffs and logistics.
2. Really-really Wide Range of Products
Usually, online marketplaces offer vendors to open a shop on the site for free (which you should also do) and there is no restriction about the nature of the vendor (it could be a manufacturer, brand, a single person selling his stuff), an online marketplace is capable of gathering really, really wide range things impossible to show up on regular eCommerce sites. Apart from the regular manufactured items, the inventory range in an online marketplace could widen to things of antiquity, rarity, uniqueness or speciality.
Apart from that, people can also sell used things online on an online marketplace. Thus, an equivalent option with lesser price is present for almost every product of mass production. And customers love having a multiple options to choose from.
3. Attracts the Business Owners Who Can’t Afford Their Own eCommerce Sites
The biggest reason businesses and people opening their stores on an online marketplace is that either they can’t afford building an online eCommerce site or their individual, standalone eCommerce site hasn’t gained much popularity yet and meanwhile, wants to keep selling their products or divert some of the customers gained on marketplace to their website. Thus, an online marketplace is most lucrative to those business owners. Also, such business owners are able to attract more customers and garner more revenue than individual sellers.
4. Control Over Transactions
You have total control over transactions happening on the site. All the transactions are carried out through you. Thus, you can regulate the transactions guaranteeing the safety and holding the money until the buyer approves the quality of the received product as expected. This way, you can increase the trustworthiness of your site in buyers’ eyes.
5. Revenue Gained On Each Transaction
An online marketplace owner’s main income is in form of fees and commissions on each transactions. Thus, as much the shops, customers and transactions grows, your revenues grows. Also, you get to decide the fees and commissions structure.
6. Sole Authority
You act as the final authority on the site. You make the rules and guidelines and are the law-enforcer for everyone to follow the site-standards. You also have control over the information of buyers and sellers making you the central figure in every activity on the site and allowing you the final power on everything.
7. Attracts Customers Looking For Large Pool of Inventory
Online customers are often attracted towards online marketplace for its offering of very wide product ranges with different sellers, prices and first or second hand products. For one product, they get multiple types of offers and such a large range of options gives them freedom to choose the deal which suits to their needs and pockets the best. On a regular eCommerce site, they can only expect things mass manufactured things without lower-priced second hand options.
Online marketplace is good if you want to earn from the transactions between parties and only serving as an online platform for it to happen. Though, you should also consider the disadvantages of building an online marketplace for a better understanding.