While reading on, imagine the online marketplace like a real world markets of some town. Filled with many shops and stalls, people buying grocery or their clothes, searching for some brand or looking out for some cheap buy, also checking in the second-hand market for even cheaper stuff while trying to stay away from frauds who sell fake things. Interested people also enters into pawn shops where they can get things of antiquity or rarity. Also, some areas could be jammed with people circling around a man who is auctioning various stuff, from cheap electronics on the footpath to precious paintings hanging inside his shop.
People love such market for its variety and low prices. Yet, it’s not a mall filled with standard products. You have to beware that you don’t get cheated upon.
All these things apply on an online marketplace, too, because it is just the virtual version of the physical marketplace. You can read our article to understand the advantages and disadvantages of an online marketplace.
Down below, we have explained the structure of an online marketplace for you to understand what’s in it and how it operates.
1. Any Online Marketplace Is Basically a Website
It is called an online marketplace but basically it is just a website. Just like Facebook is also called a Social Media Platform.
More specifically, a form of an eCommerce website. The who established the website owns and regulates the website just like any other website owner does. The owner, with the aim to build an online marketplace, starts, runs, advertises about it and tries to attract both companies or entities who wants to sell their stuff and consumers and buyers who wants an online place, where just like a real world marketplace, many offerings are available.
What the owner looks after is that all the deals, transactions and other happenings on the website are flawless and expected. No one’s trying to cheat. No fraud is trying to loot the customers as well as the trustworthiness of the marketplace itself. On the other side, he also sees that the regular and regularly increased flow of buyers and sellers is there. Advertisements, online sales, sponsorship and other ways are there for the marketplace owner to increase the traffic on the website.
2. Anyone Can Open a Store on Online Marketplace
From a multinational, reputed brand to home-based production or even a man who just wants to sell his broken laser pointer and nothing else is welcomed on an online marketplace and that’s what intensifies the diversity, product range and all the weird products you can ever imagine to buy.
3. All the Information Is Retained by the Marketplace Company
Except the basic information about your selling/buying history, monetary calculations, etc. you don’t have the deep access to the customer you sell to as a store-owner, neither of any personal information. Similar to real-life market where once a customer purchases something from you, he is most likely to return to only if you gave him good services. You don’t have their email, phone, address, likes/dislikes or any such details. All that intricate and important details which can help building plans and marketing are stored away in the marketplace’s database.
4. You Can Sell ANYTHING
This is the most beloved feature of an online marketplace. You can sell anything as long as it’s yours and it’s not illegal to sell it. Apart from the regular sellers of regular useful stuff, people get things on the marketplaces which are rare in the world i.e. rare manuscripts. Such things never comes up on a regular eCommerce website, until it’s a dedicated to such things. You can buy it directly from the seller or could enlist your price in the auction going on in the marketplace.
The sellers probably could be sitting on the other side of the world but you still can get such rare thing. Or, you also have a range of products full of oddity and weirdness. It all depends on what the store-owner on the marketplace decides to sell.
This feature enhances the product variety and diversity far deeper and wider than any eCommerce website and has remained as the major plus-point for online marketplace community. Although, as a side-effect it also increases the possibility of online frauds and fake sellers.
What the marketplace itself will earn after attracting all the buyers and sellers and facilitating with different features?
Fees. It’s simple, guessable and well-used idea. You make a sell on the marketplace and the marketplace will take a share out of the deal as its fees for letting you sell things. The fee structure could be varied and the percentage could rise up to 25% of the whole deal.
This is the point most sellers don’t like. Yet, that’s the way the marketplace works. Think it as paying rent for the shop you run in your local, physical market.
6. Marketplace Company Is Responsible For The Constant Flow of Sellers/Buyers
It’s the marketplace owner who is responsible to attract both sellers and buyers to its website. Because, that’s why he is starting the website. Not to sell things, but to make people sell and buy through his website and take a bite out of each transaction as his fees. The more sellers and buyers are there, the more selling would be there and more revenue would be generated by the company. Once the both parties begins to come and starts trusting the marketplace, millions and millions of visitors floods towards the website for all types of deals available and this encourages more sellers to open their own store on the marketplace.
Thus, the buyers and especially sellers can focus on their products and dealings and not worry about finding a market for the product. That’s the job of the marketplace company itself. This is also a plus point which attracts the sellers, especially those who can’t afford marketing and still want to sell globally.
7. Transactions Are Processed By the Marketplace Company
Transactions are processed by the marketplace company, because that’s how they come to know how much sale did you make and on that sale they get to take their part from the deal at the moment. You are bound to this rule. There are no exceptions. There couldn’t be any, except you meet your buyer online but somehow manage to do the deal offline.
8. Deals could be C2C, B2C or B2B
Unlike a regular eCommerce website, on an online marketplace the deals could take place between different types of parties. It could be a man selling his old sofa to another person (C2C), a brand selling its items to customers (B2C) or a business could be selling products or services to another business (B2B). Any and every kind of business could take place in an online marketplace and that’s the comprehensive scale of an online marketplace loved by millions.
9. Sell By Yourself or Have the Marketplace Company Sell For You
There is also an option in which you open your store and try to sell the stuff. Or, you can send your stock to the marketplace company and they will sell the stock on behalf of you. This is extremely beneficial for people who doesn’t even have time or technical knowledge to sell through his online store. The marketplace company will do all the selling work for you and you get your cheques (with cut fees) regularly. You just produce and deliver.
Logistics are also optional. You can use the logistic offered by the marketplace, or could send it through mails or other options you can afford. The fees and charges would also vary on each marketplace and type and size of the deal.
These ten features are the basic things any online marketplace website is made of. Although, you now understand an online marketplace well, you need to know all the advantages and disadvantages of an online marketplace before deciding to sell through a marketplace or build your own eCommerce website. You can also read the comparison and the reasons about why building an eCommerce website is better than online marketplaces in most cases.