What is an online marketplace?
An online marketplace is an ecommerce website or platform where a business can sell its products.
Online marketplaces operate in every corner of the internet and every global market. All online marketplaces are different, each offering unique shopping experiences. These experiences differ based on the business industry, customer base and regional preferences.
Household names such as Amazon, eBay, and Alibaba have come to define the global online shopping experience. However, online marketplaces come into their own when supporting more niche industries. Marketplaces such as Fiverr, Rover and Etsy connect and target audiences with bespoke interests.
How do online marketplaces work?
Online marketplaces allow businesses to list their products and services digitally. When using the marketplace, customers can simultaneously view offers from multiple businesses. This provides consumers with greater choices and increases competition.
In addition to enabling a business to list their products, online marketplaces manage every stage of a consumer’s purchasing journey. This includes payment processing, order processing and customer communications.
Online marketplaces provide businesses with a launchpad to scale new markets, at speed, without having to implement any local business infrastructure.
What are the different types of online marketplaces?
Often, online marketplaces operate within niche industries or cater to a specific business need. Despite the internet being limitless, online marketplaces can be grouped into two general categories.
Ecommerce marketplaces are designed for the sale of physical and digital products. Ecommerce marketplaces are the most common type of online marketplace. They mainly operate within business-to-consumer (B2C) and peer-to-peer (P2P) industries. However, business-to-business (B2B) ecommerce marketplaces are commonplace.
B2C ecommerce marketplaces P2P ecommerce marketplaces B2B ecommerce marketplaces Amazon Marketplaces Depop eWorldTrade Not on the High Street Vinted Shopify Facebook Marketplace eBay Trayde
Online marketplaces for services
Service marketplaces are websites or apps, designed for buying and selling services such as accommodation, professional support and more. Sole traders and independent companies can advertise their services and get hired by people directly. These marketplaces operate across multiple industries and are among the fastest-growing areas in digital services.
B2C service marketplaces P2P service marketplaces B2B service marketplaces Fiverr Airbnb Alibaba Emprevo Rover Arrow Etsy Taskrabbit Kitmondo
Do you need a business account to sell on online marketplaces?
Using a business account, even when trading online, helps simplify financial management and access essential services. Wherever in the digital world you do business, a 3S Money online business account is your perfect ecommerce partner. Businesses can send and receive high-value payments in 190+ countries, access 65+ currencies, and enjoy the widest global coverage of any payment provider.
Benefits of online marketplaces
Having a visible ecommerce presence is essential in today’s business environment. Here are five reasons why every business should consider using online marketplaces:
Scale new markets
Local businesses can become global operations with the click of a button. Online marketplaces allow businesses to enter new markets and explore global opportunities, with limited risk.
Increased reach and visibility
Advertising and promotion costs are becoming very expensive, especially for smaller businesses. Online marketplaces have thousands if not millions of active users. By selling on online business marketplaces, businesses can advertise products and services to an established audience, at a fraction of the cost.
Access to physical and digital infrastructure
Through online marketplaces, businesses are granted instant access to trusted logistics and fulfilment services. In addition, online marketplaces provide businesses with digital marketing tools, that can help boost advertising and marketing campaigns.
Online marketplaces provide businesses with access to advanced ecommerce services, at a fraction of the cost. This helps businesses compete on a level playing field with their competitors. By removing the cost associated with financial services, businesses can let their products do the talking.
Build a trusted brand
Businesses that sell through online marketplaces are given an unspoken stamp of approval. This gives a business additional credibility and increases consumer trust. Online marketplaces also provide an additional layer of payment and fulfilment security.
How much does it cost to build an online marketplace?
Setting up an account and selling through an online marketplace is simple. However, with every third-party service, there are associated costs. Most online marketplaces will charge a selling fee on every purchase. While the fees are relative to the value of a sale, this can significantly impact cash flow.
Businesses that sell internationally may face uncompetitive currency exchange rates. Foreign exchange can be costly, and online marketplaces are no exception. Without a local or multi-currency business account, a business may lose money when processing international payments.
With a 3S Money online business account, businesses can instantly collect payments in 65+ local currencies, from over 20+ global online marketplaces.