Marketplace: the new way to sell and buy online

Marketplace, What is it? A virtual place where exchanges of goods or services take place that have repercussions in the off-line world. What are the rules of the game?

Buying online is now the fastest and easiest way to access goods or services. Even the trends say so: online purchases are growing every day in the world and Italy is no exception.

marketplace online

But what are these virtual “places”? Every single brand or distribution chain has its own dedicated website, where a user who has already chosen a certain product can immediately check its availability and price. On each site, in fact, it is possible to buy directly in a more or less simple way.

There are also Internet sites and platforms dedicated to buying and selling through a wide choice of products classified by specific product areas: marketplaces.

The former are more familiar and have been on the market for longer (e-commerce sites), allowing us to purchase the chosen products online, even in a single shop or chain such as Ikea, Esselunga, or MediaWorld.

In the latter, on the other hand, it is possible to find new products, or guaranteed second-hand products, of almost every type of merchandise or dedicated services such as Amazon, Zalando, and eBay, or platforms of a completely different origin such as Booking, Volareweb, Facile.it.

What is a Marketplace?

A marketplace is a platform that is made available by a service provider so that companies can test an online sales activity (e-commerce) with a specific indexed catalog, order management service, returns, and transactions. They can be complementary to a direct e-commerce site, or replace it directly.

marketplace platform

What are the advantages of the Marketplace?

The choice of using a Marketplace platform for one’s sales activity is becoming increasingly common today and makes it possible to benefit from various positive transference for one’s business and brand:

  • Increased visibility for your product: through the creation of advertisements based on excellent storytelling and copywriting, you will have the opportunity to increase traffic to your sales site, reaching customers that you would never have been able to intercept otherwise.
  • Brand promotion: visibility is a pivotal principle underlying the success of a sales activity, which is why marketplace platforms are the most suitable for acquiring it, acting positively on brand awareness.
  • Better monitoring of competitors: through market analysis campaigns, you can keep an eye on your competitors’ performance and possibly modify the performance of your business as you go along. 

 

What is the difference between Marketplace and E-commerce?

E-commerce is an online store that usually handles a few suppliers and sells often vertical products (e.g. only technology of a specific brand, etc.).

Whereas marketplaces are comparable to our large shopping centers: they sell products even if they belong to different product categories and group together many merchants who manage themselves.

Types of Marketplace

Marketplaces are not homogeneous entities, they can be of various types. They are called horizontal when the products and services in question are of different kinds, or vertical when they only allow trading in one type of product.

Search, find, buy and the package arrives!

Making millions of products available to users that can be accessed through simple search engines is the revolution of these virtual exchange markets.

The “typical” user searches for object x and compares the proposed solutions, compares prices and through a credit card, PayPal or digital currency buys the product, which will then be delivered to the requested location.

The “dependence” on the “search” factor makes indexing on Google the main condition for a product searcher to arrive at the marketplace and make a purchase (conversion).

To increase traffic to one’s own product catalog, within the marketplace, it is important that pages are present among the first search results on Google through the use of tags (keywords). To achieve good indexing levels in marketplaces, it is essential to include specific tags for each product in the description.

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How to do business with marketplaces: advantages and disadvantages

Individual manufacturers participate in this marketplace with their own sales space within the marketplace, which gives them many advantages over direct e-commerce. These platforms are real business drivers because they allow manufacturers to participate in the marketplace by investing in a calming manner while accessing a large number of potential customers.

In this way, the seller eliminates: – Costs of running your own website – Advertising and marketing costs

In addition, you can test the types of products that have the most appeal to consumers and assess how good your market is. Activities that until now restricted the market to a few operators and those with large resources to invest.

business in marketplace

Marketplace Case History

The marketplace thus creates an economic system defined as disintermediation, which shifts value creation from traditional production and employment chains into new areas.

These places in fact, generally after using the network to find out about costs and offers, make it possible to buy products and services, and book trips and holidays while spending consciously and saving money. In the general economy, disintermediation is the symbol of the removal or exclusion of intermediaries in a supply chain in connection with a transaction or a series of transactions.

In the past, difficulties in communicating and moving goods required the presence of intermediaries between the producer of a good and the final consumer. Nowadays, in most sectors, this is no longer the case, as the end consumer is able to reach the producer in real-time.

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Facebook Marketplace

Indicating that this type of business is growing strongly is the recent entry of social Facebook (mobile only) into this “market”. Recently in some countries of the world (US, UK, Australia, and New Zealand), it is possible to access FB Marketplace.

If selling and exchanging objects through Facebook Groups was already a consolidated practice (450 million users per month, according to company data), it is now possible on the social network to buy, as in e-commerce, offers that will be, according to our profiles and tastes, automatically generated on our home page.

In this space we can make an offer to the seller or write to him or her, as well as place an online sales ad of our own, uploading a photo with description, price, and area. “More than 450 million people visit buy and sell groups every month. To help you make more of these connections, today there’s Marketplace, a convenient site to discover, buy and sell items with people in your community” (Source: Facebook).

facebook marketplace

Zalando

E-commerce giant Zalando, through its Gaxsys platform, also wants to allow retailers to have a shop window on the portal and thus take advantage of the site’s visibility in order to push the business of these small, new enterprises to the maximum. It starts with the creation and management of the inventory, all of which will be the responsibility of Zalando.

The aim is to bring 95% of the small and medium-sized production sector that is still disconnected, into the digital universe. Logistics and transport, for now, are left to the individual management of the sellers, but the company does not exclude in the future the possibility of also providing this service and others that can support the sales and customer service processes.

The pilot project started in Germany – the country of the retail platform’s birth – in mid-September and the two pilots were two selected shoe shops, one in the Bavaria region and the other in Stuttgart (Baden-Wuttemberg area). Within a few weeks, the number grew by a further eight. The goal, for now, is to collect data, understand how it works, and what needs to be changed and improved in order to then launch Gaxsys in all European countries as soon as possible. The planned arrival in Italy is set for spring 2017.

Amazon

The world’s most important player in this sector, Amazon, never misses an opportunity to expand the areas where its business can grow. AWS, the latest addition to the cloud service, was launched a few months ago.

It is a new virtual marketplace where it will be possible to buy and sell applications and software running in Amazon’s cloud. In this new space, it is possible to find resellers such as SAP, Zend, Microsoft, IBM, Canonical, Perforce, Couchbase, Acquia, Check Point Software, and 10gen as well as many other open source offerings such as WordPress, Drupal, and MediaWiki.

This platform has dictated and opened up a new market, not forgetting that it was initially “only” a marketplace for selling books… Yes, Amazon was initially nothing more than a small group of people packing and shipping books across the United States.

Now it sells everything on its portal and according to some research, the user accustomed to buying online, before making the purchase, checks on this platform for the presence of the product sought. In fact, as confirmed by research by BloomReach Inc more than 50 percent of consumers are used to checking price and product features on Amazon. This I believe is the aspiration for any business, to become an example for all. The most famous and popular marketplace in the world through consistency and targeting people’s specific needs.

amazon platform

Has the Marketplace changed our lives?

Perhaps at this point, the answer seems more than obvious. Nowadays, we could not imagine our lives without a marketplace. Checking prices, making purchases, and checking product availability have never been as easy and convenient as it is today.

The platform is not only a means to sell one’s own product or service but has become a current and cool way to shop online, as well as a viable alternative or optimization of local service ads.

Time is scarce and the help of the marketplace is essential. None of us could do without our online shop any longer. The question arises… what would the world be without marketplaces?

If you found this article interesting, I suggest the Master E-commerce Course to acquire skills in this area and become a certified e-commerce expert.

 

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