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This Post Category goes under : E-Commerce | Marketplace

Marketplace VS Regular E-commerce

Multi Vendor Marketplace is an entirely different business concept from the regular E-commerce Store, it works as a relationship infrastructure, providing tools for vendor and consumers to trade.

It is a three-party model. The customer of a marketplace is the seller, the one who presents his products and services on the marketplace while the customer of an e-commerce site is the end buyer

Marketplace Business Concept :

A marketplace is a platform where the products presented come from multiple sellers. The variety of assortment a marketplace offers is exactly what attracts customers.
Oftentimes, the marketplace operator does not hold any type of inventory, but helps the buyers and sellers to facilitate a transaction (handling logistics, facilitating the payment…).

Regular E-commerce Business Concept :

Regular E-Commerce is a one store website where a single vendor sells his products/services to multiple customers. As the website belongs to the seller, two parties are involved in the sale process (seller / buyer), and he is the one how take care of all the logistics.

How is a Marketplace different from an Online Store

There are several ways for selling online. Some retailers develop their own e-commerce websites, while others use online marketplaces.
If you are in doubt whether to choose marketplace or e-commerce website for your business, this comparison maybe will help you decide.

Marketplace :

For Sellers :
1- Large Targeted audience due to variety of products
2- Provide the hole pack of features for buyer seller interaction
3- Quick set up, a matter of hours
4-Low or no costs upon setup, Charge commissions (5 to 15%)
For Buyers :
1- Variety of products
2- Feedbacks, more trusted by customer
3- Buyers / Customer protection program

E-commerce :

For Sellers :
1- store owner needs to attract traffic, perform SEO…
2- Take care of store functionality
3- Set up the entire site, time consuming
4- No commission, seller pays for all the charges (hosting/maintaining the site online).
For Buyers :
1- Limited products options
2- Customer trust built from scratch
3- No specific policies

Marketplaces are great they allow you to cut down the costs, risks, and all the time needed to create a store. If you’are already an established brand it’s always a good idea to vary your distribution channels to reach a larger and new customers

Marketplace Opportunities :

  • Costs on marketplaces are, significantly lower than the costs incurred in physical store.
  • Reach more customers with minimal effort. Marketplaces success depends on the success of their sellers, so they invest in marketing to drive traffic and sales.
  • Opportunities for brand expansion at a lower risk.
  • Sell end of line or end of season products at much better prices than if they had kept the stock in their own stores.
  • Great tool to test new products before investing significant resources in promotion.

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