In just 30 years, the Internet has changed everything. Nowhere is this more true than with how goods and services are exchanged. Not too long ago, the marketplace was a purely local affair. But when the marketplace moved online, it shattered the very notion of local and global. You’re now able to buy anything and everything with just a few clicks, and vendors have unprecedented access to a global audience.
An online marketplace is a type of e-commerce site that connects those looking to provide a product or service (sellers) with those looking to buy that product or service (buyers). These buyers and sellers may have had trouble finding each other before, so the marketplace creates an easy way to introduce both parties to one another. Unlike an e-commerce site, there’s no inventory to buy, build, or manage.
eBay’s launch in 1995 sparked the first wave of product-focused marketplaces, and Uber’s success in 2010 brought a second wave of marketplaces for services. Today it is B2B marketplaces that are picking up steam.
Because they offer real convenience to consumers, over the last several years the number of marketplaces has exploded. If you were creating a department store today, it would be an online marketplace.
Marketplaces are spread across a huge number of market segments, but in general there are two common elements to every online marketplace –
- Marketplaces aggregate many sellers and their inventory
The marketplace acts as a digital middle man, providing access to a wide number of third party sellers. Consumers don’t like using apps from single retailers. They are much more likely to download an app that offers product ranges broader than one store can offer.
- Marketplaces include a transaction element
A marketplace differs from a listing site by managing the financial transaction between seller and buyer. This gives the marketplace owner significant data and analytics and forms the basis for the commercial model in operating most marketplaces. B2B marketplaces often also feature a lead generation opportunity built in.