The possible benefits to be obtained by entering an online marketplace can differ between industries and firms, and between buyers and sellers. If you are looking for the advantages and the downside of the online marketplace before starting one then you have landed on the right page.
The marketplace model is booming in the business industry and the growth rate is out of the blue. Companies like Amazon, Flipkart, Myntra, ETSY are operating for years and are now at the top.
There are many types of online marketplaces and websites where you can sell your goods to customers who would not otherwise find you, in addition to having your own physical and e-commerce shop. An online marketplace has various advantages for the admin, seller, and buyers.
Benefits of Online Marketplace for your businesses
An online marketplace is a platform for small businesses to bring it on the web. Sellers and merchants are benefited but the customers get the most advantage. Some of the potential advantages are summarised below:
General business benefits
Develop new partnerships:
There are greater opportunities, either within their supply chain or through supply chains, for sellers and buyers to develop new trading relationships. The radar of a marketplace is anytime greater than an individual eCommerce website because many sellers and buyers from different niches come to the same platform for their needs.
Because the availability, rates and stock levels are all available in an open environment; e-marketplaces can provide greater transparency in the buying process.
Time restrictions and concerns with various working hours for foreign trade are avoided when round-the-clock operations are feasible. No one has to wait for the shop to open as these marketplaces can be operated anytime from anywhere. The online Marketplace is highly convenient for both sellers and buyers.
Product Information Management software that automates the bulk upload to your marketplaces of product information. This way, at the same time, you can be sure that the catalog and stock details are standardized in all your networks.
Choose Revenue Stream:
There are two ways the marketplaces earn income, one is commission based and another is by charging subscription or membership fees. Some of the e-marketplaces find commission the best choice as it is easier to operate and is a sustained source of income. While the online marketplaces like OLX make money through premium subscription plans.
Benefits of the online marketplace for the buyer
Buyers can secure the best deals due to updated information on the availability and price of the product. An online marketplace brings the right buyers in touch with the right sellers with much greater precision than it could ever happen in a simple web search.
Convenient to compare product and prices:
Instead of wasting time calling individual suppliers, e-marketplaces provide an easy way to compare rates and products on a single platform. One of the key benefits of an online marketplace is that it puts together all deals from different vendors or service providers. Customers are more likely to use an app with a wide variety of choices so that they can select exactly what they want without restricting a single provider to their preference.
Developed e-marketplaces provide the customer with a degree of confidence as they exclusively work with vendors who are members. This builds trust and looks convincing when a new customer visits the eCommerce marketplace. A significant number of buyers feel intimidated by sharing card details for financial transactions when they operate on a new website.
Benefits of the online marketplace for the seller
Sellers get daily requests from both new and existing customers for quotes and products. An e-marketplace increases business opportunities. You could meet customers with whom you’ve never crossed paths before, or pursue new demographic niches and find new prospects for sales.
You provide multiple touchpoints for clients to connect with your brand when you sell through multiple platforms, online, offline, and everywhere in between. To advertise and sell products, the online marketplace creates an alternative distribution channel.
Low cost of marketing
When compared to other distribution platforms, e-marketplaces may deliver reduced marketing costs. The seller can reach a potential customer with little effort. You can sell right there where potential customers are found without investing either extra time or money. Marketplaces have the benefit that they have their resources, target groups, and customers.
The global e-marketplaces will provide opportunities that you would not be aware of for overseas sales. Through online marketplaces, overseas sales are incredibly easy. In particular, foreign operators, such as Amazon or eBay, typically provide assistance and rights to retailers. In the face of high inventory levels, an enticing price will persuade foreign customers most of all. Provide multiple payment gateways according to customer demands.
These were the major advantages of the online marketplace but never forget the fact that there is a risk involved in every new business. Different types of online marketplaces are classified considering several parameters like their focus, niche, revenue-generating system, etc. If you want to start your marketplace or sell on an e-marketplace then you should study both advantages and disadvantages. An online marketplace might be the ticket to building a big, profitable business with a lasting impact if you can resolve the challenges.