The marketplace is today defined as an Internet site on which independent sellers, professionals, or private individuals, can sell their products or services online in return. In the most well-known cases, a commission is levied by the site on each sale. There are other economic models based on fixed fees on sales, subscriptions, insertion fees, lead pricing, or services to sellers. Some merchant sites such as eBay or Rakuten are pure marketplaces. This means that they only offer products from third-party sellers. Others, such as Amazon, or Cdiscount, host the products of these third-party sellers alongside their own product range.
Over 60% of sales already happen through marketplaces according to Lengow. And some of the most successful companies worldwide (Airbnb, Amazon, Uber) operate under this model.
It seems that marketplaces are much more complex than other similar businesses. Due to their nature as multi-vendor platforms. But in a matter of fact, the marketplace model is surprisingly lean and scalable for new startups.
3 Types of marketplaces
A vertical marketplace sells products from many sources but they are all of one type. For example, Airbnb connects people who want to rent out their homes with people who are looking for accommodations in that locale. Other well-known vertical marketplaces: Uber, Metro Market, Rover.
A horizontal marketplace sells products of many types but they all share a characteristic. For example, the Office Supplies Market is a Horizontal marketplace, as it sells to all types of industries.
A global marketplace sells everything. The ultimate example of that is Amazon, with over 150 million paid Prime members globally and over 300 million active customer accounts worldwide. It offers a wild range of products, anything you want, you can find it in this marketplace.
It s well known that 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. That’s one of the major appeals of a marketplace. We can offer better visibility to your product by being in a marketplace. But at what price? It’s a question we will answer in further articles.
Now you know what a marketplace is. If you are interested in this subject, do not hesitate to visit on a regular basis the category dedicated to this subject. We publish regularly. And if you have a question or if you want to exchange views on this subject, you can contact us.