Whether aware of it or not, it’s likely that the regular internet user has come across a form of online marketplace before. It’s not a stretch of the imagination to suggest that a majority of us have even made purchases from one. What is an online marketplace? Well, let’s see if we can break it down for you.
An online marketplace is a website that falls under the e-commerce umbrella as a site that aggregates the selected inventories of numerous third party suppliers. The marketplace operator, the entity which controls the site, is then responsible for facilitating the transactions that occur through the online marketplace, including making mass payments to the supplier providing services through the marketplace, who are tasked with fulfilling the orders. Sites like eBay or Amazon are excellent examples of popular online marketplaces.
In most cases, online marketplaces provide a wide range of products for visitors to choose from. This is usually going to be the case because of the fact that online marketplaces pull together the inventories of a large number of third party companies.
The industries that an online marketplace may focus on can vary widely. Some online marketplaces are for general shopping while others are specifically catered towards antiques, electronics, or even more specific niche markets. On a side note, due to the fact that a marketplace often has suppliers in so many different geographies, ia marketplace operator should consider using a mass payouts automation system in order to make their payment processes smoother and more reliable, while reducing the manual time spent by their team on this activity.
Since online marketplaces support and feature products from a wide array of suppliers, inventory is usually available for their customers and prices are typically competitive. This contributes to the customer experience as customers can typically purchase what they see online without a hitch. This is exactly why online marketplaces tend to be some of the most frequently visited and fastest growing sites in the world. When it comes to e-commerce, an online marketplace can act as a one-stop shop for online consumers who are looking to save time, money, and effort when shopping for a service.
It is the marketplace operator’s duty to oversee and enable all transactions and to ensure that the funds are being sent effectively to the right suppliers. When a customer places an order, the marketplace operator is responsible for capturing the legitimate payments and informing the supplier that the corresponding items have been ordered and paid for so that the supplier can then fulfill the order and deliver it to the customer in a timely fashion. Furthermore, the marketplace operator will then pay the supplier for their inventory as per the agreement between the two entities.
Here are some examples of popular online marketplaces:
Amazon: Founded in 1994, this mega-online-marketplace originally began as a simple online bookstore. Two decades later, Amazon has grown into the biggest online retailer in the world, offering everything from books to electronics, as well as mp3 downloads, streaming media, and cloud computing services. Amazon now has retail websites for various countries around the globe including the United States, Canada, the United Kingdom, Australia, France, Italy, Spain, Germany, Mexico, Brazil, China, India, and Japan. Though each of these locations are under the same mother company, they operate independently of one another. With so many locations spread across the world, it’s no surprise that Amazon pulled in approximately $74.5 billion dollars in revenue in 2013.
eBay: Founded in 1995 by Pierre Omidyar, eBay found early success during the dot-com boom where they quickly established the appropriate slogan: “World’s Online Marketplace”. Known for conducting sales and purchases in a virtual auction house style, eBay is the largest consumer-to-consumer sales service online. eBay is available for use by both people and businesses. In 2013 eBay saw 16.05 billion in revenue.
Etsy: More niche than Amazon or eBay, Etsy in geared toward handmade or vintage items, tools, and supplies. From custom made, handcrafted jewelry to art, clothing, photography, paintings, sculptures, and more, Etsy offers a homespun touch on most everything they sell, making it one of the first large-scale online curiosity shops. According to Wikipedia as of August 2013, Etsy boasted over 30 million registered users and one million sellers, which had helped them reach an annual total of $1 billion.
Flipkart: Founded in 2007 by Binny and Sachin Bansal after working at Amazon.com, this relatively young company has continued to grow rapidly. Registered in Singapore, Flipkart is now one of the top 10 viewed pages in India. With over $60 billion worth of revenue posted for 2013-2014, it goes to show that upstart online marketplaces are alive in well in the global economy.
Other popular and well known online marketplaces include:
- Ruby Lane
When it comes to business, online marketplaces do not only act as an aggregator of products and services. They also provide customer service (and other services) to the people ordering from their website. This is important because, as far as the consumers are concerned, the online marketplace is the store that they are buying from. When it comes to addressing transactional, delivery, or customer satisfaction disputes, the marketplace operator is responsible for that. According to some surveys many marketplace operators actually excel in the realms of customer service as well as customer experience.