E-commerce Marketplace

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An e-commerce marketplace is an online place or website wherein customers can find products from different brands. You can see an e-commerce marketplace as an online shopping complex where you have an abundance of different brands of products available under one roof. 

There are approximately 26 million e-commerce marketplaces worldwide. The main reason for this widespread industry is the availability of all items in one place enhancing customers’ shopping experience. It has made routine work easy for customers, but it’s an indicator of evolving business strategies. 

In this write-up, we will look at e-commerce marketplaces present across the globe, and some of the benefits people have received throughout the course. 

What Are Online E-commerce Marketplaces?

An e-commerce marketplace is an online store that contains all types of items, big or small on the same platform. Customers can find products from different vendors, shops, or people on a website or well-established platform. 

The e-commerce marketplace is evolving each day. Typically it has been divided into categories such as lifestyle, fashion, beauty, electronics, food items, groceries, DIY, toys, grooming, and so on. 

The online marketplace has become one of the biggest sectors generating a good amount of revenue. Going by the stats for 2021, global e-commerce stands at US$4.9 billion and is expected to reach US$7.3 billion by 2025. 

How Does an E-commerce Marketplace Work?

To begin with, an e-commerce marketplace is a place where customers can buy and sell products via an online platform. The range of products could vary from electronic items to beauty products and the transaction can be made both online and offline.

There are various e-commerce marketplaces an entrepreneur can build depending on the products and business type. One of the most basic business types is selling on any social media platform. Customers can simply contact the entrepreneur to book their purchases. Moreover, the marketing and customer acquisition cost is meager, and it usually favors the people who establish their marketplace on social media.

Another could be your online website, where you can sell your products. Various tools are available to optimize your search engine and build your backend. However, making your website could be expensive for a start-up since it requires capital for customer acquisition, marketing, customization of online stores, advertising, and many more things. 

Another is showcasing your products on a B2B platform. It makes the entire process smooth since the market doesn’t necessarily have to maintain the inventory. Promoting your products on a B2B platform connects the retailers with customers through online mode.

From an online marketplace, you can draw revenue through multiple means. One of the most prominent models is subscription-based. In this model, a recurring fee is charged to every customer who wants to access other ‘premium’ benefits of the e-commerce marketplace. You can find the most potential customers interested in their company and are ready to pay some money to acquire premium facilities. 

There are various models on which entrepreneurs run their businesses. They do not rely on one type of model. They integrate different options that can benefit customers. Let’s jump onto the benefits of having an online marketplace. 

Online Marketplaces: Benefits

The online marketplace is a boon for both entrepreneurs and customers. It has benefited people all around the world in numerous ways. Some of these are as follows-

# Faster buying for customers

One of the most prominent perks of the e-commerce marketplace is that customers get anything they want at their preference quickly. Since e-commerce offers too much on its platter, it has become a one-stop destination where they get almost everything they want. 

Because of this, the delivery options have also been adapted to 1-2 or even same-day delivery facilities that increase both business and customer satisfaction.

# Lower operational costs

Retailers used to have brick-and-mortar stores, which required a lot of money to construct, maintain and design. E-commerce saves that portion of your money which you can invest in your products rather than offline stores. 

Setting up your e-commerce store is affordable and demands little investment. Moreover, if you get associated with one of the biggest e-commerce firms, you don’t have to worry about customer acquisition costs. 

# Personalized experiences

With the help of technology, entrepreneurs have learned how to give their customers a personalized experience to stand out. One such prominent method would be headless commerce. It separates the front end from the backend to customize the storefront according to the customer’s reviews. This helps both parties to access the facilities. 

# Companies can easily reach new customers

It is challenging for sellers to reach a maximum number of customers. They only have a certain set of buyers, which is not likely to increase. An e-commerce marketplace gives you plenty of room to increase your customer base. It allows customers to join in from any country corner and shop from any store they want. Worldwide shipping has supported e-commerce businesses, ensuring that the products reach customers at the right time under the conditions.

Benefits of Selling on Marketplaces

1. Fast to launch

An e-commerce business doesn’t require any brick-and-mortar establishment. You have to set up a website or channel for your products and sell it online. Any kind of marketing or advertisement that e-commerce entrepreneurs do are all online campaigns with much less cost than offline advertising. Because everything is online, it is straightforward to launch any type of business on the internet.

2. Established programs

Bigger online marketplaces have established programs installed in their storefront that help customers go through the entire process more easily. For instance, sellers on Google have access to Google Shopping Actions. These established programs are packed with tools that help you to set up e-commerce marketplace and present products to customers. Such programs also help sellers to meet customers expectations of ast and free delivery. 

3. Large customer bases

Online marketplaces come with a large and solid customer base. Customers don’t easily trust everything they see online, especially in the e-commerce world. Building their trust online takes a lot of time and effort. But once established, customer loyalty and satisfaction both fall in the entrepreneur’s favor and work like a charm. This, in turn, increases their customer base because of effective word-of-mouth marketing and brilliant customer reviews. Therefore, it is imperative to build customer loyalty in every business. 

Online Marketplaces: Potential Disadvantages

1. High competition

There are always going to be instances where your products coincide with your competition. Different retailers have different methods and offers for their customers, creating tough competition. Moreover, various big businesses do the same thing as their competitors. But it entirely depends on the entrepreneurs on how they sell their products differently. 

2.  Delays in payment

One of the biggest turndowns for entrepreneurs is a delay in receiving customer payments. However, there are now different online payment gateways available to make the process smooth. E-wallets, QR codes, link payment gateways, credit cards, etc., are some examples. 

3.  High Commission

The sellers who sell their products from a common platform are often charged high commission fees to display their products. The payment is sent to the seller only after deducing the commission fee, which might be an issue for small players. 

4. Site crash

Technical difficulty is unpredictable. Customers can’t buy anything when the site crashes, affecting customer satisfaction. This is why it becomes imperative to have a backup option if any such situation arises. 

Business Strategies for Selling on Marketplaces

Different business models have different strategies to implement in the business. But a few things are pretty common among all the models. If we look at the super basic strategies of the e-commerce marketplace, then they are–

1. Starting a new business on marketplaces

If you’re planning to build your e-commerce store, you can follow a few strategies to kickstart. The first thing is researching the market and selecting the product. Now, this is the first step where you have to be extra cautious about what type of market you are jumping in. Whatever you’re planning to launch has already been established by someone else.

Find your niche by doing deep research about the country and its demography. Even if your products coincide with your competitors, it depends on your creativity in marketing to outsell. How you market your product is more important than what you’re selling. 

2. Expanding your existing online store to marketplaces

Once done choosing the product, start working on expanding your online store to the marketplace. The online store is when you have your website where you sell your products, whereas the marketplace gives entrepreneurs a common ground to sell their products, just like a shopping complex. 

7 Essential Steps for Online Marketplace Success

1. Optimize product content

This is one of the most important steps to consider. As mentioned before, use your product like anything. It always matters how you market your business and product to the audience. Use clear quality images, add images from every product angle, share customer reviews, make your brand logo attractive, and many other things. 

2. Prepare to advertise

Next comes advertising your online marketplace, which leads to the continuation of our previously mentioned point, and that is– marketing. Spread your marketplace on various platforms to various audiences. Flash the USPs of your product, use some catchy jargon or taglines, use traditional marketing techniques such as email marketing and word of mouth, and try something new such as influencer marketing; there are plenty of different ways to advertise your product.

3. Calculate profits

It is very crucial to determine the KPIs of your business. It is not mandatory to use every e-commerce-related KPI but at least three to four of them. Map out the action plans and their relative KPIs, and then calculate how much profit you can achieve. From brand advertising to product delivery, calculate each cost that comes along the way. Subtract the money invested in marketing and shipping, and then consider your profit margin earned. 

4. Automate your pricing

To attract customers to your online marketplace, automate and strategize your price according to the economy. For a start-up, keep your prices reasonable. This way, customers will get attracted to your product or visit your website. 

5. Diversify your shipping strategy

Shipping strategy is one of the main sections of your business success. There are multiple options from which you can choose to deliver your product to the customers. It is seen that 45% of customers abandon online shopping cards due to unsatisfactory delivery options. Customers have some expectations from shipping, especially in the e-commerce market. Buyers should always create attractive shipping options to entice more customers to their business. These options are– free shipping, flat-rate shipping, two-day delivery, and expedited shipping. 

6. Notify your customers

Whatever the case, maintain transparency with your customers at every stage. Keep your customers updated if you’ve made any alterations. Moreover, you can use this in your marketing. Set up pop-ups at the time when they’re leaving your site. Ask for their email ID to notify them of every new campaign or product you’re launching. This way, you can collect customer data that can help you with your business. 


To summarize, the e-commerce marketplace is an evolution in shopping. People from all around the world want to sit back at home and shop with the comfort of their living room. They need a doorstep delivery facility that can make their life even smoother. This is a great opportunity for entrepreneurs to try something different and follow the lead. This is where the online marketplace hits. A place where people can connect with retailers within a few clicks, which is beneficial for both retailers and customers. 


What does the future of online marketplaces look like?

The online marketplace is growing day by day and is becoming one of the topmost industries all over the world. It is expected to generate 6.5 trillion dollars by 2023.

What is the difference between an e-commerce platform and an e-commerce marketplace?

An e-commerce marketplace is essentially an online market similar to an offline one where buyers and sellers meet and conduct transactions. In contrast, an e-commerce platform is a software that conducts an online marketplace.

What is an example of a marketplace platform?

Some prominent examples of e-commerce platforms are- Lazada, Shopify, and many more.

What are the three main types of online marketplaces?

 The three main types of online marketplaces are- Business to Business (B2B), Business to Customers (B2C), and Customer to Customer or peer-to-peer (C2C/ P2P).

What are the types of e-marketplaces?

Different types of e-commerce marketplaces are as follows-

  • Online marketplaces, where products are sold online through platforms
  • Service marketplace that provides online services to businesses
  • Rental marketplaces where customers use products for sometime and pay for the used duration. The fashion and transportation industries are some of the top players in this sector.
  • Hybrid model marketplaces exist in two types: one where customers can sell their products online, and two would be online (advanced) booking of product and leveraging it offline. 

Hyperlocal marketplaces are platforms where products are bought from the local store online and delivered within 24 hours (maximum).

What are the components of a marketplace?

The basic components of the entire marketplace are – customers, sellers, products and services (both digital and physical), front end, back end, intermediaries, partners, and support services.

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