With the ever-changing commerce and economics, marketplaces and e-commerce are two of the most well-known and well-known areas for purchasing and selling whether in bundles or individually.
Buying and selling is something that impacts the future economy and pricing, and competition among them is increasing these days, and getting its knowledge is important.
Key Takeaways
- Marketplace refers to a platform where multiple vendors can sell their products, whereas E-commerce refers to a platform where a single seller sells products directly to customers.
- In a Marketplace, there is more variety of products available than in e-commerce.
- Marketplace follows a commission-based revenue model, whereas Ecommerce follows a profit-based revenue model.
Marketplace vs eCommerce
A marketplace is a platform where multiple sellers can list and sell their products or services to potential buyers. The marketplace operator charges a commission on the sales made through the platform. E-commerce is a term used to describe the buying and selling of products or services online.
A marketplace is a website that offers products out of a variety of suppliers. It offers a diverse range of products that appeal to a broad variety of customers.
This operates similarly to a shopping center. A marketplace consists of three parties: the marketplace operator (the person who runs the website), the merchants, and the buyers. Popular marketplaces include Amazon, Alibaba, and Etsy.
eCommerce refers to a website that sells things from a single seller to a big number of buyers. Because the seller controls the website, the transaction only includes two parties: the dealer and the buyer.
If one’s products are well-known or sell well, it’s always a smart idea to set up an eCommerce site.
Comparison Table
| Parameters of Comparison | Marketplace | eCommerce |
|---|---|---|
| Definition | A marketplace is a platform that sells items from many suppliers. | An eCommerce portal sells things from a single seller to a large number of clients. |
| Involvement | The marketplace operator, suppliers, and buyers are the three parties involved. | There are just two parties involved in the transaction: the vendor and the buyer. |
| Inventory | They don’t even have inventory because they simply provide a platform for merchants to interact with buyers. | Unless they use drop shipping, they must keep products on hand in terms of meeting client demand. |
| Cost and Time | Vendors could save time and money at first because they do not have to establish or manage a website. | It will take time and money to set up and manage an eCommerce site. |
| Seller | Sellers can leverage customer trust and market recognition to gain rapid access to a wide community of prospective customers. | When a seller creates an eCommerce business, they must invest both money and time in marketing the site and brand. |
What Is Marketplace?
Marketplaces make revenue by billing vendors and consumers a royalty. Various marketplaces impose a one-time membership fee or a combination of the two.
The royalty varies depending on the marketplace. In general, platforms such as Craigslist, Amazon, and eBay charge commissions ranging from 5 to 15%.
The primary benefit of selling in a marketplace is that suppliers will not have to worry about website upkeep or functionality. The majority of marketplaces also provide free storefronts.
In most marketplaces, launching a store or creating an account is fairly simple and only takes a few steps. One can sometimes log in using their social network accounts as well.
Let’s take a good peek at how Amazon operates. The Amazon corporation is now in charge of the website’s upkeep. They devote time and expense to engaging prospective customers and providing a secure purchasing experience.
However, once the client submits the transaction, the goods are not dispatched by the marketplace; rather, they are stored and dispatched by the seller.
Some of the first online marketplaces catered to business-to-business (B2B) transactions. VerticalNet, Business One, and Covisint were among the first online systems that facilitated business-to-business e-commerce.
Current B2B online stores, such as EC21, Freelancing, and eBay Business, concentrate on a small spectrum of certain products or services and have not gained the domination that B2C retail online markets have.
Online marketplaces must support sophisticated transactions, including a request for proposal, and ask for information, or a request for quotation, to facilitate B2B purchasing.
What Is eCommerce?
Because eCommerce platforms are the responsibility of sellers, they must be established and operated by vendors. They must also ensure that the locations are safe and operational at all times.
However, building an eCommerce website is no longer complicated, so there is no need to build it all from the ground up. E-commerce platforms such as Drupal, WooCommerce, and Shopify provide a plethora of pre-configured features and designs from which to pick.
eCommerce enterprises could also use any or all of the ones that follow: internet ordering for retail sales straight to customers via the website and mobile app, as well as a lot of discussion via chat session, bots, and virtual assistants; offering or engaging in online marketplaces that handle third-party business-to-consumer (B2C) or consumer-to-consumer (C2C) sales; B2B digital information interchange; marketing to new and existing customers via e-mail or fax (for instance, newsletters); engaging in pre-launch marketing for new goods/services; digital banking platforms for exchange rates or trade.
eCommerce operations are primarily concerned with fulfillment. Online markets and merchants must figure out the best approach to completing orders and sending merchandise.
Because they cannot afford to employ an outside provider, small businesses frequently manage their own logistics operations. Most large corporations engage a fulfillment service to handle their logistical needs.
Main Differences Between Marketplace and eCommerce
- A marketplace is a network that includes products from a variety of suppliers, whereas an e-commerce portal offers commodities from a single vendor to a large number of customers.
- Three parties are participating in the marketplace transaction: the marketplace manager, providers, and consumers, whereas there are only two main parties related to the eCommerce transaction: the seller and the buyer.
- Marketplaces don’t have inventory since they merely provide a venue for retailers to communicate with consumers, whereas eCommerce and drop shipping require them to retain goods on hand to meet client demand.
- Market vendors may initially conserve time and money because they do not have to develop or administer a website, whereas eCommerce requires time and expense to set up and maintain an eCommerce site.
- Marketplace vendors can use customer trust and industry familiarity to obtain quick access to a large community of prospective customers. When an eCommerce seller starts an eCommerce company, they should invest both cash and effort in promoting the site and brand.
- https://www.tandfonline.com/doi/abs/10.1080/17517570601088380
- https://dl.acm.org/doi/abs/10.1145/2063576.2063902
Last Updated : 16 July, 2023
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.
