What is a marketplace?
A marketplace is an e-commerce platform that brings together several sellers. In exchange for a commission/subscription on the sales it has generated, the merchants benefit from the audience acquired by the online marketplaces. The particularity of marketplaces is that they only offer for sale products from third-party sellers.
Contrary to popular belief, marketplaces are not only for professionals. In fact, individuals can also sell on some of them. For example, Le Bon Coin is a marketplace that allows anyone to sell any type of product (dishes, cars, ready-to-wear clothes, toys, high-tech objects, etc.).
To put it simply, we can easily compare a marketplace to a digital shopping mall, the latter grouping together several merchants in the same space. Customers can buy products from their favourite brands but also discover new ones.
Just like a physical shop, merchants are responsible for their e-shop and must ensure that they offer an attractive digital shop. They are also responsible for processing customer orders, making sure that customers are satisfied, and collecting positive reviews that will increase their sales and visibility on the online marketplaces where they are present. On the other hand, customers place their orders directly on the marketplace, which acts as a relay between the consumers and the shop(s) concerned.
Depending on the marketplaces, the shipping methods and the people taking care of them differ: sometimes only pick-up at a relay point is available, other times home delivery is the only possible option. Moreover, express deliveries (within 1 day or even 2 hours) can also be set up. Some marketplaces also offer click & collect (or in-store collection). Depending on the seller and the terms and conditions of sale, the shipping costs may be charged to the customer, but they may also be charged to the seller. Some marketplaces, like many e-commerce sites, encourage users to shop more by offering shipping costs when their shopping basket exceeds a certain amount.
What are the advantages of a marketplace?
With the advent of e-commerce and changing consumer patterns, marketplaces have become a very interesting space for shops. If they have already developed their own e-shop, they can also sell on marketplaces in order to benefit from additional visibility but also to multiply the media for selling.
However, online marketplaces are particularly interesting for traders who are new to the business and do not yet have a sufficient customer base. Indeed, thanks to the popularity of marketplaces, they bring a huge number of potential customers.
With the multiplication of online shops and the increasing difficulty for small independent e-traders to be visible, marketplaces specialising in e-commerce, which attract a very large number of potential buyers, are gradually becoming essential. In some cases, they can even be an exclusive sales channel, especially when starting an online sales activity.
The different types of Marketplace
The B2B marketplace
The B2B (Business to Business) marketplace is aimed at professionals for professionals. It is a platform for putting professional sellers in contact with professional buyers.
Amazon Business or Retif are examples of B2B marketplaces. The success of this marketplace model can be explained by a change in the behaviour of B2B buyers who want to make professional purchases while favouring an optimal UX or user experience.
The B2C marketplace
The B2C (Business to Consumer) marketplace is aimed at professionals for individuals. It is a platform for putting professional sellers in contact with private buyers.
It is the most widespread and well-known marketplace model. CDiscount, La Redoute, Fnac or Darty are examples of B2C marketplaces. The success of this model can be explained by its pioneering nature and the volume of sales made by its players.
The C2C marketplace
The C2C (Consumer to Consumer) marketplace is aimed at individuals for individuals. It is a platform for putting individuals in contact with one another or for transactions between individual sellers and individual buyers.
It is a very trendy marketplace model, as it promotes the circular economy and the smart economy. LeBonCoin or Vinted are examples of C2C marketplaces. The success of this model can be explained by its accessibility to the greatest number of people and its simplified interface, designed for everyday use.
Marketplace business model
In order to remunerate the operator and the marketplace, several models exist, of which here are three examples:
This will provide a smooth and regular income for the marketplace operator (regardless of the number of orders).
This will be advantageous for the seller who will not have to pay repeatedly, while the operator will have to play with the volume of products and services added to reach its break-even point.
It will facilitate the onboarding of the seller, as the latter will feel more confident (no sale = no deduction).