Marketplace
A marketplace is an online platform where many independent sellers sell goods, and the platform owner takes the orders and payment. Examples in Ukraine: Rozetka, Prom.
Explained in plain words
Wikipedia describes an online marketplace as an e-commerce site where product information is provided by multiple third parties, the operator processes the transactions, and the sellers or wholesalers handle delivery and order fulfillment themselves (Wikipedia).
In plain words: it is a shopping mall on the internet. You rent a "spot" (a product page), the platform brings in the shoppers, and charges a fee for it. The seller does not necessarily store the goods themselves: Rozetka, for example, offers sellers fulfillment, meaning a warehouse and order processing (Rozetka).
How it differs from your own online store
According to Wikipedia:
- a marketplace has many sellers, an ordinary store has one;
- stock is held by the sellers, not the operator;
- the choice is wider and the seller's startup costs are lower (Wikipedia).
Practical consequences (our conclusion):
Own store | Marketplace | |
|---|---|---|
Shoppers | you have to attract them yourself | already on the platform |
Brand | yours | the platform's |
Customer data | yours | limited by the platform's rules |
Competition | only you on the page | other sellers alongside |
Costs | advertising, the site | commission, feed requirements |
Downsides worth knowing
Wikipedia notes that shoppers often choose a seller primarily by price and judge a product only by its description, photos and reviews (Wikipedia). For a seller this means price competition from listing to listing. More on the fight for the best offer is in the article on the buy box.
Where to start
- Check your unit economics including commission, delivery and returns.
- Prepare quality data: names, attributes, photos (see PIM, feed).
- Choose a fulfillment scheme: you ship yourself or use the platform's warehouse (FBO and FBS).
- Do not hand the marketplace your whole business: your own site remains the channel where the customers and the data are yours.
Common mistakes
- Counting only revenue and ignoring commission and returns.
- Duplicating listings with worse photos and descriptions than competitors have.
- Not tracking stock: selling a product you do not have hurts your rating.
- Depending on a single platform.
FAQ
What is a marketplace in plain words? An online platform where many sellers trade under one roof, and the platform takes the payment.
How is a marketplace different from an online store? A store has one seller who owns the shopper; a marketplace has many sellers, and the shopper comes to the platform.
Is it worth selling on a marketplace? It depends on your margin after commission and on whether your own traffic is enough. First calculate the economics per order.
Related terms
Sources
- Wikipedia. Online marketplace — en.wikipedia.org/wiki/Online_marketplace
- Rozetka, seller help. Fulfillment by ROZETKA — sellerhelp.rozetka.com.ua/p363-fulfillment.html
Related
Product feed
A product feed is a file or data stream with the full list of your products (name, price, availability, photo, link) that a store passes to Google, marketplaces and price comparison sites so they can show and sell its products.
Product variants
Product variants are versions of the same product that differ by one or two attributes: size, color, volume, memory. For example, a T-shirt of one model in sizes S, M, L and in three colors.
Stock levels, stockouts and overstock
Inventory management is controlling how much of each product is in the warehouse, how much is needed and when to order, so that you do not lose sales to stockouts and do not freeze cash in overstock. A stockout (out-of-stock) means the shopper wanted to buy…
ABC/XYZ analysis of your product range
ABC/XYZ analysis sorts products by two traits: how important they are to the business (ABC, by revenue or profit) and how stable the demand for them is (XYZ). The result is nine groups, each needing its own purchasing and stock rules.