iNeed: Advantages of starting an online marketplace
Starting a business is one of the best ways to get out of your usual work routine. Furthermore, it enables you to earn more while doing something you’re interested in.
However, one of the challenges many young entrepreneurs face is the platforms they use. Most of them consider creating a land-based store, not knowing that there’s another way to jumpstart their business. On the other hand, other companies are not knowledgeable about expanding their reach.
The best and easiest way to widen the potential of businesses is by creating an online marketplace that customers can easily navigate. Here at iNeed, we want our audience to thrive in the business world through innovation. Check out some of the advantages of starting or joining an online marketplace.
What is a marketplace?
An e-marketplace, also known as an online platform that facilitates the exchange of goods and services between buyers and sellers online. Keep in mind that the vast majority of marketplace proprietors do not engage in actual retail sales. Instead, they are in charge of establishing a common ground for business conduct.
There are four types of online marketplace:
- Hybrid – In addition to selling their products, hybrid marketplaces allow participants to buy and sell products from other companies on the same platform.
- Global – Global marketplaces don’t have geographical boundaries, making it easy to sell products from all over the world.
- Horizontal – Many products with similar characteristics can be found on horizontal marketplaces.
- Vertical – In vertical marketplaces, products of the same type are available from various vendors who all compete against one another.
Increasing your customer base and attracting new ones are more accessible and efficient when using online marketplaces. For small businesses, it’s a lot easier to get their products in front of a larger audience compared to a retail store when they use online platforms.
When someone searches for a specific term on a marketplace site, your products and services will appear alongside those of other brands and distributors, which is beneficial to both parties. In the event that your pricing and customer reviews are both favourable, you may be able to take advantage of the high level of competition.
An e-commerce website for marketplace applications can be launched at the exact cost of an online store, saving money on both prices. But No matter how complicated an e-marketplace may appear, it can be customized to meet the specific requirements of a diverse range of vendors and customers.
Choosing a revenue stream that beats the market niche and is aligned with the business objectives is entirely up to marketplace owners. Keep in mind that how a platform’s owners make money determines the platform’s success. It’s best to stick with a single monetisation strategy, but it is possible to combine several approaches to meet your goal.
Another advantage of marketplace platforms is their ability to foster trust. For first-time buyers of new brands, eBay and Amazon are well-known names, and they prefer to purchase from these companies rather than from an unknown online retailer such as Amazon.
- Improved visibility
Having a well-optimized website indexed by the major search engines will make it easier for customers to find your products on the internet. You have complete control over where customers end up after clicking on a search result link on your website.
- Customer interest
The unique selling point of an e-major marketplace is that it brings together offers from a diverse range of suppliers or service providers. Customers prefer to use an app rather than limiting themselves to a single service provider because they have more options.
- Interpreting data
Detailed metrics allow marketplace owners to monitor and interpret their sales real-time. It’s possible to see which products and services are popular and which suppliers customers prefer. Furthermore, owners can promote products and services of real value to their customers.
There is no need to open a physical store and inventory if you have an online marketplace to sell your products. Working with vendors who can provide you with goods you require will save money on your purchases. An order may be accepted or rejected depending on various factors, including the availability of the product and the scheduled delivery time, which is entirely up to you.
If you’re running an online business, marketing is essential. It is more difficult for a customer to find a local store than for a customer to find an online store because they are less visible.
Keep in mind that it’s challenging to stand out from the crowd without a strong marketing campaign. To promote your business online, you can take advantage of the digital revolution that has been a boon for a while now. Clickable banners and strong SEO practices are just two methods for promoting your products.
- Low risk
Investments with less money are less risky than investments with a more significant amount of money. This holds for businesses both online and off. Due to lower startup costs, the former is less risky. So if you have a proper inventory system in place, an online marketplace is far more scalable than a physical store. And if you happen to have a good supplier relationship and your product demand is steadily increasing, your business should be scalable.
When international trade operations can be conducted around the clock, time constraints and concerns about varying working hours are alleviated. There is no need to wait for the store to open because these marketplaces can be operated from any location. The e-market is exceptionally convenient for both sellers and buyers.
Daily, sellers receive numerous requests for quotes or products from both new and returning customers. An e-marketplace broadens the range of business opportunities available to consumers. You get a shot to meet customers you’ve never met before or the chance to explore new demographic niches and uncover new sales opportunities.
- Overseas reach
Using global e-marketplaces opens up a world of international sales opportunities. Online marketplaces facilitate global sales. For example, the assistance of foreign operators like Amazon or eBay is common. Furthermore, pricing is most likely to sway foreign customers in the face of high inventory levels. Wherein, you can offer a range of payment options to your customers.
Best online marketplaces
Shoppers are likely to choose online shopping over going into a brick and mortar store. But as a vendor, you have the ability to make a customer’s shopping experience easier by choosing the right marketplace that suits your products and services. Check out the list below:
Amazon has grown to become the most popular e-commerce site in the US since its inception. As of 2017, Amazon had 5 million marketplace sellers and 197 million monthly US customers. This is the best option for medium-sized businesses that reach millions of potential customers and handle traffic spikes.
One of the most appealing aspects of the Amazon marketplace is the strict product listing guidelines that are in place. The product listings are the same whether a customer sees your products or an Amazon listing. Associating your products with Amazon’s helps you sell more of them.
Established in 1995 as an online marketplace for used goods, eBay is now a major online retailer. Selling new and used items on this marketplace is ideal for sellers willing to bid higher prices. No application is required to use eBay; it’s great that you can create an account and post your first free ad. So if you’re just getting started and don’t yet have a website, the eBay Seller Hub can help you get started.
Walmart was launched in 2000 and became the world’s largest online retailer. A whopping 43% growth in e-commerce sales was seen last year — and this growth isn’t slowing down. This marketplace is ideal for medium to large-sized sellers who are looking to expand their reach.
Just keep in mind that an application process is required before you can sell on the marketplace, but once you’re approved, you’ll have access to over 110 million online shoppers each month.
Jet is a relative newcomer to the scene regarding online marketplaces. It was first introduced in 2015, and Walmart acquired it shortly afterwards. Selling to price-conscious millennial city dwellers on Jet’s online marketplace is a perfect fit for the company’s mission. According to the most recent statistics, there are approximately 400,000 monthly visitors and 2,400 sellers.
Etsy is an excellent platform for small to medium-sized businesses specialising in handmade or vintage goods because it caters to customers looking for one-of-a-kind products.
In contrast to other marketplaces, sellers on Etsy are not affiliated with the Etsy brand and are free to sell their products. Keep in mind that customers will be aware that they are purchasing from you rather than a third-party seller if your products appear to be sold by the marketplace.
If you’re looking to purchase from an online retailer, Rakuten is your best option. It can reach many buyers because it is based in Japan and is an online marketplace. Medium-sized and large sellers who want to expand their business beyond North America and reach new markets can benefit from working with Rakuten.
Once your application to become a seller on Rakuten has been approved, you will be provided with a storefront that you can personalise so that customers can quickly identify your company from others in the marketplace.