Build A Robust Online Marketplace with These 5 Best Practices

47% of digital purchases worldwide happen via online marketplace platforms. Here’s how you can build one too.

What is eCommerce Marketplace?

An eCommerce marketplace is an online platform that enlists products from different brands, vendors, shops and persons. The owner of the eCommerce marketplace platform is in charge of attracting customers and processing their transactions. Note that the owner does not own or have any inventory. It is the third-party vendors that deal with the inventory, manufacturing and shipping aspects of the transaction.

While online transactions do offer convenience, they come with their risks. The most prominent of them is safety and security. Customers reveal confidential and sensitive data, and hence, the eCommerce marketplace design must have a robust and rigid infrastructure.

Benefits of eCommerce Marketplace

There are several benefits to inherit from an eCommerce marketplace. These are below.

Faster buying process

An optimised platform means customers can spend less time searching and shopping for what they want. The primary reason is that considerable time and effort is saved venturing out to a physical store. All customers have to do is browse through multiple times and select. Right from searching for the right product to adding it to the cart – the process is quick.

Store and product listing

When searching for an item, customers can see what they need through a product listing. The seller also gets to personalise the information, ensuring an enhanced experience in their store.

Saving in costs

Online sellers save on tremendous costs that come with running and maintaining brick-and-mortar stores, including rent, store design and inventory. But not all businesses can identify the areas where eCommerce can help them reduce support costs and operational costs. All that sellers require in the online space is an eCommerce marketplace platform to kickstart their business.

Advertising and promotions are economical

Sellers spend considerable amounts on advertising, marketing and promotions. Note that online marketplaces are visual channels. Hence, sellers can integrate several advertising tools into their eCommerce marketplace design and push their products by adding videos, infographics, and high-quality images. Also, sellers can customise the eCommerce marketplace template by using DIY features for creating deals, coupons and sponsored ads.

Also read: Implementing The Perfect AI Solution For Your ECommerce Business

No boundaries

The online space allows customers to find items sitting on the shelves in brick-and-mortar stores located far away from their locality. This aspect translates into a global presence that couldn’t have been achieved otherwise.

Let’s talk numbers

According to Statista, as of 2021, Amazon is the biggest online marketplace by capitalisation. Despite being a heavyweight champion for providing a global marketplace eCommerce, newer players keep emerging and riling up. Taobao and Tmall, the two third-party sites owned by Alibaba, were the leading online marketplaces based on the gross merchandise value (GMV) in 2020, with roughly 600 billion USD each.

Typically, the eCommerce marketplace template is to provide everything for everyone. However, this is not for Etsy. Etsy successfully broke the bulwark by going niche. It is a C2C and B2C space that focuses on offering handmade and vintage items. The eCommerce marketplace platform provides its customers with a more personalised shopping experience. In 2020, Etsy saw a 77 per cent rise in its total number of active buyers.

Selling on eCommerce website vs marketplace

The terms eCommerce website and marketplace are often interchangeably used. But, there is quite a big difference between them.

eCommerce is a website wherein a single vendor sells his products or services to multiple customers. Note that the website belongs to the vendor, and he is in charge of all the functions. With that said, when transacting using an eCommerce website, only two parties are involved – the seller and the buyer.

On the other hand, a marketplace is a website wherein the products on sale come from multiple sellers. Think of a marketplace as an assortment; the variety attracts customers. It is the online version of a brick-and-mortar shopping mall or complex. The marketplace works around a tri-party arrangement that consists of a vendor, the customers, and the marketplace owner or administrator.

Upon reading this, one would want to question which is better. Who shall win the eCommerce website vs marketplace battle?

Understanding the processes

The onus of setup and maintenance of eCommerce websites lies with the seller or vendor. The good news is that eCommerce platforms like Adobe Magento Commerce comprise of multiple predefined features and templates.

An online marketplace is where the owner maintains the website, invests in advertising and promotions to attract potential clients. It is the owner’s responsibility to look into the shopping and payment aspects. That is, the owner is responsible for setting up a safe and secure payment gateway. The shipping and storage are handled by the seller (or vendor). They can also use their Facebook or Instagram accounts to set up their store.

Marketplaces charge a commission for every transaction, a flat fee, or a combination of both. When contemplating the eCommerce website vs marketplace dilemma, much depends on the size of the target audience, inventory management abilities, and costs and budget.

Examples of best eCommerce marketplaces

According to Webretailer, the top-ranking online marketplaces for 2021 has Amazon at the first position with 5.2 billion monthly visits, followed by eBay with 1.7 billion monthly visits. At the third position lies the Latin American marketplace, Mercado Libre, with 683.9 million.

Examples of businesses selling successfully on marketplaces

For those looking to sell or deal in books, clothing, furniture and electronic items, Amazon is the ideal platform. eBay is best suited for automotive, electronic items, apparel and unique and rare collectables. Running a little different from the crowd, Etsy is where one can find handcrafted or vintage items.

Also read: Top Customer Experience Trends In ECommerce

5 Best Practices

1. Targeted Marketplace Advertising

Ads and listings are vital for online marketplaces. Hence, PPC and SEO hold all the power in the digital world. The relevant ads must reach the target audience at the correct time and on the appropriate platform. This helps elevate online traffic, visibility and sales.

2. Optimised Product Content

There are product listings that people see, and then here are those that people purchase from. The difference between these two is optimised product content. The list itself is of no use if it is not structured. The framework includes various aspects such as product titles, images, descriptions, keywords and categories.

3. Customer engagement

Online sales are all about interaction and integration. Without that, your online marketplace will cease to sustain. Various tools such as chatbots, voice assistance and others help provide exceptional experiences. Repeated purchase requests and loyal customers require responsiveness. Another factor that influences purchases is reviews and ratings.

4. Structured Pricing Strategies

Product information is not all that matters; the pricing structure can be a make or break decision for your eCommerce marketplace. The online space enables a business to use one of two approaches – automated repricing and performance-based pricing. The former is an algorithmic approach wherein the prices automatically adjust to the competition. The latter automatically adjusts prices based on sales performance.

5. Automation of Orders

Automation makes it easier for sellers to speed up delivery times and cut down on shipping costs. This duality is provided by automating order routing, inventory management and tracking.

Also read: 10 Easy Tips To Double The Conversion Rate Of Your Online Store

Conclusion

Now that you know the prominent online marketplaces and the best practices, you should learn more about the various tools, including SEO and PPC. You must integrate the analytical and reporting tools to receive accurate data. Most importantly, make sure to have a robust site infrastructure and a payment gateway.

To help you with the process, we at Apexon reimagine your customer experience through a comprehensive eCommerce platform like magento. Constant revenue streams, real-time communication, and actionable data are unlocked to bring your business on-demand opportunities.

Talk to our specialists right away to hear more about how you can create a marketplace that stands out from the rest.