If you’re wondering whether to start and grow an online business, you can consider creating a virtual marketplace! Online marketplaces present an amazing opportunity for small to medium-sized businesses.
An online marketplace is a website or app which facilitates shopping from many different vendors to a wide audience. The marketplace operator does not own any inventory; their business is to present other manufacturer’s inventory to a user, facilitate a transaction, and earn a commission. Amazon is an ultimate example of a thriving virtual marketplace; they sell everything to everybody.
Offering real convenience to consumers, over the last several years the number of marketplaces has exploded. It’s a much broader assortment than any store could offer and an effective portal for connecting buyers with sellers. Consumers don’t prefer using apps from single (eCommerce) retailers. They are more likely to download an app which provides wide range of products, broader than a single store can offer. This is one of the primary reason that allures for a marketplace. Some of the other major benefits of starting a virtual marketplace include:
1. Commerce is increasingly taking place online. Investing in a comprehensive omnichannel strategy is the need of the time.
2. Up-front costs are incredibly low – It is to pay absolutely nothing until you actually sell something.
3. Continuous experimentation is easy – Test different products, pricing and trading terms without risking everything.
4. Grow as quickly or slowly as you want – Work within your budget, resource and time constraints.
5. Get paid instantly – No need to hold stock waiting for payments to clear. No credit collections to worry about.
6. Seller Protection – eBay and PayPal actively protect you from fraudulent buyers, providing you follow the rules.
7. Add another channel to your mix. If you are a small brand with your own e-commerce site, being a marketplace seller will expose you to a wide range of consumers who could be looking for products like yours.
8. Seller support – Get assistance via phone, chat or email.
9. Flexibility – You choose your own working hours. Start part-time whilst working in a day job, and then give your boss the flick when you’re ready.
10. Work with people you trust – Why not make it a family business? Create a business which can be handed down to your children.
Commerce is changing at a very rapid pace. These are but some of the reasons and advantages of having a multi-vendor marketplace. In almost every type of e-commerce today, what makes them move faster and more efficient is virtually unlimited resources, technological capability, and potential.
In the retail industry, it is common for new retail concepts to explode and proliferate the way marketplaces are now. Another thing which is common is that after a time, there’s a shakeout and only the most successful survive. Ultimately, all online marketplaces will all have to prove their staying power by offering efficiency and unique value to consumers. Those that can’t will wind up losing market share the way department stores are now, and eventually, those marketplaces will disappear. Those that can survive and compete effectively will continue to create value and profitability.
The Future of the Virtual Marketplace Model
If we look at the eCommerce industry, marketplaces are here to stay. In fact, the biggest eCommerce marketplaces could be bigger, and more valuable, than the biggest eCommerce players. But the mortality rate of marketplaces will also remain high. Sellers are a fickle lot. They often change providers if sales do not come in. Only the best marketplaces with the good traffic numbers will be able to sustain themselves in this ruthlessly competitive industry.
Are you ready to start your own marketplace? We can help you with a robust, complete, readymade multi-vendor marketplace solution – Rocketbazaar, which is powered by world’s #1 eCommerce platform – Magento. Share your business requirements with us and we’ll reach you with a profitable marketplace solution.