Online marketplaces have grown significantly in the last few decades. These spaces have become ideal platforms for businesses to sell their products or services to clients online. Similarly, sophisticated exchange platforms have become popular amongst companies. As the marketplace expands, buyers and sellers can access products and services from different sources.
In this article, you will learn all about the different online marketplaces.
Online Marketplace Types
As the name implies, an online marketplace is a virtual platform that allows trading. Such markets are dynamic because the platform operators don't own the goods sold. Instead, independent vendors are allowed to offer their products to prospective buyers. These types of markets do not adhere to models used by retailers. Therefore, an online marketplace will enable businesses to sell products to other companies with a bigger gain margin.
Online marketplaces can broadly be classified into three. These types are:
- Vertical marketplaces;
- Horizontal marketplaces;
- Auction-based platforms.
Vertical Marketplaces
These platforms provide clients access to products and services from different sources. Therefore, the customers can browse and choose who to buy from. Examples of prominent vertical marketplaces include:
- Airbnb;
- Booking.com;
- Uber;
- Rover.
These sites offer buyers access to products or services in a unique category.
Horizontal Marketplaces
Horizontal marketplaces usually go beyond their vertical counterparts. Such platforms offer buyers access to a wide range of categories. Websites like Amazon and AliExpress are typical horizontal marketplaces that allow buyers to sell items in different categories.
Auction-based Platforms
An auction-based platform allows transactions between two parties through virtual auction. Once the highest bidder is determined, payment is made for a product or service. eBay is arguably the most popular auction-based site where people can trade via auction. Despite the distinction between these three markets, several hybrid markets have emerged that combine the characteristics of these markets in different proportions.
Building an Online Marketplace
Building a functional marketplace over the internet requires a lot of work. However, most market operators either leverage an existing frame or make a tailor-made solution. Ultimately, the type of model a business adopts determines the platform's flexibility.
Using an Existing Framework
This option is mostly straightforward. All you need to do is take advantage of the resources offered by platforms like WordPress, Magento, and WooCommerce. Additionally, each of these platforms gives you the option to create a platform using plugins and themes. Likewise, this option is usually easy to use and affordable.
Using Custom Solutions
Custom marketplace solutions are usually built to the specification of the operator. They provide the owner with much more flexibility. However, you will need to pay more money to get a custom solution. Likewise, you will need a trusted software developer to work with.
Conclusion
Online marketplaces are essential platforms for trade. They allow buyers and sellers to trade within a well-defined platform. In addition, there are three types of marketplaces which are vertical, horizontal, and auction-based platforms. Likewise, you can build a marketplace using an existing framework or custom solutions. The option you use depends on what you want to achieve.