Types of Online Marketplaces

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In times of despair and joy, we often look up to little things that give us happiness and a sense of satisfaction. According to a 2011 study in the Journal of Psychology and Marketing, it was noted that 28% of the shoppers had purchased something to celebrate the occasion or personal victory, and 62% to cheer themselves. Therefore it can be concluded that shopping plays a crucial role in everyone’s lives.

In the present day when the physical world has come to standstill, the virtual one has surpassed all the boundaries and expectations. The recent report by Amazon, clearly demonstrated that shopping for groceries has increased by as much as 50 times in just 6 months of lockdown. Therefore, in this constant cross rapid-fire amongst big business houses, it has become very important for the customers to know what they are looking for and expecting from the virtual marketplace.

The online marketplace can be broadly classified into 3 categories based on the target audience:

  •  Business to Business (B2B)
  •  Business to Customer (B2C)
  •  Customer to Customer (C2C)

 

Business to Business (B2B)

It is a type of online marketplace that acts as a mediator between the seller and the buyer, where the trade of products and services takes place in large quantities.

This kind of marketplace requires a lot of investment and consistency and is hard to establish initially. But once it is established it becomes very profitable and builds up a wide range of
customers. B2B marketplace is a preferable choice for most of the sellers as:

  • They are not required to make their own e-commerce trading website.
  • It provides a wide range of customers.
  • It is quick and efficient.
  • It does not require much investment.

Being a mediator, B2B marketplace has different business strategies and set of terms and conditions for its sellers and buyers.

Based on Commission

It is used most frequently, as the big industries can easily adapt this method and sell their products by giving some percentage of commission to the mediating platform for providing the customers. Some of the examples are Alibaba, freelancer, etc.

Based on Subscription

A subscription-based method is usually opted for by companies who already have customers and buying a subscription won’t be much big of an investment. For example, fashion brands, etc.

Based on Listing Fees

Marketplaces like Etsy take a fee for listing the products and add additional commission chargers to every purchase made.


Business to Customer (B2C)

It is another kind of marketplace where the business industries do not sell their products or services to another business industry but to the customer directly. This kind of marketplace is most popular these days as it helps direct interaction with the customer. For example, AliExpress and MakeMyTrip.
Just like the B2B marketplace B2C also have different types of business strategies and set of terms and conditions.

Based on Commission

B2C marketplace requires the provider and receiver of the service to pay an amount of commission for delivering and mediating the service or products. Travel sites like travelyaari, MakeMyTrip, red bus widely use this method.

Based on Subscription

Unlike B2B marketplace, B2C marketplace requires only the seller to pay for the subscription and not the buyer. For example, eBay.

Based on Listing Fees

Along with the commission, there are some sites like Etsy which also charge listing fees of about $0.20 for a premium listing, etc.


Customer to Customer (C2C)

C2C marketplace is the most convenient form of the marketplace as it allows people with the same interest to share the products and services. Peers can share their services or products they want to offer to people who wish to take those services. It is a very organic way of reducing unemployment as it provides a platform for all range of service providers. A buyer can be a seller tomorrow with no bars. For example, Uber.

Unlike B2B and B2C marketplace, C2C marketplace has different business strategies and terms and conditions.


Paid Promotions

The service provider can promote its product or services by paying some amount to the marketplace, in order to stand out. It helps them attract customers and build up their business.


Paid Promotions can be further divided into 3 parts.
a) Sponsored Vendor profiles

b) Featured Products and Services

c) Promoted Products in cart/at checkout


Advertisement

Another method is the promotion of the product or services by the third party through

Techwink_services_online_marketplace

 

Do you want to build an online marketplace?

Talk to Techwink online marketplace experts and learn how to quickly bring your idea to reality.

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