Marketplace And eCommerce: Differences And Advantages

Marketplace and eCommerce

Definitions and differences between Marketplace and eCommerce

Translated into analog concepts, eCommerce is the sale of products through a specific point. Instead of a physical store, we are talking about a private website in which a brand shows its offer to pursue compensation with its customers.

The marketplace would be the evolution of this logic; a market protected under a shared domain, in which different brands offer their products following basic competition laws. In this case, the consumer chooses based on differences in price, physical characteristics, or availability.

What factors determine the choice of one or the other? Companies are conditioned by their own goals, scope, and visibility they want, as opposed to segmentation and curing leads.

Advantages of eCommerce

Traditional electronic commerce allows companies to directly target specific audiences, through maximum personalization of communication. As long as the offer is made in a closed and unique space, the brand can manage the conversion of leads at will.

On the other hand, the maximum responsibility in customer service and processing of the shipments that the company acquires is offset by the higher profit margin. We remember that in eCommerce the seller keeps the full amount of the sale since there are no digital intermediaries.

And not only that; the investment required to open a website from scratch is significantly higher than that required to be part of an e-commerce marketplace.

Marketplace Advantages

The shared environment translates into a favorable competitive logic for the consumer. Sellers, not having control of the channel, are forced to improve the conditions of their products to achieve sales; reducing prices, expanding discounts, or perfecting features.

This, at the same time, allows companies to continuously evolve without requiring strong leadership or horizontal corporate policies. Like a shopping mall, for example, companies strive to be the best in an objective way.

What is its main disadvantage? The profit margin. By participating in a third-party environment, those involved must pay a pre-established margin for each sale to this operation. In the case of Amazon, for example, it can reach 15% of the amount.

In return, brands forget about having to work on positioning and SEO strategies, and obtain visibility and reach unthinkable in traditional electronic commerce.

In a marketplace, users are the ones who drive certain companies based on the quality of their products, offering them the possibility of adopting passive growth positions.

Strategies to be followed by SMEs and freelancers in a Marketplace

The decisions, in any case, are tied to the claims of the brand. A given more importance to the generation of orders or generating leads. Marketplace and eCommerce; both are complementary solutions, which, in fact, companies usually combine heterogeneously.

What should never be underestimated is neither the existing typology nor the variants in commissions. The virtues of marketplace on-demand, managed, SaaS, community-driven or decentralized, and transaction fees and commissions from listing (fixed rate).

Study and ignore trends

Although there are great references, the ideal is for each company to understand which sector it belongs to, to choose, based on that, the market in which it operates.

For example, a mechanical spare parts company for cars would be more interested in participating in a specialized marketplace, than in Amazon, where differentiation is more complex and visibility is practically nil.

Follow an escalated offer and discard your star product

The idea of ​​participating in a common market goes through diversification. Thus, it is preferable to place the most unknown products of your brand, then the star product; something that would channel all your traffic, stealing customers from your own website.

To avoid this, you can choose to promote the articles as complementary products to the successes that already support your company’s e-commerce. In this way, the marketplace is used as a structural reinforcement for the strategy.

Pursue quality

According to a study, retailers that participate in a marketplace manage to increase their sales by 50% on average.
These increases are derived from a notable increase in visibility. But of course, at the same time, it means putting a greater effort into differentiation. And especially in the description section, where the information regarding features and benefits appears.

It is important not to copy content already presented on your own website, and instead choose to generate value through completely new descriptions capable of avoiding SEO-detrimental duplicates.

Manage and take care of reviews

The differentiation in a marketplace is usually governed by the quality and quantity of the evaluations that users make of the products. That is, having more positive reviews will place your product in higher positions within the platform.

That is why it is important to answer customer questions, and send, whenever possible, reminders for all buyers to visit the section to leave a review.

Don’t forget about social media

Although the advantages of this type of electronic commerce can end up harming the rest of the strategies in other channels, it is always interesting to boost traffic in the marketplace by dumping users from social networks.

Taking into account that it is complex to differentiate oneself in a commerce platform, this added value can be pursued through ad campaigns on Google, Instagram, or Facebook.

The best marketplaces

It will always depend on the type of business and the objectives to be achieved, and that does not prevent focusing attention on the most popular and extensive options that exist today. Amazon is among them, but there are other equally interesting platforms.

Amazon

The most famous Marketplace in the world offers an unimaginable reach in exchange for high sales percentages, ranging from 10 to even 25%. The competition here is incredibly high, and it can be uninteresting for startups with little experience.

eBay

This platform has an interesting bidding and auction system capable of raising profit margins to an exponential level. Of course, the intricate mechanism used can mean too high a barrier to entry for companies with fixed strategies.

Alibaba

The Asian giant offers direct entry to the Asian market and does so without charging any type of commission or interest rate. Its monetization system derives from its Alipay payment system, memberships, and marketing fees that do not fall on the seller.

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