As shoppers shifted online, worldwide e-commerce sales exceeded $5 trillion for the first time in 2022 and are projected to pass $7 trillion by 2025.1 Though many businesses already sell through their own online store, attracting customers and managing digital sales can be difficult and expensive.
With the right online marketplaces, you can get your product in front of billions of customers around the world while outsourcing tasks like marketing and shipping.
Here’s how to use an online marketplace to get your slice of the growing online sales pie and reach more customers in a quick, more efficient way.
An online marketplace, also known as an e-marketplace, is a website or platform that connects buyers and sellers. Marketplaces can be used to sell anything from physical goods to services to digital products, making them the ideal place to grow your business.
Some online marketplaces, such as eBay and Amazon, give you broad access to global audiences, while others, like Shoppee and JD.com, are more popular in specific countries or regions.
Leveraging online marketplaces as part of your online sales strategy can provide numerous advantages compared to relying strictly on your own e-commerce site.
Benefits of online marketplaces include:
There are many different types of platforms that you can sell on. By understanding the different types of online marketplaces available, you can focus your time and energy on getting your products in front of the right customers.
A buyer-oriented e-marketplace is focused on making it easy for buyers to find and buy a wide variety of products from many different sellers. Platforms like Amazon, eBay, and Etsy all fit this model, making this type of marketplace the one most people are familiar with. You would list your products on these types of sites if your business primarily sells products to consumers, known as business-to-consumer (B2C).
A supplier-oriented e-marketplace connects businesses with other businesses, also known as B2B. These platforms act as a critical point in the supply chain by helping business source products, find vendors, make bulk purchases, manage quotes, and access financing. Examples of supplier-oriented e-marketplaces include Alibaba and Thomasnet.
A vertical marketplace lets you focus on a specific niche or industry. For example, a medical equipment manufacturer would likely find more success selling their products on a healthcare-focused marketplace, allowing them to target buyers at hospitals and clinics.
A horizontal marketplace, on the other hand, offers a wide range of products across multiple industries, similar to shopping at the mall or a department store. A business that sells products that appeal to a wide range of users is more likely to reach more customers here than in a horizontal marketplace.
An independent e-marketplace is run by a third-party provider that provides the infrastructure for selling but does not sell products itself. This is compared to popular e-marketplaces like Amazon and Walmart that sell products in addition to listing items from third-party sellers. While these big marketplaces give you access to more customers, keep in mind that they are selling products in competition with you, which means you might not get the preferred placement available on independent e-marketplaces.
Not all platforms are right for all businesses. The online marketplace platform you choose will depend on your business, industry, audience, and overall business strategy. Here’s what to consider when comparing and choosing a platform:
We created a comprehensive online marketplace checklist you can use to compare different online marketplaces. Use the checklist to evaluate their audience, features, integrations, payment methods, and more, so you can find the marketplace that’s the right fit for your customer and your business.
In partnership with three expert business owners, the PayPal Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.
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