5 Things You Should Know About Online Marketplaces vs. Ecommerce Online Store Website

So you are planning on starting an online business? Great. And you have considered whether you should be starting an e-commerce website or a marketplace. If that’s the case, excellent you are reading the right article.

Well then, what is the difference? Traditional e-commerce websites are usually storefronts letting a person sell their wares. Marketplaces on the other hand are different, letting a lot of people sell their goods side by side.

Here are my thoughts to help make your choice clearer.

1. Branding: A singular focus vs strength in numbers.

2. How much will it cost to start something valuable?

Traditional ecommerce usually requires that someone foots the bill to buy sufficient stock, otherwise customers face long lead times as goods are drop-shipped from the storefronts wholesaler. But on the flip side, the items that are sold are used exclusively by the buyer and they can be assured of infinite availability. Traditional e-commerce is a good solution for a single brand selling its own stock.

3. Can users find what they want?

Marketplaces can spend on targeted marketing too, but the cost is borne by all merchants operating on the site. The targeting can be especially effective if the marketplace offers unique products that are tightly associated, addressing a buyer's aggregated need.

Marketplaces additionally benefit from various users operating on their site. As there are many sellers they individually advertise the existence of the marketplace causing a viral spread of awareness. The more happy buyers transacting on the site the more they help to spread the recognition of the marketplace and do so in a more pinpointed way than targeted marketing alone.

Once a user discovers a marketplace, their ability to quickly locate what they want to buy is critical. It is vital that the marketplace operator selects a platform that can allow search criteria to be tailored to the buyer’s needs.

4. Different technology approach.

The appropriate technology to build a marketplace is unique; should offer powerful APIs (application program interface), be a cloud-based software that enables short implementation times, and have a scalable database designed for multi-market use. Modern marketplace solutions support omnichannel technology; integrating physical in-store, web, native mobile, fulfillment, and social commerce channels into one platform.

5. Positive cash flow

Whether you end up choosing to build an online marketplace or an e-commerce website, it’s good to know the differences. The success of marketplaces is growing every day and the trend in the market is constantly evolving. Managing logistical aspects, creating an effective shopping experience and stellar customer service are some of the major aspects that a new business needs focus on to guarantee its success. All things considered, there is no right or wrong answer, just the process of determining what suits your business's future. Identify your needs, preferences, and target audience. Once you’ve done that, it’ll be easier for you to decide whether to use an online marketplace or an e-commerce solution.

About: Paul J Cascun is a co-founder of Arcadier, a world-leading SaaS company that powers next-generation marketplace ideas. Follow Arcadier on Twitter, Facebook, and Linkedin for news and updates.

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Arcadier Marketplace technology enables individuals and organizations to develop their marketplace easily. Learn More. www.arcadier.com