What is a marketplace and how does it work?

Modern enterprises have access to many sales channels – one of the most important is marketplaces, which have been progressively taking over various areas of retail for years. This is a completely different solution than a classic online store or auction platform, and their popularity is continuously growing.

What is a marketplace?
A marketplace is an online sales platform where various companies can publish their offers. It can be compared to a virtual exchange – the customer has access to hundreds of competitive offers in one place and can quickly find a product that meets their expectations.

For sellers, presence on a marketplace means:

• reaching a vast number of potential customers,

• building brand awareness at lower costs than with traditional campaigns,

• the ability to use professional marketing tools.

Thanks to this, even small companies can establish themselves in consumers' minds and scale their businesses.

How do marketplaces work?
The foundation is listing an offer with a description and photos, setting a price (including the platform's commission), and fulfilling orders. The marketplace provides payment processing and acts as an intermediary in transactions.

Amazon also features the option of FBA (Fulfillment by Amazon), where logistics – packing, shipping, customer service – is handled by the platform. Typically, sellers use FBM (Fulfillment by Merchant), where they manage shipments themselves.

Online store vs marketplace – differences
An own online store requires significant financial investment in promotion and search engine positioning. The marketplace, on the other hand, offers:

• the ability to quickly start selling,

• lower promotion costs,

• access to ready-made advertising tools and special actions (e.g., Black Friday).

Key success factors on marketplaces include:

• attractive pricing strategy,

• participation in promotional events,

• professionally prepared listings (photos, descriptions, keywords).

Benefits of selling on a marketplace
Selling through a marketplace provides companies with:

• access to new customers,

• greater brand recognition,

• better positioning of offers,

• lower promotion costs,

• the opportunity for growth in local and global markets.

Statistics show that the global e-commerce market reaches trillions of dollars annually, and marketplaces have a significant share in this.

Is it worth starting to sell on a marketplace?
For manufacturers and distributors, this is an excellent opportunity to:

• increase turnover and scale of operations,

• improve profitability,

• promote the brand locally and abroad.

In niche industries, marketplaces open the way to a wide audience, and in popular ones – can quickly surpass sales from an online store.

It's worth making a decision by analyzing the industry, past sales, and business goals.

Happy Selling
Amata Borys-Chudek
Go2Market Crew