The marketplace industry is expected to grow from its current $15 billion estimated overall value to $335 billion by 2025. That makes now a great time to invest in a new marketplace business. However, for many, launching a marketplace can feel like a daunting task. The back office, vendors and buyers are all separate facets that must be carefully considered pre-launch. All of this can make launching your marketplace seem a stressful, almost overwhelming, undertaking. The truth is, it doesn’t have to be.
Before the dominance of e-commerce, shopping was traditionally a tactile experience for consumers. That explains why clothing stores have fitting rooms, book stores allow a flick through, and wine galleries hold tastings. Some of these experiences clearly are not replicable online, but with 60% of sales happening through online marketplaces, online retailers have to find a way of recreating this interactivity with products prior to purchase. The answer? High-quality photos. Indeed, images are more important than ever in getting consumers to buy a product.
One of the great benefits of starting a marketplace over an online store is that there is no need for marketplace owners to invest in stock, since external vendors are responsible for upholding the inventory of their products. That is not to say that marketplace managers can wash their hands of all responsibility. Indeed, the quality of content sold on a platform — take Amazon as a prime example — is often attributed to the marketplace platform itself. In fact, their brand reputation often rests on their ability to offer the best quality, and widest variety, of the products their customers are interested in.
Commissions are by far the most popular revenue model for digital marketplaces. Although they might come under different names by different marketplaces - Amazon calls them referral fee, eBay has final value fees and Etsy refers to them as transaction fees - they are all the same thing: a percentage or fixed amount that a marketplace chargers a vendor for each sale they make on its platform.
Original content published by Ecommerce Foundation: ArticleMany of the world's most successful companies operate under marketplace models: Airbnb, Amazon, Uber, Etsy. Indeed. With the constant evolution of marketplaces, Ecommerce Foundation decided to interview Eduardo Aznar, Chief Growth Officer at Shopery. Together, we discussed the relevance and impact of marketplaces in today’s ecommerce society. Shopery empowers leading ventures and brands to build and scale their marketplace businesses through a SaaS solution.