Various Types of Online Marketplaces

Various Types of Online Marketplaces

by GM Malik

Online marketplaces have existed for many years. Currently, the whole thing seems to be moving back into the focus of retailers, especially manufacturers. The online marketplace is quite broad. You can access or build different marketplaces, including horizontal marketplaces startup, vertical marketplaces, and many more.

While the online marketplace landscape was quite clear a few years ago, much has happened here in recent years. In addition to the big names Amazon and eBay, which are well known to the masses, a large number of different platforms with different characteristics and target groups are now available – from B2C Marketplace for handmade items like to the global B2B marketplace in the style of Alibaba or amazon business.

In this article, we will look at popular online marketplace models.

Types of Online Marketplaces

There are now a wide variety of forms and characteristics of online marketplaces. Below are some of the basic distinguishing features of marketplaces, which can be subdivided even more finely. In this respect, the listed distinguishing features should only serve as a first orientation.

Horizontal marketplaces

Such marketplaces are not aimed at specific goods and services. They are open to companies from various economic sectors. They are comparable to classic department stores and offer diverse goods and services. This can include all areas of daily life, holidays, mobility, insurance, maintenance, and repairs. If the individual product areas become too large, they can be spun off into vertical marketplaces. The best-known example of a horizontal marketplace is amazon.

Vertical Marketplaces

This is a branch-specific range of offers focusing on certain branches and goods comparable to special shops. Vertical marketplaces include electronics, entertainment, woodworking, hospital supplies, and more. Vertical marketplaces offer e-commerce, with trading partners communicating throughout the supply chain. Such marketplaces can use e-collaboration to provide trading partners with statistics, product life cycles, market forecasts, and other information relevant to purchasing decisions.

Closed marketplace

As the name suggests, this is a market with a limited number of participants. In the extreme case, there is only one participant, the marketplace operator. Otherwise, a classic example of a closed marketplace is, for example, a manufacturer portal to which, for example, only authorized dealers, partners, or suppliers are connected.

Open Marketplace

In extreme cases, anyone interested can register in an open marketplace and post and sell their products or services there. There is also no limit regarding the number of participants, and the marketplace operator may not know his partners either. You already know Amazon or eBay well enough.

Target Group (B2C vs. B2B)

While most marketplaces address end customers and thus operate in the B2C environment – these include Amazon, eBay, and Etsy – there are now more and more marketplaces that target business customers and are positioned in the pure B2B environment. Examples of B2B marketplaces would include Alibaba and Amazon business. The target group is an overriding criterion here, in which the previously mentioned distinguishing features are also applied.

Transaction models

Especially in the early years, eBay anchored the transaction model, which was initially only possible there as an auction, in people’s minds. After registration, you can bid on the offered products and services in an auction, with the highest bidder awarded the contract.

In addition to the auction model, there are also marketplaces in the style of stock exchanges with constantly updated conditions, as well as fixed price or catalog transactions, as has been the case with amazon or eBay.

Marketplaces, which only function as a kind of “bulletin board” and ensure the presentation of products or services as well as an initial “matching” between suppliers and buyers, have a special position here. Further processing then takes place outside the possible platform, possibly offline. Such models are conceivable, for example, for products and services that require extreme explanation or are individual. Normally, there are no fees here. One of the best-known examples of such a marketplace, at the lowest end of the complexity scale, is eBay classifieds.

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