An online marketplace offers several advantages including ease of starting out, simple payments systems, raising awareness, and ability to collect customer ratings. Some disadvantages include fees that online marketplaces charge, difficulty in gaining customer loyalty, and lack of personalization options for online "storefronts."
An online marketplace is a website where numerous sellers can post their individual items for sale by setting up their own “store” within the website. There are numerous online marketplaces out there—some are created for specific types of businesses, while others are open to anyone. They also vary in the amount of personalization each “store” can have. For example, Amazon.com is not for people with original items, it is primarily a “reselling” website. The store pages do not have customization features for users. Half.Ebay.com is a very similar site, though they have an emphasis on media such as books, music, and media. On the other end of the spectrum are websites like Etsy.com which is limited to only handmade or vintage items. On Etsy, sellers can customize their store page with a personal banner, avatar, and even a blog. Other sites, such as Asos Marketplace, are solely clothing and apparel vendors.Online marketplaces offer numerous advantages to start-up online businesses. These are just a few that I came up with:
1.Ease: Sellers don’t need to worry about how to actually set up a website.
2.A "Transactional Template:" A February 21 article in the New York Times describes the “transactional template” that online marketplaces have set in place to walk sellers through how to post your items, complete payments, and even shipping items.
3.Promotion: By being part of a known online marketplace, sellers automatically have a step above others in getting their name out there. Built in social media features also help this--the previously mentioned New York Times article reports that “sellers [on Asos Marketplace] may never be able to expose themselves to the traffic that we can put in front of them” through blogs, twitter, and facebook integratation on the site.
4.Customer Ratings: On nearly all online marketplaces, customers can “rate” buyers on how smoothly transactions went. This helps sellers to prove themselves as reliable and trustworthy online.
But of course, there are disadvantages to online marketplaces as well. These are some of the drawbacks that I've encountered through my own experience with online marketplaces:
1.Fees: Sellers have to pay the marketplace operator fees for using its services; it could be a set cost or percentage per item or per month. Etsy.com charges $0.20 per listing and a 3.5% sales fee, while Asos Marketplace does not have listing fees, but claims a 10-15% commission on all sales.
2.Customer Loyalty: It is more difficult to distinguish yourself from others; buyers often develop loyalty to the marketplace, not individual sellers.
3.Freedom/Personalization: Online marketplaces offer varying amounts of personalization on seller’s pages. Participating in online marketplaces also means that you must adhere to the “rules” of the marketplace.
For many people, online marketplaces just make sense. In a February 22 article, The New York Times recently reported the success story of a shop called Madam Popoff Vintage, run by Deborah Ellis. Deborah owned an actual vintage clothing shop in England and joined Asos Marketplace to boost her sales. She reported that many unsold items in her shop sold immediately upon posting on Asos. She claims that “joining the Marketplace saved me from going under."I personally feel that the pros for online marketplaces outweigh the cons; online marketplaces offer an easy way for online businesses to start out with out quite as much pressure as building everything from scratch
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ReplyDeleteEcommerce developer