A lot of people think Marketplace and eCommerce sites are the same. However, although they are both used for online business purposes, there is a real difference between these two platforms.
To put it simply, an e-commerce site is nothing more than an online store with a single seller, while the Marketplace is operated by a single company, but with input from multiple sellers. To better explain you, here are the 5 main differences between an e-commerce site and a Marketplace.
1. The approach strategy
E-commerce sites are in a B2C (Business to Client) approach while the Marketplace is in B2B2C (Business to Business to Client) business. In other words, in an e-commerce storefront, the business sells directly to the customer, but in the Marketplace, the customer is the seller in addition to the buyer. Indeed, the latter plays the role of intermediary between sellers and consumers. Also, the sites of sale are thus remunerated directly, but for the Marketplace, they are remunerated on the commission.
Since you don't sell products directly on a Marketplace, there is less financial risk. Indeed, if you are creating an e-commerce site, you must constantly invest in promotional activities. So the Marketplace allows you to save more money than an e-commerce site. Be aware, however, that a Marketplace is more difficult to set up than an e-commerce site, but it is very profitable once it has reached liquidity.
3. Product Diversity
On a Marketplace, the site administrator is not responsible for the management of inventory. Indeed, it is the seller who takes care of the stocks and since you do not have to take care of the latter, you can then diversify your products to reach more customers. Also, you should strive to attract as many customers as possible to your Marketplace and keep them there. This is because consumers can choose to shop on the seller's site, so you need to retain them on a day-to-day basis.
4. The Activity of the Marketplace
On a Marketplace, the margins of each sale are lower than those of an e-commerce site. This is because the income usually comes from the commissions he deducts on each sale. Thus, the profits, therefore depend on the number of transactions. On the other hand, the administrator of an online store can make a profit easily online by selling his product at a better price.
5. Responsibility for the Sale
Under the law, the Marketplace acts as a broker in a transaction. It offers sellers the possibility of having a secure sales platform so that they can carry out transactions. Thus, the legal responsibility on a Marketplace rests with the seller.
Therefore, if a consumer decides to sue the Marketplace business for damage related to a product purchased on the platform, it is the seller who will be implicated and not the Marketplace administrator. Namely, on an e-commerce site, it is always the manager who is the legal person in the legal framework.
In short, an online store and a Marketplace have everything in common and everything is different. However, they are both effective ways to sell products or services online. So it's up to you to decide whether you want to get into online commerce on a Marketplace or an e-commerce site for your web project.