Many people believe that online marketplace and e-commerce platforms may be the same thing. It’s true that both of them are used for online business purposes but there is there a crucial difference between them. Ecommerce website is nothing but a web store of a single seller, while on the other hand marketplace platform is operated by a single company with the help of multiple sellers contribution. Here are 5 most important differences between Marketplace and E-commerce you should know:
1. Different technology approach.
E-commerce storefronts exist to provide an online business presence and thus have been designed for that. They are streamlined for that purpose. On the other hand, marketplace platforms give buyers an one-stop-shop to buy everything they need. The appropriate technology to run a marketplace platform is more complicated. For example modern marketplace platforms supports multiple API integrations with online and offline stores, as well.
2. A scalable model
As a Marketplace doesn’t buy any products, it takes considerably less financial risks than traditional E-Commerce websites that has to constantly invest in stock that may never sell. That way, Marketplaces achieve economies of scale more easily, and therefore allows them to expand faster than E-commerce websites. Obviously, marketplaces are tough to build but they can be incredibly durable and profitable once they reach liquidity.
3. A much larger inventory
It’s obvious that the larger the inventory, the more likely it will be for a customer to find what they are looking for. But there is a trap you have to avoid. You need to deal with attracting clients to your platform and keep them there. Internet users can decide to shop directly at the seller’s site, so you need to build customer loyalty day by day.
4. Marketplace business based on volume
In marketplaces, the margins for each sale are lower comparing to e-commerce sales. It is because primarily earning revenue from the commissions it deducts from sales. So, the more transactions you have the more profits from your side.
5. Automatic Payment Processing
It’s neither an easy job to find a trusted partner to process the money, nor to find seamless technology for such payments. Nummuspay can be your solution! With nummuspay automatic marketplace payments you can board your merchants and manage all communications and interactions between your vendors, while leaving the payout to all parties to Nummuspay. Nummuspay splits the payment based on the commission rate once the shopper’s funds are captured.
