What is an ecommerce marketplace?

ecommerce store

What is it and How Does it Differ from a Stand-alone Ecommerce Store?

Ecommerce marketplaces have been changing the rules of business, significantly for both vendors and buyers. Rapid advancements in digital marketing constantly create new platforms, new technology, new features, and ways to transact business online. All these happen at an ever-changing and fast-paced eCommerce marketplaces. With that in mind, you must always be updated with at least the basics and you can always start from there.

For a business owner, profit means maximum exposure of products to the largest number of prospective customers, and an excellent marketing strategy ensures the success. But where and how to start? Where do I market my products? Where does the large number of sellers and buyers transact?

What is An Ecommerce Marketplace?

In simple terms, an eCommerce Marketplace is a platform where multiple vendors can market their products. In this platform, you can find a vendor that could either be a brand, a shop, or a person. This is different from the traditional stand-alone eCommerce stores, where a single brand of products is sold. However, each platform has its own pros and cons. And knowing which platform to market your products online could either break or make the success of your online business. This important decision is where you should start. Your best practices and business goals should always align with this decision.

                Below are some of the biggest Ecommerce Marketplaces:

Amazon – The big gorilla in the eCommerce industry. Amazon offers third party vendors to market their products and customer gain access to various offerings both from Amazon itself and from vendors in a wide range of product categories. While a vendor can market their products in the platform, all the customers are Amazon’s, and not the vendor’s. This rule is strictly enforced. A reward system, called Prime Rewards program, allows free shipping for third party products. The Prime Rewards program is available under the “Fulfillment By Amazon (FBA)” feature.


Ebay – Unlike Amazon, all product offerings on Ebay are from third party vendors. Fees for every transaction are also structured in different ways. This includes fees for insertion, subscription fees, and final value fees. Vendor to buyer transactions could be completed in two ways – traditional auction or “buy it now option.”


Alibaba – While previously operating only for the Chinese market, Alibaba now opens its door the worldwide market. This step led to Alibaba’s success and now dwarfs the combined revenues of Ebay and Amazon. Alibaba is also widely known for its large number of manufacturers and product suppliers in Asia. The platform includes:


  • This is an Ebay-like platform, where sellers and buyers transact directly with each other. Products are sold via auction or fixed-price. An excellent feature is that vendors are not charged with the product listings. The platform usually takes its earnings from advertising and other services.
  • This is the Amazon-like platform in Alibaba, where small businesses are linked to the consumers. In china, Tmall is the leading business to consumer eCommerce marketplace.
  • Tmall Global. Simply put, this is the global version of Tmall. With the growing demand for eCommerce marketplaces, Tmall Global welcomes foreign companies to publish their product listings. With this, foreign companies are not required to produce a Chinese license to sell to the Chines consumer. An annual fee is charged to the vendor along with a commission fee for each successful sale transaction.


Ecommerce Marketplaces that are also worthy to mention are Newegg, Rakuten,, Etsy, Jet,, and Mercado Libre (mainly targeting Latin America).

Still undecided?

If you are still contemplating on choosing between an eCommerce marketplace and a stand-alone eCommerce store, here are some useful points to ponder:

While there could be many issues and challenges facing a stand-alone eCommerce site, the list below would give you an overview of what to expect to overcome should you choose this platform:

  • Logistics will always be an important part of your business process establishment and management. Customers should be informed of the delivery status of their products. The more often an update is provided to the customer, the better. For most vendors who have stand-alone eCommerce site, this is usually done with an app, where customers can get real-time information about the status of their orders. This is an added investment that you need to take care of if you choose to have a stand-alone platform.
  • Inventory Tracking. Another big issue facing a stand-alone store is its inventory. The problem usually occurs when there are refunds and returns. Tracking the inventory includes what products sell well and what sell worst. Without these data, overstocking could happen. To prevent this, a stand-alone store should implement a tool to keep track of every update in the inventory.
  • In order not to pile up much inventory of products that would just sit around, you should have a tool in your stand-alone store to track of your customer demands and expectations. With these data, you can come up with what products to order first and last. You can get these data when a customer visits a specific page in your site, leaves a specific page, submits a feedback, and customer behavior in ordering products. Your tool should be accurate in reporting these analytics in your stand-alone eCommerce store.
  • Customer Experience and Support. Last but not the least is a very important part of your stand-alone eCommerce store. Your website should be easy to use and navigate. It should include a well-structured pages of each product that include important details such as product description, price ranges, manufacturer, etc. It can never be really summed up in just a single paragraph, but customer experience and support should be a central integration into every aspect of your stand-alone eCommerce site. Everything inside the website that the customer sees always influences their experience.

Ecommerce Marketplaces – Why not?

Ecommerce Marketplaces were created to overcome each and every single problem that is faced by a stand-alone eCommerce store. While having a stand-alone eCommerce store is still suitable for big and well-established brands, eCommerce marketplaces are the way to go for many new players in the industry. Logistics is always handled by the platform. Big issues with inventory, analytics, customer experience and support are prevented by using tools that are integrated and customized according to your needs as a vendor.

An added bonus for an eCommerce marketplace is that you can market your various products without actually having an inventory! This allows you to experience a risk-free transaction in marketing your products. You also have more than one way of monetization in an eCommerce marketplace since there are different offers in every platform. In fact, you could incorporate affiliate marketing and upselling that can add more profit for your store.

However, the fact still remains that there will still be challenges in an eCommerce marketplace. It is not perfect after-all.  What gives it more edge than a stand-alone store is that if you’re just starting out, you can start right away with less hassle and stress, simply with just a few clicks and learning just the basics of the features in the platform.               


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