Difference between a marketplace and ecommerce

Index of contents

E-commerce and marketplace have in common that they are online stores, however, their sales and management methods are very different. The main differences are the following:

  • Management: The main difference is that e-commerce is the online store of a single seller who is in charge of the complete management and the marketplace is an online store with several sellers with their different stocks, prices, etc.  
  • Customization: While in e-commerce the seller can modify the design of his online store, in the marketplace the seller is limited because everything is standardized so as not to give preference to any company found there. 
  • Visibility: Marketplace visibility on the Internet is usually higher than that of an e-commerce because marketplaces tend to invest more in advertising and offer a wider range of sellers and products. 

In the case of an e-commerce it takes more time for your brand to be positioned on the Internet since you have to work on SEO or SEM.

  • Appearance of competition: In a Marketplace, having a larger catalog, both of sellers and products, there is more competition that offers, in many occasions, exactly the same product. This does not happen in an e-commerce because the web is from a single seller, so there are no repeated products. 
  • Initial investment: Creating an e-commerce for your own business has a very small cost compared to creating a physical store. On the other hand, selling in an existing marketplace is the most economical option; it will involve the time and effort of uploading the products and managing the orders only. Finally, creating a marketplace to allow sellers to offer their products involves a higher investment, only with the development itself is already much more complex to include different sellers.
  • Profit from sales: In the marketplace, the owner of the site takes a % commission per sale. While in an e-commerce the seller takes all the profits, because there are no intermediaries.
  • Profit margin: In a Marketplace the profit margin is usually lower compared to that of an e-commerce, since you have all your competition at your side and the marketplace keeps its commission.
  • Engagement: It is impossible to create engagement in a marketplace because the customers you have there will never really be yours. Yes, it is true that they leave comments and ratings that will help others to buy more from you, but you will never have the loyalty power that you have in your own e-commerce where you can include up-sells, cross-sells, promotions, newsletters, customer service...
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