The main difference between marketplace and eCommerce is that a marketplace is a website that sells products from multiple sellers while an eCommerce is a website that sells products of a single vendor to multiple customers.
Marketplace sites and eCommerce sites are two options you can choose from when you are selling your products online. You should have a good understand a good understanding of these to select the best approach for your business. Both have their pros and cons.
What is a Marketplace
A marketplace is a website that sells products from multiple vendors. It has an assortment of products, which attracts various types of customers. This functions just like a shopping mall. There are three parties in a marketplace: the marketplace administrator (the one who owns the website), the vendors and customers. Amazon, Jumia,Jiji, and Etsy are some popular marketplaces.
How does a Marketplace Work
Let’s look at how Amazon works. The website is maintained by the Amazon company. They invest time and money to attract potential clients and offer a safe shopping experience. But once the customer finalizes the sale, the products are not shipped by the marketplace; they are store and shipped by the seller.
Marketplaces earn money by charging a commission from sellers and customers. Some marketplaces charge a flat membership fee or offer a combination of two. The commission can vary from marketplace to marketplace. In general, marketplaces like charge a commissions that is between 5-15%.
The main benefit of selling on a marketplace is that the vendors don’t have to worry about website maintenance or website performance. Most marketplaces also offer free stores. Setting up a store or opening an account in most marketplaces is very simple and only involves few steps. You can sometimes even log in with your social media accounts.
What is an eCommerce
Ecommerce is a website that sells products of a single vendor to multiple customers. The website belongs to the vendor, so there are only two parties in the sale: the seller and the buyer. If your products are popular or if you have many sales, it’s always recommended to have an eCommerce site.
Since eCommerce sites belong to vendors, they have to be set up and maintained by the vendors. They also have to make sure that the sites are always secure and up and running. But setting up an eCommerce site is not very difficult these days, and there is no need to code it from scratch. There are e-commerce platforms like Vooka which offers a pre-designed features and template.
Conclusion
The main difference between marketplace and eCommerce is that a marketplace is a website that sells products from multiple sellers while an eCommerce is a website that sells products of a single vendor to multiple customers. Both have their pros and cons.