A virtual marketplace, also called an ecommerce marketplace, allows third party sellers to sell their wares. These third party sellers could be individual traders, large-scale manufacturers of goods, or anything in between.
Unlike conventional ecommerce websites, marketplaces transfer the burden of maintaining inventories, logistics, images, product descriptions, and pricing to the seller. There is more than one operational model for marketplaces, but the most common method involves marketplaces being merely an order booking mechanism.
Marketplaces display the seller's wares, collect orders and payments, forward orders to the seller, track delivery, and release payment to the seller after deducting a fee.
The Advantages of a Marketplace Model
For the E-Commerce player the marketplace model has the following advantages:
- It can sell a large number of Sku’s without maintaining any inventory.
- Operational efficiencies improve as some overheads are transferred to the seller.
- Being a marketplace provider allows you to focus on developing ecommerce technologies.
- Margins improve.
All in all, it seems like a win-win to operate the marketplace model instead of the conventional ecommerce business model. But there are some serious flaws in the marketplace model too.
In setting up a virtual marketplace, the creativity comes in deciding what market to focus on. It's best to find a specific niche. If you're too general in your choice, you're bound to have a lot of competition. But if you do your research and find yourself a little niche that no one has yet discovered, then you'll soon be in the money. For example, you may be a car lover. You want to set up a site relating to vintage cars. However, if you're talking about vintage cars in general, you may find yourself in a whole big pond. Why not concentrate on vintage European sports cars? That way you'll get a very specific clientele, but it's a clientele who knows what they're looking for and who are more apt to buy what they want than the regular Joe.
How can it profit?
A virtual marketplace is akin to an actual marketplace - a venue where vendors and customers get together. The only thing is that this marketplace is on the web. A good example is a dating website. Much like a singles bar in the real world, a dating website is a place where people looking for dates and mates can go, except that the initial meetings are done online. Some years ago, these dating websites were proliferating. To be sure, there are still a good number around but not as many as before.
What are the benefits of an Online Store?
- No paper work needed
- Effective marketing can bring you customers from the first day of business
- Low-cost/high-payback alternative to traditional physical store or mail- order catalog.
- Avoid losing sales to competitors who are online
- Immediate international sales presence
- Shop 24 hrs/day, 365 days/year
- Expand customer base
- A simple shopping cart can make your start in e-commerce fast and affordable
- Set up shop anywhere, no need to re-locate
- Reduce phone cost due to customer support via email
Our custom developed Virtual mart allow you to advertise, sell your products and services to Global markets. We have e-commerce solutions ranging from catalog merchant sites to large, sophisticated business-to-business b2b ecommerce systems.