How do I implement a marketplace platform

What are the differences between an e-commerce and a marketplace?

Many people believe that the online marketplace and ecommerce platforms can be the same thing. It is true that both are used for online business purposes, but there is a crucial difference between them. The e-commerce website is nothing more than a single seller's webshop, while the marketplace platform is run by a single company with the help of multiple sellers. Here are the top 5 differences between the market and e-commerce that you should know about:

Within the various technological approaches, it must be emphasized that the e-commerce showcases exist in order to offer an online commercial presence and are therefore designed to do so. They are streamlined for this purpose. Marketplaces, on the other hand, offer buyers a one-stop shop to buy anything they need. The right technology to manage a market platform is more complicated. For example, modern marketplace platforms support multiple API integrations in online and offline stores.

This is referred to as the scalable model in relation to the management model. As much as the market is buying products, you are running significantly less financial risk than traditional ecommerce websites that have to constantly invest in stocks that may never sell. In this way, markets more easily achieve economies of scale and therefore can expand faster than e-commerce websites. Markets are obviously difficult to build, but they can be incredibly long-lived and profitable once they hit liquidity.


Understand the marketplace

Whether you are a new business or have been in business for several years, you will get more ecommerce sales. Where most people assume that the online marketplace and ecommerce websites can be the same thing.

While both are used for online business purposes, there are some fundamental differences between them. For example, a marketplace is an online platform where the website owner allows third party vendors to sell on the platform and bill customers directly so that multiple sellers can market their products to customers. The marketplace owner neither owns the inventory nor bills the customer. In fact, it's a platform for sellers and buyers, much like what happens in a physical market.

In contrast, an ecommerce website is a one-brand online store or a multi-brand online store, where a particular brand sells their own products on their website. The inventory is the sole property of the website owner. The website owner also bills the customer and pays the VAT. There is no way to register as a seller, much like there is in a retail store. And it's custom. An ecommerce website is also known as a retailer website where a shopkeeper can run the website to sell goods.

In other words, a marketplace can be an ecommerce website, but not all ecommerce websites are marketplaces. It may sound confusing, but here are 10 key differences between a marketplace and an ecommerce website that you should know about.

The reality is that the best place to sell online will vary from provider to provider depending on your products, needs, and goals.

Here are 10 differences between the market and e-commerce that you should know about.

Marketing and targeting approach

It is very important to have a clear concept of your approach to marketing and your targeting in the online marketplace and e-commerce business. While in ecommerce you need to focus on targeting buyers, in a market you need to attract not only buyers but also sellers, who are the heart of your platform. In e-commerce, the individual retailer has to spend more to drive traffic to their website.

Once a buyer has found their selection, the selection process is easier as they choose from the products offered by a single company. Markets, on the other hand, benefit from having multiple users trading on their website. Since there are many traders, they individually advertise the existence of the market, which leads to a viral spread of awareness. The happier buyers are with transactions on the website, the more they contribute to spreading market recognition.


A market does not sell or buy products. So you are taking significantly less financial risk than ecommerce sites that have to constantly invest in stocks that may take time to sell, or that never get sold. As mentioned earlier, markets are more likely to achieve economies of scale and therefore allow for faster expansion than ecommerce websites.

If traffic is growing very quickly, new providers may need to be found to meet demand. However, you don't have to worry about spending a lot of money on new inventory or storage facilities.

Larger inventory

Remember, the bigger the inventory, the more likely buyers are to find what they are looking for. Having a large inventory often means extra marketing efforts to get your visitors' attention, even if they are interested in the website.

The Pareto Principle, also known as the 80/20 Rule, tends to apply to the development of markets as a minority of products make up the majority of sales. Sometimes, maintaining a larger inventory can lead to problems storing something else that will sell better. On e-commerce websites, the Pareto Principle means that at some point you have to get rid of unsold products in order to massively lower their prices. On the contrary, in the markets you can deactivate a product that is not sold with the push of a button. Since you have never bought the products before, there are no costs.

Time and money

Building your own ecommerce website can be as simple or complicated as you want. There are many problems associated with this. So there will be a lot of time and work going into building and maintaining your ecommerce website. However, since everything stays ready in a market, you can register, list, and sell without investing a lot of time and extra work.

Again, because ecommerce websites have a higher initial investment, they take longer to break even. Markets, on the other hand, have better profit margins since their revenues are essentially percentages of transactions. Depending on the transaction volume, this is the money earned that is generally reinvested in product development to accelerate growth.

A volume business

In the markets, the margins on each sale are lower compared to ecommerce sales. This is mainly due to the commission income that is deducted from sales. As a result, markets have to sell higher volumes of product than e-commerce.

Trend indicators

There are trend indicators that are used to identify trends in the trading markets. They also indicate the direction of price movement. Using trend indicators, markets can more closely track your sales. They also know which products are the best and which salespeople are the most efficient. As a result, you can take the best and most effective steps to promote the content that really matters to your users.

Committed public

Public participation is very important in online business, be it in a marketplace or an e-commerce website. Markets have always been transaction-oriented and the goal is to connect buyers and sellers. Markets tend to focus solely on getting buyers to buy and sellers to offer more products or services. In fact, markets benefit from network effects: more buyers attract more sellers and vice versa.

It is difficult to attract the audience to the e-commerce business. It's time consuming and expensive. Even after gaining some experience, you may still be targeting the wrong people. Various social media like Facebook can go a long way in attracting audiences.


Building trust in a market and e-commerce is essential for you to be able to sell online. Your users need to trust your platform and others. 67% of customers trust a purchase in a known market even if the retailers selling the product are unfamiliar. If shoppers have a satisfactory experience, 54% will buy from the same market again, and trust is an integral part of that experience. This is quite difficult to do on an ecommerce website as it is managed or managed by a single person.

technical aspects

There are currently a large number of tools on the market for building an ecommerce website. The best known are SAP Hybris, Salesforce Commerce Cloud or Magento. Markets provide a one-stop shop for buyers to buy anything they need. Therefore, marketplace solutions were tailored to the specific needs of market buyers and operators from the start.

The technical aspects of building a market must be unique. It must offer powerful application program interfaces (APIs), be cloud-based software that enables short implementation times, and have a scalable database that is designed for use in multiple markets. Modern market solutions are compatible with omni-channel technology. Assimilation of the physical channels of business, web, fulfillment and social commerce on a single platform.

More complex navigation

In a market, the products are organized into a well-organized set as it is dominated by multiple vendors who have their respective product lists. However, on an ecommerce website, the arrangement of products is based on categories. There are more detailed and therefore more efficient filters for the research bar so that the user can then refine their search much more precisely. So, in terms of the browsing process and patterns, there is a huge difference.

Other elements in their differentiation

A marketplace is an ecommerce platform, but not all ecommerce websites are marketplaces. What are the differences between an ecommerce website and a marketplace? Here are the most important ones to support you on your way to market:

The main difference between an ecommerce website and a solutions market

1. Small investment, great platform

Ecommerce Website: To start an ecommerce website, it is often necessary to invest a lot of money upfront in order to attract big buys buyers.

Market: When it comes to markets, the advantage is that sellers can manage their stocks themselves, which greatly reduces your initial investment. Marketplaces can index more products than an ecommerce website because the product collection comes from multiple sellers. While the cost of launching a robust marketplace is roughly the same as that of an ecommerce website, the simplicity of a marketplace is much higher.

2. Mass inventory

For the marketplace: With a large inventory in a marketplace, customers can easily find the product they want. However, a large catalog would require more marketing efforts.

For the ecommerce website: on an ecommerce website, you will need to remove some unsold products or at some point lower their prices because stock keeping will leave you unable to get something that sells more.

In a marketplace, you can get rid of an unsold product with just one click. Since you did not purchase the products, there are no costs.

3. Big and complex

A marketplace brings together product lists from multiple sellers, but organized into a well-organized catalog with more references than an e-commerce website. Therefore, a well-developed navigation system and efficient search filters are required that allow users to refine their search more precisely.

4. Positive cash flow

Ecommerce: Ecommerce sites that initially made higher investments will take longer to collapse their revenues and resources.

Market: Markets generate better profit margins because revenue is made up of the percentage of transactions. Depending on the transaction volume, the money earned is often reinvested in product development to accelerate growth.

5. Product selection

A market offers a variety of products. Since many different manufacturers sell on the same platform, there is more choice to choose from than in a normal online shop with a small number of brands. In addition, markets are often used by small businesses to sell used products, so lower prices are also expected.

Nowadays there are numerous ecommerce website building solutions available in the market such as: B. SAP Hybris or Magento. The market trend is constantly evolving and its success is growing every day.

What is the marketplace?

The word marketplace comes from the union of two terms in English:

Market, what market means

Place that is place.

It can thus be understood as a shopping location, a kind of virtual shop window that presents customers with products from different brands or companies.

Given the e-commerce universe, this model acts as a collaborative trading portal. But there is a difference between them.

E-commerce can be understood as a virtual business typical of a particular brand or company. It uses the B2C concept, which connects the customer directly with the company.

E-commerce would therefore be an online shop that only sells the company's products itself.

However, the marketplace is a meeting of several companies on one platform.

The best example to define it is a mall, but in a virtual environment.

This model not only enables the customer to be in contact with products from different stores, but also enables business between the companies involved, as it uses business to business and business to consumer or B2B2C, among others.