by Etaily Admin January 11, 2021

What is Marketplace?

The marketplace is a location where sellers regularly come to offer their wares or services. Today, the marketplace usually refers to the online marketplace where the location for selling and buying is online.

An online marketplace or e-commerce marketplace is a type of e-commerce website or mobile application that connects third-party sellers and buyers. Sellers can use the e-commerce marketplace to list and sell products. The sellers are responsible for managing the inventory and fulfillment of orders. The marketplace’s function is to aggregate product listings, attract customers to the marketplace, and match buyers and sellers, among other functions that help ease shopping transactions. Many marketplaces are free to use but they may take a small percentage of the sales made between the seller and the customer.

Types of Marketplaces

Marketplaces are usually classified according to the scope or business model. 

The vertical marketplace offers a specific type of product or service from different sellers or providers or that caters to a specific audience. An example is Edamama which is designed to carry products for families with the mission to help mamas and their family members and friends in making wise purchases. Zalora, a “one-stop online destination for everything fashionable in the Philippines, is also a good example.

The horizontal marketplace offers a wider range of products and services from different sellers or providers. Examples are Amazon, Lazada, and Shopee. 

The auction-based marketplace facilitates the sale of a wide range of products and services from different sellers or providers to customers who must bid for them. eBay is one example.

A comparison website is a vertical search engine that aggregates product listings from different online retailers. Shoppers use this to compare product prices, features, reviews, and other criteria. Examples are Google Shopping and Yahoo Shopping.


Marketplaces can give many benefits to both customers and sellers.

To customers:

  1. The marketplace offers customers a faster way to search, compare, and choose products from various stores.
  2. Customers can depend on marketplaces to find unique and hard-to-find products. 
  3. Customers can find higher quality products by checking the reviews submitted by other buyers.

To sellers:

  1. The marketplace provides another sales channel that can generate sales even if the seller does not actively market their stores. 
  2. International marketplaces enable stores to have a wider reach and tap international markets easily.
  3. Marketplaces ensure ease of use and assistance to sellers to retain sellers and prevent them from transferring to the competition. 

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