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Cart.com's guide to online marketplaces

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Now that so much of our shopping is done online, it's more important than ever to consider online marketplaces and how they can be made to work for you.

So, if you have a business and you haven't yet started selling goods or services online, now is the time to consider making an online marketplace work for you. If you already have an online store but you're not getting the traction you want, maybe you're not making the best use of the world of online marketplaces, and it's time to broaden your horizons.

If you've got questions about the world of online marketplaces, read on: This article should answer them.

Examples of an online marketplaces

Online marketplaces are simply commerce websites where (as in real-life marketplaces) goods and services are sold by multiple vendors. Just like walking through a real-life mall or bazaar,  you can:

  • Compare prices and similar services
  • Hunt for the best-looking product for your needs
  • Simply browse and perhaps find something that looks appealing and might fit a need you have

What are the three main types of online marketplaces?

Online marketplaces are grouped according to their target audience: business-to-business (B2B), focusing on commercial goods and transactions; business-to-customer (B2C), the kind of online marketplace that sells from a brand to a consumer, like Nike selling through Amazon; and customer-to-customer (C2C), also known as peer-to-peer (P2P), the kind of online marketplace platform you use when you're just trying to sell your used bike to someone else nearby.

Many of the big online marketplaces offer versions of all of these transaction options.

Who are the biggest online marketplaces?

You'll be familiar with the big names in online marketplaces. A proper online marketplace list would have to include:

  • Amazon
  • Walmart
  • Facebook Marketplace
  • Alibaba
  • Etsy
  • eBay
  • Craigslist

There are other European online marketplaces, too (like Otto and Zalando) but we will focus on American and Asian sites here.

Of course, many other sites are trending toward becoming online marketplaces themselves. Google, the world's leading search engine, has launched Google Express, which leverages Google's search results to (ostensibly) find lower prices for consumers.

Instagram, too, offers an increasingly frictionless way of shopping. You just click on the shopping bag icon, which is increasingly ubiquitous. Clearly, the boundary between "social media content" and "shopping" is getting blurrier. Instagram's move also reflects the fact that shoppers often come across things they like online and want to bring them into their real lives with a minimum of fuss (just as once they flipped through glossy magazines and lit on luxury items that looked appealing).

Still, most shoppers take a more active role in finding their goods and commodities, and they have a specific need when they head to online marketplaces — of course, once they're there, they find themselves putting other things in their carts, too.

While they overlap in many ways, and each offers a centralized digital space where consumers congregate, they also all have slightly different focuses, which we'll explore in greater depth below.

What is considered the best online marketplace?

Really, it depends on your needs. A search for "online marketplace usa" would probably result in "Amazon" coming up as the number one resource, which it could very well be, but there are other options out there. This list of online marketplaces shows you some of the top contenders so you can find the best online marketplace platform for you.

eBay

eBay was founded in 1995, primarily as an "honest and open" auction site where shoppers could put in bids on items, new and secondhand. It's got a good reputation for bargain-hunters (or people who think they are getting bargains) and rare items.

Nowadays, eBay offers a mix of brands selling directly (often purporting to be discounted), as well as a marketplace where you can bid on secondhand goods. It generally offers free shipping and returns. It's interesting to note that even very established brands like Adidas sell on eBay. It seems that consumers just prefer going a through a centralized site that offers protections like money-back guarantees and simplifies their shopping experience by offering a bit of everything. These sites, too, are habit-forming, with specials and bargains popping up that consumers want to take advantage of.

The eBay homepage now is a mix of brands posting new items and private resellers hawking old movie posters and tea sets. Surely that is part of its appeal, like an old-fashioned shuk for the modern world — eBay generated $10.2 billion in revenue in 2020, with more than 109 million visitors to its website each month.

Similar sites like OfferUp allow for haggling over prices, which may not work if you're trying to sell at a consistent recommended retail price.

Amazon

When people ask, "what is the best online marketplace?" the usual answer is Amazon (with some demurrals). "Amazon" is also usually the answer to the question, "what is the largest online marketplace?"

Amazon, recently unionized, has been controversial for its treatment of its employees, but it is certainly an online marketplace force (its main revenue generator, though other profits also come from its cloud storage servers and other profit centers like its retail subscription service, Amazon Prime).

Amazon, the leading e-commerce company with a net revenue of almost 470 billion dollars, got its start as a bookseller but is now a behemoth, perhaps the first place consumers go when looking to purchase pretty much anything. Amazon is one of the world's most valuable brands, just behind Apple.

There are many good reasons for this, beyond marketing. Among them:

  • It's easy to make comparisons between similar items on Amazon.
  • Amazon makes returns and shipping easy (with many Amazon customers choosing Prime, a yearly paid subscription service that covers their shipping costs while also throwing in a movie and TV streaming service).
  • Amazon has a truly enormous range of brands, ranging from famous to newer ones.

On that topic, because Amazon really is like a giant warehouse, there isn't a lot of oversight. The general vibe can be "buyer beware," as goods could be just as easily sold from unvetted vendors. Many customers appreciate the easy returns since sometimes you don't quite get what you expected.

Facebook Marketplace

Facebook Marketplace is an extension of Meta's still-popular (if decreasingly so) social networking site. On Facebook, you can congratulate newlyweds, message friends — and buy and sell stuff on Marketplace.

While the site is largely for local purchases (mostly secondhand), corporate sellers can also sell goods there.

The strength of Facebook Marketplace depends on how much time your target audience is spending there. There are no listing fees for Facebook Marketplace, but you will need to be deemed suitable by Meta to sell your items there. Marketplace offers advantages like real-time messaging, mobile-friendly listings, and the fact that so many people do spend time on Facebook or other Meta sites — to the tune of roughly 2.93 billion monthly users.

Ali Baba

Ali Baba is China's online marketplace giant and has a Chinese business-to-business (B2B) focus. It sells enormous wholesale amounts of all kinds of goods, allowing shoppers to buy directly from factories, whether to resell themselves or process them into other items. By the end of 2021, Alibaba had 882 million active consumers.

Alibaba's subsidiary sites are important to note:

  • AliExpress is a B2C platform, more like Amazon. It focuses on small businesses in China and other Asian countries (like Singapore) that offer products to international online buyers. AliExpress generally offers cheaper prices than Amazon, which may not be appealing to you as a seller.
  • Taobao is Alibaba's C2C marketplace, which actually began as an eBay competitor in China before forcing it out of the market, altogether.
  • Last but not least, TMall (aka Taobao Mall) focuses on direct-to-consumer (D2C) business. (D2C is a retail sales strategy in which a business will build, market, sell and ship a product directly to the consumer, cutting out middlemen. Popular examples in the USA include Warby Parker and Dollar Shave Club).

Craigslist

Craigslist remains a first port of call for many people looking for furniture, apartments, cars, or any other necessities (as well as some questionable services and items, too).

The site has kept up its simple interface since it began as a small, local service in 1995. It's the closest online equivalent to an old-fashioned classifieds section in a newspaper, with basic item descriptions and a few photos (although it also helped lead to the demise of actual newspaper classified ads). Craigslist feels like a local online marketplace, with users listing their city before selling and buying.

Most people who buy on Craiglist (like Facebook Marketplace) are looking to make local purchases for things like secondhand furniture, but the breadth of what's available on such sites is actually quite surprising, ranging from cars and homes for rent to clothing and electronics.

Craigslist is an easy place to sell: Just take some photos and put your item up. It may look modest, but Craigslist generates over $1 billlion annually in revenue. Craigslist ranks in the top 20 most popular websites, ahead of Netflix — so don't rule it out as part of a sales strategy.

Etsy

Etsy is the primary online destination for quirky, handmade homewares, vintage designs, and gifts with a personal touch. It may be synonymous with a certain twee aesthetic, but it has unquestionable power in the world of design and is a destination for shoppers looking to buy unique wares for their homes.

Indeed, Etsy has 31.7 million active buyers, and they come to the site motivated to find things, whether for their own homes or as gifts.

Walmart

Walmart is a juggernaut, second only to Amazon in sales. Indeed, its e-commerce sales grew 97% in the second quarter of 2020, and its overall global revenues in 2021 were $559 billion.

Walmart.com offers reliably low prices and since brands need to be vetted to sell through Walmart.com, it's trusted by consumers.

Why sell in an online marketplace?

You already have your own web store and marketing, right? So, why rely on a bigger place that may not offer you as high a margin for sales? There are actually a few good reasons, which can support you no matter what your current sales goals are. The sheer volume of the numbers above should make the choice an easy one, but additionally, online marketplaces provide you with:

1. Legitimacy

Getting solid reviews on Amazon, for example, is a great way to boost your brand's reputation.

Once you have a loyal customer base, perhaps you can entice them to your own site with other discounts and special offers.

Some online marketplaces, like Walmart.com, require a history of good reviews and transparency around sales to feature your product. Their very acceptance of your goods could end up giving you an extra boost when it comes to your product's online standing.

2. Discovery

Many shoppers go to Walmart, Amazon, or eBay before even googling "best back scratcher" (or whatever they are looking for). Putting your goods in these online marketplaces can be the internet equivalent of getting a great spot in a retail display in the old days.

In spite of your best efforts, consumers may not know you exist until they find you on one of the world's larger platforms. Certainly, in the case of Etsy, small-scale designers and makers have been given a giant worldwide platform they'd never have otherwise, connecting with global consumers — gross merchandise sales on Etsy reached $10.28 billion in 2021.

3. Ease

Each of these sites offers slightly different protocols for sellers, but mostly, they make it quite easy to sell through their sites.

Selling through eBay et al is certainly easier than operating a brick-and-mortar shop and may streamline your operations. It can make launching a company easy (in the case of Etsy, 97% of their sellers operate their businesses from home), giving you additional infrastructure and publicity. They may even take care of things like shipping.

You can boost your success on platforms like Amazon, too, buying additional advertising to boost your posts. This is a helpful strategy, leading to a +40% increase in units ordered.

There are potential downsides to selling in an online marketplace, too, though:

  • With so much competition in the online marketplace world, your product may not stand out.
  • Negative reviews can definitely hurt you, and you may have to respond thoughtfully and apologetically.
  • You may find your profit margins eaten up by platform fees.

How to navigate the world of online marketplaces

The examples of online marketplaces are many and growing, and it can be a big and confusing world out there for sellers. Fortunately, Cart.com is here to help you navigate it, build your brand, and boost sales. We're here to help you bolster your brand and improve your selling experience. If that sounds good to you, get in touch today!

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