Traditional eCommerce is over. Or so some might think! Online marketplaces are springing up constantly and taking the place of traditional eCommerce.
Online marketplaces are springing up constantly and taking the place of traditional eCommerce.
One reason is that entrepreneurs are leveraging online marketplaces to expand their reach. Like many of you, what started as general online shopping has now turned into online marketplace shopping for me.
Instead of sourcing Christmas presents from a range of eCommerce stores, many gifts now go through only one online source, Amazon!
Instead of sourcing Christmas presents from a range of eCommerce stores, many gifts now go through only one online source, Amazon!
Even Draw Names, an online app that makes it easy to "draw names" for Christmas presents, channels all the gift selections through Amazon's affiliate network.
Online marketplaces are forming the new "big box" stores of the internet.
The Growth of Online Marketplaces Isn't Stopping Anytime Soon
Online marketplace growth isn't stopping anytime soon, and they are getting easier to launch by the day. Many online companies allow you to launch an online marketplace. Including Yclas!
This is having a profound impact on the retail industry. Traditional stores are being forced to close their stores. Amazon now even trumps Google when it comes to product searches.
Creating your online marketplace allows you to leverage other entrepreneurial growth. Like the taking of commissions (e.g., Amazon) off of partners' products.
Where you might typically have to source every new product and manage inventory, an online marketplace allows you to leverage the inventory of others (whether that's a service or an inventory item). By creating an online marketplace, you'll be able to reach a much wider audience than if you would through selling only your products.
Create Your Own Marketplace Fast
- Launch your own marketplace niche fast
- Easily connect your own domain name
- Create your own categories quickly
- Create custom fields specific to your requirements
Further online marketplaces create economies of scale and develop trust.
Further online marketplaces create economies of scale and develop trust.
Bizrate marketplaces found the following insights:
- 57% would purchase through the same marketplace again
- 11% would go directly to the same retailer's site to purchase
- 2% would buy through a different marketplace
- 2% would go to another retailer's site to purchase
The emphasis on repeat purchases brings us to our second point.
Online Marketplaces Keep Growing in the Service Industry by Establishing Strong Brands
What initially was thought of as online marketplaces for products has divested into online service marketplaces over the past decade. Platforms like Uber, TaskRabbit, and Airbnb have proven that online marketplaces work for the service industry.
Platforms like Uber, TaskRabbit, and Airbnb have proven that online marketplaces work for the service industry.
What's important for these organizations is establishing a trusted brand. By establishing a solid brand experience, online marketplaces, for e.g., Uber can expand into other areas (Uber discounts, etc.).
Let's try an example.
One might offer an online marketplace that provides mechanical services. You know, you spend time ensuring that only top-notch mechanics provide all the mechanical services on your site.
You ensure they are getting excellent ratings. Do all the right things. If they aren't providing excellent service, you make sure they are removed from your platform.
You ensure that there is a great customer experience. They get all the extra handholding.
With all that good customer service, by extension, if you offer your customers other blue-collar work on your website, the feelings about your services will extend to the other services.
The focus becomes all about ensuring that your customer has a great experience with your brand so you can strengthen the brand. Naturally, as things progress, others then come to you and want to offer their services under your brand.
A good example of this is our friend mamoth Amazon.
People shop on Amazon because of their brand loyalties to Amazon, not because they are loyal to the third-party provider behind Amazon (who are they?).
A company like Toptal is a prime example of establishing a solid brand. Toptal is an online marketplace for software developers, designers, project managers, and more.
Their value is sifting through tens of thousands of applications and only hiring the top 3% of freelancers worldwide. By doing so, organizations are trusting Toptal to provide them with the best-of-breed freelancers.
As Toptal's brand becomes more robust, they expand into offering other careers. Use the trust gained in their marketplace to expand the service.
An excellent place for you to start is to start thinking about what you're good at and creating a great brand experience around that.
An excellent place to start is to start thinking about what you're good at and creating a great brand experience around that.
Once you start creating a trusted brand, ask other trusted individuals in your network to join your network.
Online Marketplaces are Growing in New Areas Such as Recommerce
Great news! We're reusing. First, it was Craiglist. Now the future of many online marketplaces' growth is recommerce.
Recommerce online marketplaces such as these support sustainability and the environment. Not only are marketplaces making money, but they're doing it in a way that benefits everyone.
There are millions of products being reused. A great example is 1st Dibs, a luxury online marketplace for antiques and secondhand items.
1st Dibs was started in Paris by luxury real estate dealer Michael Brono. By the first year, 1stDibgs was posting 100 new items per week.
They soon moved to New York to expand. With its IPO last year, 1st Dibs is now becoming the eBay of Luxury!
Like most things, 1st Dibgs started small!
Wondering where to start with your online marketplace?
Think through - what niche could sell reused items that you're familiar with or enjoy?
Start there.
Online Marketplaces Continue to Boom
Online marketplaces continue to spring up and grow. Some grow from functioning as big box stores, others from building a brand, and others from quickly growing niches like Recommerce.
Some grow from functioning as big box stores, others from building a brand, and others from quickly growing niches like Recommerce.
We would love to hear from you.
- What kind of online marketplace are you contemplating?
