What is a Marketplace?
This post is part of the collection “Samaipata Basics”: a first introduction to the world of venture capital and startups
Similar to traditional markets, online marketplaces serve as a platform for buyers (demand) and sellers (supply) to come together and facilitate an exchange.
Over the last few years, marketplaces have gained substantial popularity as it allows sellers who may not necessarily have an e-commerce store of their own to sell their goods or services online. On the other hand, it’s a fantastic tool for consumers as they are instantly exposed to numerous vendors allowing them to make more informed purchases.
The most prominent examples of marketplaces are probably Amazon and eBay, who are undoubtedly key players in the marketplace business model but are by no means the only ones. In fact, there are thousands upon thousands of marketplaces up and running at the moment with most of them facilitating a specific, niche market.
Other than Amazon and eBay, examples of other highly successful marketplaces include Etsy, Bonanza, Alibaba, Jet, JustEat, and Airbnb.
Transactions are carried out by the marketplace platform and are subsequently passed on to the suppliers discounting a certain pre-agreed upon transaction fee for using the platform.
Some marketplaces have certain fixed variables, such as Uber, where a pre-set central pricing system applies for the whole platform. Other platforms, like eBay, allow its buyers and sellers to control everything from pricing to purchasing conditions and communication.
Check out the video below by Euromonitor International on the Growth of Marketplaces: