The Difference Between an ECommerce and an Online Marketplace

It’s becoming more and more common to run a business on the Internet rather than in real life. There are all sorts of types of online retail relationships: business-to-business, business-to-consumer, business-to-administration, and many more. They’re all united under the term “e-Commerce”.

ECommerce is quite often mistaken for another type of online business relationship, a marketplace. So how do you tell which is which?

There are several key differences to note between an e-commerce store and an online marketplace.

What Is ECommerce?

First of all, let’s clarify what electronic commerce is. Namely, it is a platform that facilitates selling and buying physical goods and services online. It involves only one label distributing their product. Examples of that could be brands like IKEA, Leroy Merlin, etc.

We could break down different kinds of transactional relationships between customers and businesses in the e-commerce market into a number of types:

1. The retail – direct transaction with no mediator.
2. Wholesale – bulk purchasing.
3. Dropshipping – the product sold is made and shipped by an arbitrator.
4. Crowdfunding – the upbringing of the product or service is funded by the consumers via prepayment.
5. Subscription – an automated repeated purchase of a facility or an artifact.
6. Physical or digital products – selling physical goods directly or via a middleman.
7. Services – the distribution of services online.

What Is a Marketplace?

Now, to make a comparison, a marketplace is a sort of an e-commerce store, but instead of a single trademark promoting their utilities, it encompasses a variety of sellers with their own produce. It is essentially a stage for commercial operations by many different retailers that don’t have their own separate platforms. A marketplace allows them to register and put their product up for a small fee. Some examples include AliExpress and Gumtree.

The idea is that all marketplaces are e-commerce stores, being online-mediated commitments, but not vice versa. An eCommerce will only be a marketplace if it is a type of platform with numerous vendors providing the online store with stock.

How to tell a marketplace from an e-commerce store:

1. In marketplaces, the selection is wider than in specific online stores. It is a multichannel eCommerce, meaning that products are collected from multiple vendors and hence are way more numerous and diverse than in a single-brand store.
2. E-commerce requires stronger funding. Since all items on sale come from a single provider, a major investment has to be made to expand the range of products when an eCommerce store is launched to attract more buyers. In contrast, the range of products in marketplaces is supplied by all the individual sellers using the platform.
3. Marketplaces make use of dropshipping more often. Some dealers, of course, will offer unique goods, but most will resell items pre-purchased from third-party manufacturers, and later access postal services to ship the item. Opposingly, e-commerce stores will have to hire an independent force to conduct shipping activities for them. The latter comes out far more expensive and requires higher-level logistics.
4. Marketplaces don’t deal with leftovers. E-commerce has to produce or invest in large amounts of merchandise and stock, often remaining with unsold bits and suffering financial losses. On the other hand, marketplaces assent this role to private individuals who fill in the shelves.

Do you feel tempted to open your own marketplace business? It can be done easier than it might have seemed with OpenCart Marketplace Extension.

What is OpenCart?

We are an online management organization, offering a neat and convenient solution for your personal marketplace. Our templates and functions are designed to make your journey to a brilliant online business smooth and understandable.

In OpenCart we believe in allowing a business start-up for all. To achieve that we have created perfect conditions for merchants to build their online store in just a few clicks. Some of the services we provide include the following:

• Admin portal for administrators to easily maintain a marketplace with several vendors from a single backend.
• Seller portal for retailers to facilitate effortless management of their site, equipped with a powerful dashboard and all of the essential functions.
• Customizable homepage with the option of inserting your own logos, banners, and designs.
• Multilingual interface.
• Pre-installed payment options and income records to secure and follow your transactions.
• Opportunity to switch from a single-seller shop to a website with multiple vendors with OpenCart Marketplace Extension.
• Accessible sellers with the function of profile view, editable reviews, and open communication system fitted with connection via email.
• Numerous shipping options with the option of adding your own.

Join our network of successful retailers today and start making money with a store of your own.