What is the Difference Between a Marketplace and an Ecommerce Site?

Learn about the differences between an online marketplace vs ecommerce sites. Find out how you can take advantage of consumer trust and market recognition to access a large audience of potential buyers.

What is the Difference Between a Marketplace and an Ecommerce Site?
The main difference between a marketplace and an ecommerce site is that one allows only one seller, the store owner, while the other allows multiple sellers to offer products through the same storefront. An online marketplace is an e-commerce site or application that makes it easy to shop from many different sources. The market operator does not own any inventory, but instead provides a platform for other people's products to be showcased and transactions to take place.

Market owners are taking less financial risks than ecommerce website owners, as they don't buy or sell anything. This makes their business much more scalable and allows them to grow quickly. An online marketplace is a website where products from multiple sellers are sold in one place, providing customers with a wide variety of products. This is similar to a shopping mall but in an online space.

Creating an online store in the marketplace can save more time and money initially than setting up an ecommerce website. Marketplaces tend to focus entirely on driving buyers toward purchases and sellers toward listing more products or services. On the other hand, if there is a product that is not sold, you can easily deactivate it with the push of a button. To achieve customer reach and brand recognition, many online merchants sell both in marketplaces and on their own website.

Marketplace sellers take advantage of the consumer trust already created by the marketplace and access a large audience of potential buyers immediately. For example, creating a seller profile and a retail store on platforms such as Amazon or Etsy will require very little time and technical skills. Many people who shop in marketplaces assume that they are buying in that market (even though they are buying your products). The happier buyers are when transacting on the site, the more they will help spread market recognition.

To put it another way, a marketplace may be an ecommerce website, but not all ecommerce websites are marketplaces. Marketplace sellers can use consumer trust and market recognition and access a large audience of potential buyers right away, but when a seller creates an ecommerce site, they have to spend money and time to market the website, brand, and product. The size of the commission varies greatly from market to market and can range from 0% (Flubit) to 50% (Germany's second largest ecommerce Otto). In addition, you can easily start selling and reach potential customers who have already purchased on the online marketplace.