How An Ecommerce Store And Online Retail Marketplace Differ?

Many individuals think that an ecommerce shop and online retail marketplace is the same, but nothing could be further from the truth. Any website where electronic commercial transactions are done can be considered an ecommerce site. All online marketplaces are ecommerce websites, but not every ecommerce site is an e-marketplace. So, ecommerce is an umbrella term that encompasses online retail marketplace websites. Now, let us take a look at the numerous differences between both.

Criteria Marketplace Website Ecommerce Website
Number Of Vendors Multiple One
Availability And Selection of Products Greater Fewer
Customer Reviews Mostly Available Mostly Unavailable
Traffic Higher Less
Target Audience Usually greater Usually smaller

Vendors

What do Amazon, Alibaba, Flipkart, and eBay have in common? Besides being some of the biggest online marketplaces, these all sell third-party vendors’ products. This means these websites have numerous vendor partners selling products to customers.

Conversely, an ecommerce website may or may not sell other parties’ goods. This is the biggest difference between it and a marketplace website. If a website sells the product of the business behind it, then it is more of an ecommerce site. Although they have the facility to sell products, some websites focus on communicating information or advertising. This means even if a product is sold through it, it will be an ecommerce site.

Product Selection And Variety

Obviously, with more sellers being there, an e-marketplace such as Amazon will have more products on offer than what your average web store would have. Besides, there will a greater variety of products to pick from on such a big marketplace website than a single-vendor ecommerce store. For sellers, this means there is great competition, but for the customer, having a better availability and variety of products is a boon.

Customer Reviews

Does every web store have customer reviews and ratings for new buyers to read? Not necessarily. Some ecommerce websites have these details on hand, but others publish mere testimonials. The thing with testimonials is that these appear to be as obvious sales pitches. Conversely, a marketplace website will have reviews and ratings of products given by people who have already bought from vendors available on it.

So, as a new customer, you can make a decision based on what others say about a product on an e-marketplace without leaving it. This is usually not possible when shopping for products on single-vendor web stores.

Registration/Signing Up

You can purchase products through almost every marketplace website without signing up on it. However, to make the most of shopping on an e-marketplace, you will have to sign up on it. Signing up on the website means that points or digital wallet credit balances might add up with each purchase you make, depending on their policy. Most marketplace website owners offer these benefits to people to promote business and build customer loyalty.

On the other hand, not every single-seller online store requires you to be a registered member to avail the services of it. Some of these websites will specifically tell you to sign up to get a warranty for more time than what you have after buying their products.

Website Traffic

Speaking in a strictly technical sense, the term ‘traffic’ refers to the data transferred by those who visit a site. Things like how many people visit a website and the overall number of webpages they go to, play a role in determining web traffic.

Depending on the popularity of each website, an e-marketplace will have more traffic than a single-seller web store. Let us look at the example of Amazon to explain this point. Amazon is so that the target audience of the marketplace is much bigger as compared to your standard online store. Most people go to it to buy products because it is Amazon. On the other hand, potential buyers will visit a web store owned by one seller only when they know about that business.

On a related note, in the case of an online marketplace, it is their duty to drive traffic to the website. For this, they have to do SEO and the like. On the other hand, the owner of a non-marketplace ecommerce store will themselves have to lure traffic to the website. This brings us to the next point of the difference between both types of websites.

Marketing

As an ecommerce business owner, you only need to pay attention to targeting customers. They may be business clients or standard customers, but you have to do everything necessary to lure them to do business with you. This means you have to do search engine optimization and other online and traditional marketing activities to achieve your goal. No third-party will support you in this endeavor, unless you hire a third-party SEO firm and/or marketing firm.

On the other hand, a marketplace website should focus on attracting both potential buyers and vendors who will sell products to them. Those sellers are your business clients, but visitors are both your and their potential customers. This means, as a marketplace website owner, you should support your vendors’ marketing activities.

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