Ecommerce Success Tips – 5 Essential Features of Any eCommerce Marketplace
As digital shopping becomes more and more engraved in our day-to-day lives, visits to online marketplaces are slowly but continuously becoming part of the norm. It’s no wonder that a lot of e-commerce marketplaces are sprouting on a daily.
It gives small-time sellers an avenue to sell without the need for much capital that they would otherwise need in setting up brick-and-mortar stores. It also widens the customer experience and provides a platform for businesses to become visible and reach a wider audience.
Nonetheless, it is important to note that it would take more than a buyer, a seller, and an internet site to launch an e-commerce marketplace successfully. One should know about the essential features of any e-commerce marketplace to be successful. Below are the nitty and gritty to help you further understand how e-commerce marketplaces operate.
What is eCommerce?
E-commerce is the method of selling and buying physical and virtual products and services on the internet. It also involves the online exchange of data and electronic cash or currency between the seller and buyer.
In an e-commerce setting, sellers set up seller accounts or store on e-commerce platforms or online marketplaces that the buyers visit to browse for products they need or want to buy.
It helps businesses or individual service providers reach a bigger audience for their products and services. It also made business transactions more convenient on both the seller and buyer.
E-commerce started during the development of Electronic Data Interchange in the 1960s. Later, in 1979, Michael Aldrich made way for businesses and consumers to transact online. Several decades later, it is now known as electronic commerce or e-commerce.
What Is an eCommerce Marketplace?
There’s always a common misconception between an e-commerce platform, an e-commerce website, and an e-commerce marketplace.
People tend to interchange one over the other. It may be because there are a lot of gray areas in the difference between them. Yet, knowing what to use for your business is a vital factor in successfully establishing your online business.
- To help clear up the misunderstanding, an e-commerce marketplace, also known as an online marketplace, is an e-commerce platform that connects sellers, suppliers, and buyers. It is a multi-vendor platform with a curated customer base.
- Its main sales goal is to acquire more traffic and conversions through promoting its brand, which encourages more vendors to sell on the platform and more buyers to visit. Etsy, eBay, Amazon, and AliExpress are few examples of an e-commerce marketplace.
- On the other hand, an e-commerce platform includes e-commerce website builders as well as accounting management and customer support systems.
- Yet, e-commerce website builders are often referred to as e-commerce platforms. It is an end-to-end software that also connects vendors to buyers and allows customers to look for products they would want to buy.
- An e-commerce website builder allows sellers to create their e-commerce website where they could list and showcase their products for customers to buy. Your website can either be hosted or self-hosted, depending on where you choose to build. Some examples of e-commerce platforms are Shopify, Wix, BigCommerce, WooCommerce, and Volusion.
- The main difference between an e-commerce marketplace and an e-commerce website is that a lot of buyers and seller interact on the same website in an online marketplace and customers doesn’t need to leave the site to complete the purchase.
- Also, aside from the technical aspects that support them, you can integrate an e-commerce website with an e-commerce marketplace and vice versa. It makes product listing, finding suppliers, providing shipping options, and getting management solutions easier on the seller’s part.
- What you need to note here is that you have the option to build a website and sell in an e-commerce platform, sell directly in an e-commerce marketplace, or integrate your e-commerce store or website in an e-commerce marketplace to scale your business and widen your selling options.
Examples of eCommerce Marketplaces
According to eMarketer, the global e-commerce market is expected to grow to 4.89 trillion in 2021. As this is the case, more and more online marketplaces are sprouting, encouraging online retail businesses to enter the e-commerce scene.
Among the many e-commerce marketplaces existing on the internet, here are a few most known to the public:
1. Amazon – Amazon is one of the most reputable and most popular e-commerce marketplaces. It is also the largest retailer in the world, with 18 active marketplaces around the globe and 1.9 million active sellers.
2. AliExpress – Launched in 2010, AliExpress also grew as one of the largest and most renowned retail e-commerce marketplaces. It is a subsidiary of Alibaba Group which is owned by ecommerce business magnate Jack Ma. AliExpress caters to 220 different countries with customers coming from all around the world.
3. eBay – In 1995, eBay started as an online trading place for rare collectibles and second-hand or unused household items. Now, eBay facilitates business-to-consumer (b2c) and consumer-to-consumer (c2c) selling of unused, second-hand, and retail items. With approximately 1.7 billion active listings and 187 million active buyers, eBay now operates in 190 markets worldwide.
4. Etsy – Etsy is another e-commerce marketplace that allows sellers to showcase unique and handmade items. It links 4.36 million sellers to 81.9 million customers on its platform. Among its most popular categories are homewares and home furnishings, jewelry and personal accessories, and craft supplies.
5. Rakuten – Another well-known online electronics retailing marketplace is Rakuten. It is founded in Tokyo, Japan in 1997. Today, it serves over 1.5 billion members and partners with over 70 businesses globally. From Japan, it now expanded its base operations to the US, UK, France and some other countries.
5 Essential Features of Any eCommerce Marketplace That Ensures Business Success
1. Product Management Tools – The main reason why sellers register to online marketplaces is to showcase their products to sell, and the main reason why buyers visit them is to look for products. Therefore, listing and adding products as well as product details, images, and videos should be made easy on the seller’s end.
Most known and reputable online marketplaces feature built-in product listing and product research tools to help sellers easily find suppliers and new products to sell. These product management tools can also be easily integrated into their subscription stores or e-commerce websites.
Product management and road mapping tools should not aid in the product listing. It should also organize them into categories, highlight key product features, and analyze product data relevant to vendor supply and customer demand.
2. Omnichannel and Multichannel Integration – Mobile shopping contributes to a considerable percentage of online shopping sales. According to Statista, mobile e-commerce sales are projected to grow to $3.56 trillion dollars by the end of 2021.
Although it is definitely high, it is not shocking news considering how mobile phones are a big part of our modern day-to-day life.
An e-commerce marketplace should have the ability to incorporate the channels that the users or customers usually use. It should pinpoint where most of its users are in the digital and technological landscape and provide a seamless experience to its users regardless of the channel they are using to connect to the marketplace.
To understand this better, an omnichannel integration means that users can use multiple channels that revolve around the customers like desktop, mobile phones, telephones, or even the physical store and still acquire the same user experience. The customers can shift from one channel to the other during the purchase cycle.
On that note, another must-have key feature of an e-commerce marketplace is its ability to integrate with multiple channels. As opposed to omnichannel, multi-channel integration refers to the customer’s independent purchasing opportunities on different channels.
It involves understanding what channels the customers mostly use and providing them with access points to purchase at the e-commerce marketplace. Here, you’ll be able to promote the marketplace and its products on social media, in emails, on phones, and on other mediums.
Moreover, these marketing features need to involve optimization opportunities like search engine optimization (SEO) to promote highly-performing products and enhance user experience on the marketplace.
3. Customizable Order Processing and Management System – Order processing and order management involves providing shipping options to customers, secured and geographically accessible payment gateways, order tracking, and friendly return and refund policies. Without these, the burden of purchasing would fall heavy on the customers. It defeats the purpose of convenient shopping that online marketplaces mainly offer.
Moreover, order management needs to be customizable so sellers will have more chances for conversion. Free shipping options and discount coupons upon checkout decreases the probability of abandoned carts and bring in more visitors to the marketplace.
Consumer research revealed that 78% of Amazon Prime users signed up because of the 2-day free shipping promo on the e-commerce platform. Moreover, 73% of consumers surveyed confirmed that they are more likely to buy items with free shipping options.
4. Security Features – Security is always a big deal when signing up with any internet site. Especially with e-commerce marketplaces that involve, if not promote, monetary transactions, hesitation on the part of both sellers and buyers is reasonably justified.
Security features in e-commerce marketplaces involve HTTPS protocols, server and admin panel security, SSL certificates, and other e-commerce security plugins.
Moreover, a firewall should be given along with an agreement with partner payment gateways about handling monetary policies and transactions. In a virtual scheme, it’s easier to be a victim of fraudulent activities because you don’t personally see the people you deal with behind the screen.
Therefore, security filters set up on the marketplace and on apps that can be integrated with it are crucial for the transactions or sign-up process for sellers and buyers.
5. E-commerce Monetization Tools – Out of all the e-commerce features and characteristics available in any online marketplace, income-generating tools and strategies on the site are one of the most vital.
Without monetization tools or strategies that would bring revenue to your online marketplace, it won’t stand a chance from all the other competing marketplaces out there.
The simple explanation for this is that online marketplaces need to earn money to continue their operations. Maintaining an internet site is costly. You have to pay for the domain or its creation, maintain security features and updates, and update with the market trend to continuously enhance user and buyer experience on your site.
That’s why some e-commerce marketplaces like Amazon, AliExpress, eBay, and Etsy impose insertion and commission fees. These fees are normally taken out from a seller’s sale of an item so they can continue selling on the site.
Some other ways practiced by recognized online marketplaces to generate revenue on their site are paid promotions or sponsored products and brand and product advertisements on its partner sites. Some also make subscription programs.
After choosing your e-commerce platform and startup, you should now learn about marketing strategies to sell. You can read more about it here on our blog: Online, Digital Marketing Courses to Start Selling via Social Networks
What are e-commerce business models common on e-commerce marketplaces?
Some of the most common business models that e-commerce marketplaces operate under are subscription model, commission, freemium model, featured listings and ads, bundling model, and retailer model.
What are the types of e-commerce?
There are three main types of e-commerce which are business-to-business (b2b), business-to-consumer (b2c), and consumer-to-consumer (c2c). From the word itself, b2b focuses on providing data or services to another company.
B2b pours its efforts on providing products and services for the customer’s consumption, and c2c allows customers to buy products from manufacturers or large businesses to sell to other customers. The buyers can be sellers in this type of e-commerce.
What E-commerce marketplace is best for my business?
It depends. To arrive at the best answer possible, you have to consider who your market or target audience is. For example, Etsy’s platform is very friendly to creatives and art enthusiasts, so crafts and unique products are promoted. On the other hand, eBay’s auction selling option encourages collectors and rare item lovers on the site.
Online marketplaces operate on different business models and require different elements depending on who the site users would be. Yet, at the core of each of them are shared characteristics and key features that keep them running despite heavy competition and expected risks.
Your e-commerce business is directly affected by the online marketplace you chose to set it up or integrate it with. You need to keep in mind the tools, resources, and support that the marketplace can offer your e-commerce store or website that would help you minimize risks and grow in your niche.