Tips and Tricks

All You Need to Know About Marketplaces

The rapid development of technologies has transformed every aspect of the business world. Along with these changes, the rules for conducting business and executing commercial deals have also changed. Today, if you want to buy anything, it is likely that you’ll search for the product online. Traditional forms of marketing have definitely become outdated. They were outshined by the digital marketing platforms also known as marketplaces. 

Such platforms as Etsy where creative people are selling their products, as well as Amazon and eBay where you can find virtually anything, have become more than popular over the recent years. These platforms are some of the examples of successful online marketplace websites. They unite supply and demand by offering effective solutions to save costs due to the lack of an intermediary. 

Today, there are countless marketplaces scattered all over the web. Modern businesses and customers worldwide have transferred their interactions to online space. According to Statista, in 2019, global eCommerce sales are expected to cross the line of two trillion US dollars, and in the forthcoming years, this number is predicted to grow substantially. 

What is a Marketplace and Who Needs It?

Online marketplaces are designed to make interactions between consumers and businesses more convenient. Over the previous years, their number has grown and not without a reason. After all, they make the life of businesses and their clients a lot easier and simplify the business processes considerably. 

An e-marketplace is a website or an application that plays the role of a mediator between the companies that offer their goods or services and their clients who are interested in these products. Marketplace owners do not provide any products themselves, giving participants of their online retail greater opportunities for smooth interaction with clients instead. There are hundreds of thousands of merchants selling their products and services to customers who browse the site. 

The reasons why marketplaces have become such a widespread practice and why they are needed are numerous. The major reason why you would need to build a marketplace website is either to support merchants in their sales or to help customers get access to the products they are interested in more easily.  

In this way, by building a marketplace, you create a platform where users can sell goods at a low price or offer a property for rent in a convenient way. Every prosperous online marketplace usually performs this task in a way that regular retailers cannot, which is why such platforms have a perceptible competitive advantage in the world of eCommerce. 

As such, the reasons to create a marketplace are associated with many substantial merits, especially because you will not need to have any inventory to run a marketplace. This makes them a highly attractive option for those business owners who do not want to invest too much into this venture. 

What Types of Marketplaces Exist

Online Marketplaces Are Turning Into a Widespread Practice For Several Reasons:

  • Consumers are more inclined to rely on digital marketplaces because they ensure better protection from fraudulent traders;
  • Digital marketplaces offer an easy way for sellers to earn money on their products and services;
  • They offer a sense of unity where sellers and buyers alike can provide support to one another in the industries that they are interested in. That’s exactly why digital marketplaces are also called “sharing” or “collaborative” economy. 

There are different types of online marketplaces that are all focused on their own specific niche. For instance, Amazon used to be a marketplace of booksellers, but it now offers a great variety of goods for all tastes and demands of consumers. Essentially, from the customer perspective, doing shopping at a digital marketplace is similar to using services or buying products from several different merchants all at once. 

All in All, Tere Are Four Major Types Of Digital Marketplaces Such As:

  • Vertical marketplaces offering goods of the same type from various merchants.
  • Horizontal marketplaces providing products with similar features and characteristics.
  • Global e-marketplaces with no restrictions on the variety of goods as they are selling all sorts of products offered by different merchants.
  • Hybrid digital marketplaces offering their own goods together with the goods of other companies and giving all users a chance to execute transactions and interact with merchants or consumers through a unified platform. 

It is up to you what kind of marketplace to launch, but, basically, all of them have their own drawbacks and merits. As a rule, entrepreneurs tend to choose between vertical and horizontal marketplaces when they are faced with the need to launch their own platform.

Vertical marketplaces are entirely concentrated on a particular niche and usually have a much narrower customer base than other types of marketplaces. Essentially, it seems easier to build a marketplace app that is intended for a specific target audience and is centered on a specific sphere. 


  • Ease of creating a successful and effective marketing campaign, which allows you to save considerable financial resources.
  • Greater value for consumers because such platforms specialize in unique products that are hard to find anywhere else.
  • Goods and services of better quality. Just because the choice of goods is not so diverse, it is easier to take care of the quality of each product and service offered on the platform.


  • Fewer clients and fewer transactions which translates to less perceptible revenues.
  • Good knowledge of the specific industry is required. 

As for the horizontal marketplaces, they offer goods and services for diverse categories of clients. These platforms offer products that are in high demand and generally enjoy a larger client base. 


  • Lower expenses because all sales follow a standardized model.
  • Wider target audience. These platforms are trying to attract more customers by offering a wider choice of goods.
  • More transactions and greater profitability.


  • Greater competition.
  • Problems with building an effective marketing campaign due to the incredible diversity of the audience.
  • Problems with achieving customer loyalty which is explained by the difficulties with providing a proper level of customer support.
  • Problems with creating a better value for merchants and clients. 

As such, it is up to you to choose the preferable type of a marketplace. Your final choice should be based on your needs and expectations with consideration of the benefits and shortcomings of each particular type. 


As a final word, we should admit that in today’s ever-changing world, the sharing economy has a steady positioning on the market and is expected to grow in the forthcoming years. Today, more and more entrepreneurs choose this segment to start their own business. If you are one of them, let IDAP help you implement a marketplace of your own based on the top methodologies and technologies in the field.