Date of Publication: 23 Jun, 2021

Exploring Online Marketplace

Today, the online marketplaces account for more than 50% of global online retail sales, especially in the global pandemic scenario. And online marketplaces are only rising in popularity.

The growth of businesses like Amazon, Flipkart, ebay, Alibaba, etc. has proven the success of the marketplace model. The technology needed to facilitate the complexities that are innate to marketplaces has finally matured.

There’s never been a better time to take your business to online marketplaces or become an online marketplace entrepreneur.

Anirban Guha

Anirban Guha

Digital Marketing Expert | Media Strategist | Entrepreneur

Table of Contents


The online marketplace or the online e-commerce marketing is a place or a website where one can find different brands of products coming from multiple vendors, shops or person showcased on the same platform. The marketplace owner is responsible for attracting customers and the processed transactions, while the third party vendors deal with the manufacturing and shipping. Online Marketplace streamlines the production process through one simple portal, where the manufacturers sell their products directly to the consumers, therefore avoiding the stagnant process of stocks holding. This kind of supply chain management is usually referred to as the “Dropshipping” method.

Online Marketplace Management Services - Tejom Digital

Companies like Amazon, eBay, and Flipkart have experienced massive success in the eCommerce marketplace business model. This OmniChannel model has so far proven to be the most profitable business in web eCommerce. The entire marketplace runs on one software infrastructure, allowing all the vendors to sell their goods under the umbrella of one website. In terms of revenue, these companies take a percentage of the sales on any product sold across the platforms.

There are five types of online marketplaces you need to be aware of:

Horizontal marketplace: Different products with similar characteristics are sold in this type of marketplace

Vertical marketplace: This kind of marketplace offers the same type of products from different vendors

Hyperlocal marketplace: A local business marketplace

Hybrid marketplace: In a hybrid marketplace, the marketplace owner sells their products along with those from other vendors

Global marketplace: As the name suggests, a global marketplace sell all kinds of products from different suppliers

B2B Marketplaces: They sell in bulk quantities of raw materials and products, machineries and equipment  to businesses and retailers rather than the end consumer. 

Now that you’re aware of what an online marketplace is, let’s look at the advantages it offers to local businesses.

Increase in Sales

Online marketplaces help local businesses reach a far bigger audience than a regular brick and mortar store would. Your business can be introduced to potential buyers without their geographical location being a barrier. An online marketplace is best suited for businesses that are not able to move their inventory due to their location. When you sign up for an online marketplace or create your own, buyers from around the country and the world get access to your products and the option to buy them. With an online marketplace, your products get the promotion and reach that they can’t get offline.

Better Profit Margins

With more reach, thanks to an online marketplace, more customers will end up buying your products and that, in turn, will help you achieve greater profit margins. According to a recent survey, over 55% of businesses that sell online achieve a profit margin of more than 20%. It’s not just the increased reach and sales that help businesses become more profitable when they sell online. The low cost of setting up an online marketplace also plays a part in helping you achieve better profit margins.

Automation, Everywhere

How efficiently you run a business has a major role to play in your eventual profits. A badly managed business, whether online or offline, will not be profitable in the long run. In an online marketplace, you have complete control of how you want to present your products, their prices, the orders you accept, the delivery logistics, data analytics, and much more. With the advanced automation opportunities that come with an online marketplace, you can focus on the actual product more than running the day-to-day of your business.

Marginal Setup Cost

In terms of showcasing your products, you don’t need to spend a lot of time and money on making your store beautiful and inviting. All you need to do for your online store is click flattering pictures of your products and upload them on the website. The low setup cost associated with an online marketplace makes it the preferred choice for entrepreneurs who don’t have a lot of starting capital but a good product they believe in.

Lower Risk

It goes without saying that anything you invest less amount of money in is a less risky proposition than the one where you invest more money. That applies to an online marketplace business and an offline store as well. Since the former has a low setup cost, the risk associated with it is also lower. In terms of the business model, an online marketplace is far more scalable than a brick and mortar store, given you maintain a proper inventory.

Better Inventory Management

The way this works is simple. Every time you receive an order, you can either accept it or reject it based on different factors like its availability and expected time of delivery. If you accept the order, you’ll then reach out to your vendors or you manufacturing unit and get them picked by your associated marketplace. Player like Amazon & Flipkarts of the world helps taking the burden of inventory & logistics off you.

Enhanced Marketing

There are tons of opportunities to promote your business online. From clickable banners and ads on relevant websites to social media, there are numerous ways you can make potential customers aware of your products. There are other ways to market your product featuring in the marketplace like social media marketing, display marketing, email marketing, push notifications, and more. All you need to do is come up with a clever hook that tells customers about your product and get them to visit the specific page in the marketplace website or app.


Armed with this data, you can figure out which mode of marketing is working better for you, which product is attracting more customers but not enough for them to buy it, and other customer behaviour trends. Once you accurately sort through this data, you’ll have a clear action plan on how to make your business better. This kind of insight is available only when you have featured in the marketplaces.

Though there are a number of significant benefits to selling on marketplaces however there are potential drawbacks that may need to be considered.


The online stores may impose restrictive terms and conditions in terms of how you can communicate to customers.

Branding Limitations

There may be marketplace limitations as to how your business can brand its online presence.


Marketplaces can charge commission on every sale and fees can vary from site to site. Before selling your products on a marketplace, make sure you understand the marketplace’s pricing structure. See fees for selling on Amazon, and fees for selling on eBay.

Buyer Retention

While the most important challenge has always been to attract customers to buy your products. But availability of alternatives, within the platform, in terms of price and quality, remains the play spoiler.

Buyers Trust

It is very difficult to develop trust with the customers in an online marketplace. The customers seem to trust the marketplace over you. Hence paid listings, platform recommended products (viz, Prime in Amazon) may take away customers. Also, inadequate ratings and reviews can have negative effect on you.

Price Competition

In large marketplaces, price competition can pose a huge problem. Vendors can choose to compete for the lowest price, which may serve the customer but could end up earning lower profits for both the marketplace and the vendor.

Leverage Dynamic Price Management Standards

E-commerce marketplace management is tricky because multiple sellers are selling the same product. To ensure that every seller gets a fair opportunity, marketplaces maintains a system that not just prioritizes attractive prices but relies on a combination of customer feedback, delivery speed, post-sale service, and genuineness of seller.

While other attributes like feedback, location, and delivery speed matter, pricing is the ultimate decision influencer. Attractive pricing is the key to e-commerce success.

Here’s how managing price can help marketplaces grow:

  • Using an automated tool to price products differently on different days can help marketplaces receive more orders.
  • Sellers can fix their lowest and highest price and the marketplaces can set price either to benchmark against its competitor or to drive more sales
  • Dynamic pricing allows marketplaces to offer extensive discount and retain the customers

Invest in Product Discovery

When a study revealed that “72% of customers prefer Amazon over Google for product discovery”, other marketplaces were shocked and started benchmarking against Amazon. In the recent past, Amazon has aced the customer experience game and that is why it is so successful.

Amazon leverages all the available data to identify patterns and then cater to customers with relevant products. Product Discovery can be defined as an event where a customer discovers a product he or she wants to buy. The time spent in discovering the right product is called Product Discovery Time. Optimizing searches and improving product discovery makes sense because customers are inundated with options and the lesser time customers need to make the decision, the better the conversions.

Here’s how investing in product discovery is going to benefit in marketplaces:

  • Product discovery increases the sale of products that are good but not quite popular
  • Simplifies the road to customer journey mapping
  • Increases conversion by making your products visible to relevant customers faster

Ensure High-Quality Catalogue for Higher Conversion and Lower Returns

 23% of all returns occur because of mistakes made by sellers themselves, whereas 24% of all returns occur because the product looked different from the online store. Low-quality catalogues not only confuse customers but also fails to highlight the USPs of the product.

Changes to be made for a high performing Catalogue are as below:

Get Rid of Duplicate Content – Want to make it easier for customers to find the right product and order it instantly? Start by getting rid of the duplicate content.

The Effects of Duplicate Content:

  • Impacts the search engine rankings negatively
  • Affects the on-site search algorithm leading to irrelevant products ranking
  • Affects the overall customer experience by showing fake or imitated products

High-Quality Images – The saying “An image is worth a thousand words” stands apt for e-commerce stores and marketplaces. Your customer would like to get a good look at the product they have the intention to purchase before clicking the “Buy Now” button.

Detailed Product Description – Detailed product descriptions can close the deal for most products in your marketplace. The inclusion of the right attributes into your description can eliminate all blocking questions in the shopper’s mind before purchase.

 The ingredients of a good Product Description:

  • All the USPs of the product
  • Relevant information about a product in an engaging manner
  • All answers to the varied questions visitor might have
  • Relevant attribute values
  • Necessary keywords in the content

Incentivise Sales

The sole purpose of e-commerce marketplace management is to ensure that the products are listed up, running, and generating sales. To increase conversions, it is very important to lure your customers. Combos, discounts, and lowest price are some of the common schemes that improves conversion.

Seller Management Portal

To manage and run in an e-commerce marketplace successfully, one needs to well manage a seller management portal that handles the issues faced by customers. Try communicating with the customers and the portal customer service to maintain the overall health of the transactions.

The most common grievances on Marketplaces include:

  • Duplicate listings created by other sellers
  • Fake or damaged products being returned by customers
  • Chargeback frauds where sellers end up shipping the product without any payment

Normalization and Standardization

With customer experience replacing price and brand as the key differentiator, marketplaces need to offer a similar experience at all touchpoints.

Normalization and Standardization can help retailers offer customers a similar experience at all touchpoints. By reviewing all products to ensure a particular standard is followed through every catalogue is necessary and can prove a game-changer for these marketplaces.

The best practices in standardization also help in creating a brand image via an impressive user experience and boosts the recall among your audience.

Define Categories and Navigation Cleverly

Category definition and establishing navigation make up for an essential e-commerce marketplace management tip because incorrect categorization of products impacts customer experience negatively. When products are added in the wrong categories, they do not appear in search results for relevant keywords. Every such instance is costing conversions and revenue for every marketplace.

Optimize On-site Search for Optimal Customer Experience

On-site search is often ignored when discussing e-commerce marketplace management but then everything on the Internet starts with a search. By optimizing on-site search on marketplaces you can ensure a quality customer experience and help customers find relevant products faster.

Customer demands are changing almost every day. And in a fiercely competitive landscape such as online marketplaces, if you fail to deliver what the shoppers are looking for, you stand to lose significant business. Plus, different marketplaces have varied standards for listing products and maintaining inventory, as well as marketing and pricing strategies based on the way they target customers.

If you slip up and fail to comply with marketplace requirements, keep pace with latest trends and respond to shoppers’ demands, you would lose your customers to your competitors.

The most crucial aspect is to engage buyers within the marketplace. And to be able to do that, brands/sellers need to have efficient processes to manage end-to-end marketplace activities. This demands latest tech solutions, skilled and trained resources and thorough understanding of the industry and the way systems work. While you can have a team set up in-house, you would need to continuously ensuring system upgrade as well as upskill and scale your team to meet the evolving practices of various marketplaces.

On the other hand, outsourcing marketplace management services to an experienced service provider helps you achieve your business objectives in more cost-effective manner without the hassle of managing a team in-house. With a professional support you can:

  • Streamline the product listing process: A crucial first step to ensuring your products appear in the search results when shoppers look for the same or similar products. From categorizing, creating relevant yet unique title, meta tags, image alt tags to optimizing the page – a service provider helps you define and refine your data and maximize visibility.
  • Ensure competitive pricing: In a marketplace, price competition is cut throat, despite visibility if you fail to price your products optimally, you can either lose sales or not make enough profit. Professional experts conduct competitive pricing analysis that allows you to arrive at a strategic price points relative to the competition that helps woo customers as well as ensure a good profit margin.
  • Increase brand visibility: Similar to search engine, to be able to rank high on product search within the marketplace, keyword optimization is indispensable. That said, force fitting keywords will only make it more difficult for your page to be visible. Trained resources not only help shortlist the right keywords but also richly integrate within the product page content. They also help develop impactful product descriptions that are primed to convert.


Whether you are already looking to strengthen your presence within a marketplace or wish to enlist your products for the first time, we can help you achieve your business objectives. We have a dedicated team trained to manage online brands across channels and is passionate about optimizing brand presence, driving traffic and conversion. Talk to us and we can guide you through our host of services.

Many marketplace sellers focus on improving details consumers view on a product page, such as titles, images and descriptions to convert shoppers. 5 ways for marketplace sellers can increase conversion rates with minimal cost.

1. Keep an eye on customer reviews – 56% of online consumers say they always look at ratings and reviews and usually base purchases on them, according to a survey by Bizrate Insights. 41% say they sometimes look at reviews and only 3% say they never look at reviews. Therefore, sellers should pay close attention to what customers are saying in reviews because potential customers sure do.

Sellers should respond to negative comments promptly and learn what customers like and dislike about the product to help inform what’s written in the product description. If on a product page for a pen, for instance, multiple customers are saying the grip of the pen is comfortable, then the retailer should make sure the description mentions “comfortable grip” prominently.

2. Replicate “touch and feel” in product images – Effective content re-creates what consumers can see and touch in a store.

Case study: Kellogg Co. took that into account when it launched a powdered smoothie product called Joybol in late 2018. “It’s hard for people to imagine what a powdered smoothie bowl is, so on the product page on Amazon, Kellogg included various photos of the open package throughout the process of making the smoothie bowl,” says Will Margaritis, senior vice president of ecommerce and digital marketing at Sellwin Consulting. Content included photos of how it looks when you add water, when you stir and the finished smoothie bowl.

3. Choose photos that will help potential buyers – Potential customers often wants to see examples, so the photos of your existing customers using the product help in sales conversion. Try running a campaign to procure photos of customers using your product and post them on the marketplaces.

4. Update pages with seasonal content – Every brand has a seasonal cadence, but very few brands actually put seasonal images in content. Marketplaces sellers should switch out content, including titles and images, several times a year to reflect the season.

5. Provide information through photos – Product images can be more than just pictures of a product on a white background. Photos can be informative too. Use infographics about the product, usage and USPs wisely.

Learn: How to sell with higher profitability in Online Marketplaces.

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