Top 5 Online Marketplaces: All You Need to Know About Leaders
The article was initially published on Codica Blog.
Statista predicts steady growth in the number of online buyers. In 2019, it is expected to surpass 1.92 billion customers. As we can see, both consumers and merchants have moved online.
E-commerce platforms offer exciting opportunities and set new sales standards. They allow people to sell and buy almost everything without leaving their home.
This article is dedicated to top online marketplaces. We have chosen such criteria for the analyses as a revenue model, markets, and core features.
What is an online marketplace?
Let’s start with the definition of an online marketplace.
It is an e-commerce website connecting vendors with buyers offering goods and services in the B2B, B2C, and C2C sectors.
Such platforms are highly scalable and fitted with lots of useful tools including advanced search filters, communication options, multiple payment gateways, and shipping methods.
Key benefits for online marketplace usersto sellers and buyers
- The ability to reach a broad audience
- Lower investments
- Extensive functionality
- Great choice
- Convenience in use
- Smart comparison.
Below you can see the top 5 best and most recognizable platforms that have attracted millions of users and gained success in international markets.
We will discuss their history, monetization strategies, and success factors. This overview will help you choose the best model for your business idea.
1. Amazon
We know Amazon as the biggest online marketplace in the world. Jeff Bezos founded it in Seattle, Washington in 1994. Initially, the platform sold books, but now it has an endless variety of items, from electronic devices to food, jewellery, clothes, and almost anything that comes to your mind.
Today, Amazon has separate sites for 16 countries including USA, Canada, China, Japan, the UK, Germany, Australia, etc.
Thanks to spotless reputation, strong brand and years of experience, this giant is constantly increasing the users’ database. Today, Amazon can boast of more than 3 thousand of new sellers per day.
Metrics:
- 310+ million users
- 2.5+ billion website views per months
- 20+ categories of goods
- 350+ million items on sale.
Monetization strategy:
Amazon is an established brand with its line of services and products. However, you can become a third-party seller. If you have a professional account, it will cost 12.99$ per month. For an individual seller, the price will be much lower — 0.99$ per item sold.
Goods supplied:
Buyers mainly purchase books, electronics, toys and games, clothes and shoes, etc.
Business model:
Amazon is a horizontal marketplace, offering goods and services in B2C and B2B sectors.
What makes users choose Amazon:
- The biggest number of available items
- Intuitive interface and navigation
- Additional offerings
- Flexible shipping settings and printing labels
- Convenient system of ratings and reviews.
2. eBay
eBay was introduced by Pierre Omidyar in 1995 as an integration of B2C and B2B platforms. Today, this is a powerful marketplace with lots of products and services.
Its headquarter is in San Jose, California. The e-commerce platform has more than 24 websites all over the world, including the USA, Canada, Australia, the United Kingdom and Northern Ireland, China, Japan, Thailand, etc.
Metrics:
- 175+ million users
- 1.2+ billion website views per month
- 20+ categories of items
- 350+ million sale products.
Monetization strategy:
Basically, eBay is an auction promoting sales between third-party and suppliers. Each item will cost buyers 3–10% depending on the category, without any extra fees. Besides, a subscription gives users access to additional features.
Goods supplied:
Among popular items on eBay, we can find books, home decor and garden accessories, tech, fashion and shoes, jewellery and watches.
Business model:
Auction sales lie at the core of the eBay business model. It is a B2C and C2C marketplace for buying and selling different kinds of goods.
Source: eBay
What makes eBay so special:
- Advanced search filters
- Variety of payment options.
3. Etsy
Etsy was founded in New York City in 2005 by Robert Kalin, Chris Maguire, and Haim Schoppik. This e-commerce platform focuses on handmade and vintage goods.
Today Etsy operates in more than 80 countries. It is the most popular website in its niche and can boast of the annual revenue surpassing $600 million in 2018.
Metrics:
- 35+ million active buyers
- 52+ million website views per month
- 20+ product categories
- 50+ million sale items.
Monetization strategy:
Etsy does not charge monthly fees for selling goods, but merchants have to pay a listing fee of 0.20$ and 5% of the item sold.
Business model:
Etsy is a horizontal C2C marketplace meaning that it sells only personal brand handcrafted goods in various categories.
Goods supplied:
You can find various handmade products on Etsy, including clothing, toys, jewelry, home decor, and vintage things.
Why users like Etsy:
- Advanced analytics for vendors
- The ability to conduct business from home
- Uniqueness of the goods presented on the platform
- Focus on vintage items that are more than 20 years old
- A strong logistics system based on weight and dimensions of an item
- The ability to print the shipping information from the website and send it to a buyer
- Enhanced search engines allowing buyers to find the needed product faster
- A supportive community and user-oriented approach
- A mobile application for sellers for managing their Etsy shop right from the phone.
4. Bonanza
Mark Dorsey and William Harding started Bonanza in Seattle, Washington, in 2008. Their initial idea was to build a competitor to eBay. The platform is focused on collectors and offers them rare books, stamps, records, and other unique things. Though, you will find everything you can think of there: from board games and dolls to watches and vintage electronics.
This top-notch marketplace operates all over the world, including such countries as the UK, France, Spain, Canada, Ireland, Germany and India.
Metrics:
- 2.5+ million users
- 7.2+ million website views per month
- 20+ product categories
- 20+ million sale items.
Monetization strategy:
Bonanza is a seller-centric platform. It charges vendors neither listing nor monthly fees. Sellers only have to pay 3.5% of each item sold.
Goods supplied:
Its numerous product categories include books, digital goods, clothing, accessories, jewellery, handbags, etc.
Business model:
Bonanza is a vertical marketplace operating in B2C and C2C sectors selling.
What makes Bonanza so popular:
- Integration with Facebook and Google
- Strong communication channels between vendors and buyers
- Synchronization with Amazon and eBay which allows importing the whole product list from those platforms to a Bonanza account.
- A clear and easy-to-navigate interface, convenient for both buyers and sellers.
5. Rakuten
If you prefer buying gadgets online, Rakuten is here to help. When it comes to electronics, this is the second most popular website after Amazon. Rakuten was initially based in Japan, but now it operates all over the world. Among countries where vendors sell their products are Canada, the USA, the UK, Spain, Mexico and India.
Hiroshi Mikitani started Rakuten in Tokyo, in 1997. The platform is known as the fourth largest marketplace in the world and continues expanding its boundaries.
Metrics:
- 90+ million active users
- 16+ million monthly website views
- 10+ product categories
- 200+ million items for sale.
Monetization strategy: The platform charges monthly fees of 33$, 8–15% product commission and 0.99$ per each item sold.
Business model:
Rakuten is a horizontal platform that provides clients in B2B and B2C sectors with products in numerous categories.
Goods supplied:
The website delivers over 200 million of Japanese products to consumers all over the world, such as electronics, home and garden items, clothing and shoes, sports and outdoors, etc.
Why makes Rakuten so popular:
- Easy store management within the marketplace
- Up to 20 shipping options making the platform flexible and buyer-oriented
- Perfect seller tools and support
- The ability to create your shop, add products, and have a blog.
Final words
Technological innovations made online marketplaces especially popular these days. They are noted for their convenience, the great variety of products and services, advanced search filters and multiple payment options. Today, both buyers and sellers have moved online and as a result, e-commerce websites have become a widely-used business model.
If you came up with an idea of your online marketplace and need professional advice from an expert team, don’t hesitate to contact us. Codica team has great experience in building marketplaces and will be happy to help you create a successful and thriving marketplace.
The article was initially published on Codica Blog.
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