Marketplace

What is a marketplace?  A marketplace is a location where people gather to buy or sell goods and/or services.  A market or marketplace have existed as long as humans have engaged in trade and the traditional marketplaces are situated both outdoors and indoors.  This can be your local farmers market, grocery stores, clothes retailers and other stores you can physically go to for buying items.

In today’s world of technology, we now have numerous online marketplaces.  An online marketplace is a type of e-commerce (web) site where products or service information is provided by multiple third parties and transactions are processed by the marketplace operator.

How does an online marketplace work?  In an online marketplace, consumer transactions are processed by the marketplace operator and then delivered and fulfilled by the participating retailer or wholesalers.  As an example, let’s say a shopper or buyer goes online to XYZ marketplace and browses through their website full of products.  The shopper ultimately selects an item which he or she purchases on the XYZ marketplace site.  The XYZ marketplace then places that order through the seller who is selling that specific item (a third-party seller) and then the seller handles the fulfillment for that purchase and delivers it to the buyer.

Why go through an online marketplace?  Online marketplaces streamline processes for both the seller and buyer because marketplaces aggregate products from a wide array of providers and have a wide variety of general interest products that cater to almost all the needs of a consumer.  This makes it easier for sellers to reach a variety of demographics and for a buyer to compare a specific product, all in one location and in the comfort of their own home.

Best Online Marketplaces

Here are the top 5 best rated online marketplaces that have a high percentage of loyal customers, online market share and will increase your product visibility.

1. Amazon: the king of online marketplace and the most recognized name in online merchandise sales.  Amazon’s share of the U.S. online market is roughly 50%, or roughly 6% of total retail sales at the mid-year point of 2018.  The marketing value of the Amazon name is something every seller needs to consider when searching for the best marketplace to sell their products.
   • Cost: there are 12 different selling options to choose from but the most common is selling on the Amazon marketplace.  You can sell as an individual or as a professional on the Amazon marketplace.  As an individual, you plan to sell fewer than 40 items a month and it’ll cost you $0.99 per sale + other selling fees.  To sell as a professional, you plan to sell more than 40 items a month and it’ll cost you $39.99 per month + other selling fees.  Businesses looking to sell on Amazon will need to sign up and register their business name, contact information, credit card and phone number.
   • What you can sell: as an individual and a professional, both can sell over 38 product categories.
2. eBay: is one of the most popular online marketplaces in the world.  57% of eBay’s business is international, with 170 million buyers worldwide and 190 markets around the world.  They offer numerous resources, support and guides showing merchants how to start selling and be an efficient business.
   • Cost: you get the first 50 listings for free per month.  Beyond that, the fee for listing varies depending on the item category but it is $0.35 in most categories.  There is also a 10% final value fee when your item sells regardless if it’s the first 50 listings or beyond that.  Final value fees are calculated as a percentage of the total amount paid by the buyer, including shipping and handling – sales tax is not included.  There are also options for updating your listing to feature your products on classified ads or go through auctioning, from $0.10 to $9.99.
   • What you can sell: there are 5 categories in the main catalog – consumer electronics, heating/cooling/air, small kitchen appliances, major appliances and sporting goods.  There are additional categories in the classified ads catalog – business & industrial, specialty services, travel, real estate and “everything else” (funeral & cemetery, rewards points & incentive programs, etc).  You can choose a variety of product items within each of the categories.
3. Etsy: this online marketplace is more for the artistic sellers and buyers.  It is geared towards crafters, artists, collectors and creators selling handmade items.  In Etsy’s Impact Report, it showed 1.9 million active sellers on the platform and 33.4 million active buyers.  Etsy’s financials also look solid with $3.3 billion in 2017 GMS, a growth of 20.2% from 2016.
   • Cost: it costs $0.20 to publish a listing.  A listing lasts for four months or until the item is sold.  Once an item sells, there is a 5% transaction fee on the sale price (including the shipping price you set).  If you accept payments through Etsy Payments, there is also a 3% + $0.25 payment processing when an item is sold.
   • What you can sell: Etsy is a unique marketplace where buyers shop for items that they might not find anywhere else.  Everything listed on Etsy must be handmade goods, vintage items (20 years or older) or craft supplies.
4. Zazzle: this is a marketplace devoted primarily to writers, graphic artists and anyone in the business of image or logo creation.  Zazzle has roughly 31 million visitors each month worldwide with roughly $24 million in revenues and over 300 million products listed on their site.
   • Cost: you can sell your art or products for free – no fees for joining, no set-up fees and no listing fees.  Zazzle will only charge a commission only when you make a sale on their platform.  The commission rate varies depending on the features you utilize.  Shipping costs or sales tax are not included in the commission calculation.  If you are selling your artwork, you choose any royalty rate from 5% to 99% and Zazzle will increase the product price (to accommodate for their commission) so you can earn the royalty you choose.
   • What you can sell: all products offered through Zazzle must be made-to-order and feature at least one customizable option.  Nearly any category of product is eligible if it meets this requirement.  That is what Zazzle and its customers are all about.  Popular products include apparel, housewares, jewelry & accessories, office products, electronic accessories, art and paper goods.
5. Overstock: works with business and entrepreneurs who join their supply network, which allows an influx of various products into their marketplace and expands its online presence.  Overstock has over 30 million unique visitors each month with products in over 46 million homes.
   • Cost: the listing cost range from $0.10 to $3.15, depending on the item.  There is also a final value fee which is 3% for items sold under $25.  If your item does not sell, you can relist it for free as many times as it takes to sell them.  There is also a subscription plan for frequent and concurrent users, where you pay $6.95 a month for 25 simultaneous listings.  There are also options for updating your listing to feature your products on classified ads or go through auctioning, from $0.10 to $13.17.
   • What you can sell: there are 8 main categories – home, bed & bath, jewelry & watches, electronics & media, health & beauty, apparel, liquidations and sports/hobbies/toys.  If your item falls outside of these categories, they encourage you to call their customer service to see what your options are for selling in their marketplace.

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