Importance of Marketplaces in the E-Commerce Business


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Having your own website is no longer enough for product manufacturers. E-marketplaces are a growing trend that cannot be ignored. Along with having their own websites, most brands also make use of these platforms. This helps ensure that they do not miss out on any potential sales and maximize their profits. Being part of an e-marketplace like Amazon or eBay can benefit a brand in many different ways. That’s not all; they also help strengthen the relationship between sellers and buyers.

Marketplace and Their Countless Benefits

Marketplaces benefit everyone in different ways. For product sellers, it is a way to reduce the costs of acquiring new customers, find new customers and make their operations easier. For customers, marketplaces represent a trustworthy, neutral platform where they can find everything they need along with reviews and good deals. Benefits for the customer are also ultimately benefits for a seller. After all, the happier a customer is with the buying experience; the more likely they are to make a repeat purchase. Let’s take a closer look at these benefits

Access to more customers

A marketplace is typically frequented by more visitors than stand-alone websites. Many people browse through these websites even if they aren’t looking for something specific. Though not all of these visitors are looking for products you specialize in, there is still a chance that they will come across your product. This could lead to impulse purchases and make your brand visible to new customers.

Easy management of promotional deals

Marketplaces make it convenient to offer coupons and bargains to customers. It also shortens the response time. This is beneficial for the seller and the buyer. Quicker responses allow sellers to make changes if needed for their campaigns.

Loyalty programs

Amazon Prime is one of the most popular loyalty programs with reference to e-marketplaces. It’s interesting to note that Prime subscribers spend nearly double what non-Prime subscribers spend online.

Access to marketing data that take your sales to a new high

Along with increased exposure to new customers, marketplaces also give brands data about their sales. Brands can use information such as click data, reviews etc. to improve their product. Understanding how a potential customer searches for products also helps brands market themselves in better ways. For example, when looking at things to keep in mind when product uploading to amazon, ebay, walmart etc, knowing what search terms customers enter can help name products.

Marketplaces and increased profits

The ultimate goal of every brand is to increase their profit margins. E-marketplaces play a significant role here in many different ways.

Reduced cost of finding new customers

A marketplace has many more customers than an individual e-commerce website. Effectively, this means that by spending the same amount of money on promotions, you can be made visible to many more people. This brings down the cost associated with acquiring a new customer.

Lesser extra costs

At first glance, the commission charged by marketplaces may make them look expensive. However, a closer look will paint a different picture. If you were to sell merchandise on your own website, you would have to pay a domain fee, the fee for the hosting provider, SEO fees, adverts to drive traffic to your website, transaction fees etc. When all these fees add up, they can be a lot more than the commission being charged by marketplaces.

Reduced Marketing Costs

Running a promotion on a marketplace is much cheaper than running one individually. As a brand, you can participate in promotional campaigns being managed by the marketplace. Thus, you do not need to dedicate as many resources to running this. Also, it helps to know that these platforms have the ability to reach more potential customers than any one individual brand.

Higher Conversion Rate

Amazon gets more than 900 million views each month. If 0.1% of these visitors saw your brand, it would amount to approximately 9 lakh views per month. Do you think your brand’s website could get the same number of visitors? When more people see your brand’s products on a marketplace rather than on your website, it can be safely assumed that the conversion rate on a marketplace is higher than that of a stand-alone website.

Easier Operations

E-commerce sites like Amazon offer a number of additional services to manufacturers that make their operations easier. Fulfilment by Amazon (FBA) is one such service. Sellers who choose to use this service can have their product stock held by Amazon. The website will then also look after shipping the products to customers and any other type of customer service required. This may involve a certain fee but makes the manufacturer’s operations a lot easier.

Marketplaces and Relationships between Buyers and Sellers

More Trust

Customers trust the products sold on marketplaces like Amazon to meet certain quality standards just because they are listed here. In many cases, a customer may buy a product from a marketplace instead of the brand’s website because of their trust in the marketplace. Thus, by listing your products here, you can instantly boost your credibility ratings.


Marketplaces give customers a chance to compare products from different brands before making a purchase. Price is not the only factor here. Reviews play a major role too. These reviews are written by customers who have bought and used a product often have more weight than what a brand says about the product. A good product instantly rises above others through these reviews even though it may be a little more expensive as compared to its competitors.

More Return Customers

Customers make repeat purchases because of two reasons – their experience with the product and their experience buying the product. The basics of a customer’s e-commerce experience remain the same on brand websites and marketplaces – the customer selects the product, pays for it and it is then shipped to their homes. However, since marketplaces offer a wide variety of merchandise, purchases are often clubbed together. This makes their shopping more convenient and could even help them avail of additional discounts. For sellers, this improved shopping experience increases the chances of a repeat purchase.


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