An online marketplace (or online e-commerce marketplace) is a type of e-commerce site where product or service information is provided by multiple third parties, whereas transactions are processed by the marketplace operator. Online marketplaces are the primary type of multichannel ecommerce and can be a way to streamline the production process.
In an online marketplace, consumer transactions are processed by the marketplace operator and then delivered and fulfilled by the participating retailers or wholesalers (often called drop shipping). Other capabilities might include auctioning (forward or reverse), catalogs, ordering, wanted advertisement, trading exchange functionality and capabilities like RFQ, RFI or RFP. These type of sites allow users to register and sell single items to a large number of items for a "post-selling" fee.
In general, because marketplaces aggregate products from a wide array of providers, selection is usually more wide, and availability is higher than in vendor-specific online retail stores. Also prices may be more competitive.
Since 2014, online marketplaces are abundant since organized marketplaces are sought after. Some have a wide variety of general interest products that cater to almost all the needs of the consumers, however, some are consumer specific and cater to a particular segment only. Not only is the platform for selling online, but the user interface and user experience matters. People tend to log on to online marketplaces that are organized and products are much more accessible to them.
Many sharing economy platforms are in fact peer to peer marketplaces. Also called "switch" marketplaces, sharing economy platforms' users will characteristically switch between buying and selling services or goods, such as on AirBNB.
Seeing that the sharing economy in large part originates from the open source movement it is only fitting that there are now two open source initiatives to provide a free and collaboratively built solution to build marketplaces (Cocorico & Sharetribe).
The intermediaries in online environment marketing that offer customers a destination site about connecting online customer with product information, for example, some search engines, like Google, Facebook and MSN. This method is easier for customer to gather information, and have a preview bout the product. Such as the price and the product detail information. Online intermediaries enable customer and online seller maximizes the efficiency and effectiveness. The information would be exchanged though Internet, B2B and B2C are both benefit from online intermediaries. In addition, online intermediaries sometimes provide support for online social networks, which create a social community for supplier and customer in order to directly connecting each other, such as the dramatically increase trend about e-commerce development, online site allow supplier and customer to do business at digital environment.
It is different with the traditional method, online shopping intermediaries offer third-party sellers the opportunities to freedom to choose sale prices, and they only charge a percentage of referral fees from the final price. Though the online environment sellers become more efficient, comparing with conventional sells channel, in-store sales, online shopping and intermediaries enable company save from without involve physical store. And also it bring convenience for customer, in other words, online shopping intermediary's level of search help decrease the level of differentiation in the product category. Customer may have a clear classification to search what are they seeking.
Many service related online marketplaces have been criticized for taking jobs that would go to local industries that can't compete on price against outsourced providers.
Another criticism is that the laws and regulations surrounding online marketplaces are quite underdeveloped. As of consequence, there is a discrepancy between the responsibility, accountability and liability of the marketplace and third parties. Online marketplaces and platforms have faced much criticism in recent years for their lack of consumer protections.
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