According to Statista, the number of online buyers is growing year by year. In 2019, it is expected to reach the point of 1.92 billion customers. It means that consumers and merchants have both moved their interactions online.
E-commerce platforms offer new opportunities and sales standards. Thanks to online marketplaces, anyone can sell and buy almost everything without leaving their home.
In this article, we have gathered 5 top online marketplaces, and analyzed them based on such factors as a monetization strategy, markets, and features.
What is an online marketplace?
Before we go into details, let’s find out what an online marketplace is. It is an e-commerce platform that connects vendors with buyers offering goods and services in the B2B, B2C, and C2C sectors.
These websites are highly scalable and provide a rich variety of products and services, comprehensive search engines and filters, helpful communication tools, multiple payment options, and shipping methods. With online marketplaces, you can browse different items on one platform, thus saving your time and efforts.
Benefits to sellers:
Reach to a larger audience: Online platforms enable you to attract more people from your country and worldwide, thereby increasing sales and profit.
Relatively low investment: You can create your e-commerce store, maintain and optimize it with minimal expenses.
Additional features: Online marketplaces are an alternative way to promote your products or services.
Benefits to buyers:
Great choice: You can find and buy the desired item in minutes, regardless of your geographical location.
Convenience in use: E-commerce platforms have user-friendly interfaces, provide a wide range of supplying goods, ratings, and comments. They help to make decisions faster, buy products and communicate with sellers in a more comfortable way.
Smart comparison: Online marketplaces offer all-around research and comparison before purchasing.
We have chosen 5 best marketplaces that have made their brand recognizable, attracted millions of users, gained success at international markets, and increased sales. You can see the overview of each marketplace, learn more about their business model and success factors, and define which model fits your business idea perfectly.
So, what makes them so special?
Amazon is the world’s largest online marketplace. It was founded in Seattle, Washington, in 1994 by Jeff Bezos. The platform primarily aimed to sell books, but now it has an endless variety of items, from electronic devices to food, jewellery, clothes, and almost anything you can imagine.
Today, Amazon has separate sites for 16 countries. Among them, you can see the USA, Canada, China, Japan, the UK, Germany, Australia, etc.
Why is Amazon so popular? Their explanation is simple: a strong brand and excellent reputation.
A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.
- Jeff Bezos, Amazon CEO
Thanks to its reputation and years of experience, Amazon is constantly increasing the users database. Today, the number of new sellers is about 3 thousand per day.
- 310+ million active users;
- 2.5+ billion monthly website views;
- 20+ product categories;
- 350+ million sale items.
Amazon is a well-known brand with its own line of services and products. However, you can become a member of this online community as a third-party seller. It costs 12.99$ per month when using a professional account. If you sell as an individual, you only pay 0.99$ per item sold.
The most popular products are video games, toys, books, clothing, shoes, jewelry, etc.
Amazon follows B2C and B2B business models. The platform is based on a horizontal pattern, delivering its customers both goods and services.
Why users like Amazon:
- Amazon offers the widest number of selling items, compared to other platforms.
- The marketplace has an easy-to-navigate interface both for novices and professionals.
- Amazon offers products that users can be interested in, based on their shopping and browsing history.
- The platform offers flexible shipping settings and printing labels from the site.
- With Amazon, you can sort reviews and ratings of goods and services, from positive to negative, taking your decision faster. Over 90% of customers don’t buy a product with less than 3 stars.
Pierre Omidyar incorporated eBay in 1995 as a B2C and B2B platform. The online shop was founded as a part of a personal website. Today, eBay is one of the most powerful marketplaces, selling lots of products and services.
This e-commerce platform is based in San Jose, California, and has more than 24 international websites all over the world, including the USA, Canada, the United Kingdom and Northern Ireland, China, Japan, Thailand, Australia, etc.
- 175+ million active users;
- 1.2+ billion monthly website views;
- 20+ product categories;
- 350+ million sale items.
eBay is primarily an auction which promotes sales between third-party and sellers. A buyer needs to pay 3-10% of each item, depending on the category, without any extra fees. The platform also proposes a subscription option.
The most commonly bought items on eBay are home decor and garden accessories, tech, fashion and shoes, jewellery and watches, collectibles and books.
eBay business model includes auction sales based on a horizontal platform. It is a B2C and C2C marketplace for buying and selling goods.
Why users like eBay:
- The advanced search engine enables users to look for items by category, keyword, location, currency, and more.
- eBay is designed with their customers in mind, so you can easily add the desired product to your wish list or favourites.
- The platform proposes multiple payment systems for sellers, such as Escrow.com and PayPal.
- eBay offers new, pre-owned, and unique goods for auction or at a fixed price.
Etsy is based in New York City and founded in 2005 by Robert Kalin, Chris Maguire, and Haim Schoppik. It was launched as an e-commerce site, focused on handmade and vintage goods, such as clothing, home decor, furniture, toys, jewellery, and difficult-to-find factory-manufactured items.
Now, covering more than 80 countries worldwide, Etsy has become the most popular website for handcrafted goods with the annual revenue in 2018 more than $600 million. With the platform, it is easy to run online business from home, as 95% of active users do.
- 35+ million active buyers;
- 52+ million monthly website views;
- 20+ product categories;
- 50+ million sale items.
On Etsy, there are no monthly fees to sell your goods. However, you need to pay 0.20$ for a listing fee and 5% of the item sold.
Etsy is based on a horizontal platform. Being a C2C marketplace, it sells only personal brand handcrafted goods in different categories.
Etsy is specialized in handmade products, such as toys, home decor, clothing, and vintage goods.
Some more facts:
- 95% of vendors run their business from home.
- All vintage goods sold on Etsy are more than 20 years old.
- The platform offers 92% of goods you can’t find anywhere else.
- 65% of Etsy sellers use their online shop as a way to get additional income.
Why users like Etsy:
- Etsy has its own analytics. It means that vendors get all the information about orders, bookmarks, visitors, etc.
- The marketplace offers a strong logistics system based on weight and dimensions of an item. Moreover, a seller can print the shipping information from the website and send it to a buyer.
- One more powerful feature of Etsy is its promotional engines. For example, you can use keywords in the item description, so that your audience can find the needed product faster.
- Etsy is a very supportive and user-oriented site. It offers sellers techniques on how to present their brand and profit from the platform to the fullest.
- The marketplace has an app designed for sellers. It provides all the statistics needed. Furthermore, vendors can manage their Etsy shop right from the app.
Bonanza was started in Seattle, Washington, in 2008 by Mark Dorsey and William Harding, and in 2016, it was titled as the prime alternative to eBay. The platform was designed with collectors in mind and accents on hard-to-find books, records, stamps, coins, vintage jewelry, and more. Though, on Bonanza, you can find everything: from sunglasses to health & beauty products and home decor.
The main marketplaces include the UK and Northern Ireland, Germany, France, Spain, India, Canada, and Mexico. However, Bonanza sellers come from more than 200 countries globally.
- 2.5+ million active users;
- 7.2+ million monthly website views;
- 20+ product categories;
- 20+ million sale items.
Bonanza is a seller-centric platform. Sellers need to pay neither listing nor monthly fees. The platform only charges 3.5% of each item sold.
The site focuses on new and secondhand clothes, accessories and jewellery, goods for home and garden, and more.
Bonanza is a B2C and C2C online marketplace, selling unique and vintage goods. It is based on a vertical platform.
Why users like Bonanza:
- Bonanza is integrated with Facebook and Google.
- The marketplace proposes strong communication channels between vendors and buyers. They can interact via a built-in online chat.
- Bonanza helps sellers to create their unique brand and easily promote it.
- The platform is synced with Amazon and eBay. This means sellers can easily import the entire product list from those platforms to their Bonanza account.
- The site has a clear and easy-to-navigate interface, convenient both for buyers and sellers.
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Rakuten is the second most popular website, after Amazon, to buy electronics online. Originally based in Japan, today, this marketplace sells in 30 countries, including the USA, Canada, the UK, Spain, India, and Mexico. Moreover, the platform has separate sites in Germany, France, Brazil, Thailand, Malaysia, Indonesia, and Taiwan.
Rakuten was founded in Tokyo, in 1997, by Hiroshi Mikitani. The platform has become the fourth largest marketplace in the world, and is expanding its boundaries day by day.
Rakuten is an innovative company that aims to attract knowledge and creativity, thus helping their partners and customers to develop new thinking, set goals, and achieve them.
Global Innovation Company: Empowering people to realize their dreams.
- Hiroshi Mikitani, Rakuten Chairman and CEO
- 90+ million active users;
- 16+ million monthly website views;
- 10+ product categories;
- 200+ million items for sale.
Rakuten charges monthly fees of 33$, 8-15% product commission and 0.99$ per each item sold.
Rakuten is based on a horizontal platform. It is a B2B and B2C marketplace for buying and selling goods.
Rakuten 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 users like Rakuten:
- One can easily handle their store within the marketplace to build the brand according to their business needs.
- Rakuten offers its sellers up to 20 shipping options to be more flexible and buyer-oriented.
- The platform has perfect seller tools and support.
- On the marketplace, a vendor can create their own shop, add products, and have a blog.
- Rakuten would be a perfect solution if you are looking for an alternative entry point to the e-commerce business.
The video below shows how the largest e-commerce giant Amazon is expanding its market in Japan in competition with Rakuten, trying to gain trust of Japanese customers.
Comparison of 5 top online marketplaces
There exist a lot of various marketplaces, each designed for a specific audience in mind. For your convenience, we have prepared a short summary comparing Amazon, eBay, Etsy, Bonanza and Rakuten.
To decide which business model suits best, you need to examine the pros and cons of each marketplace, consider their fee structure, pay attention to the traffic, and learn their rules and regulations. Afterwards, pick those models which will help you build a selling and competitive marketplace.
|Main features of top online platforms|
|Monthly membership fee||Listing fee||Commission||Goods||Number of users|
|Amazon||12.99$ per month, for a professional account||None||0.99% per item as an individual||Video games, toys, books, clothing, shoes and jewelry, cameras and electronics||310+ million|
|eBay||None||Free first 50 listings||From 3% to 10% per item||Home decor and garden accessories, tech, fashion and shoes, jewelry and watches, collectibles and books||175+ million|
|Etsy||$10 per month for Etsy Plus||0.20$ per item||5% per item||Handmade toys, home decor, clothing, and vintage goods||35+ million|
|Bonanza||None||None||3.5% per item||New and secondhand clothes, accessories, jewellery, goods for home and garden||2.5+ million|
|Rakuten||33$||None||From 8% to 15% product commission and 0.99$ per item sold||Electronics, kids and baby goods, clothing, cars and motorcycles, food and drinks||90+ million|
Further reading: How to Start Your Own Online Marketplace?
Thanks to technological innovations, over the last several years, online marketplaces have gained huge popularity among buyers, as they are convenient, provide a great number of goods and services, efficient searching tools, different payment options, etc.
Since a lot of shopping has moved online, and this tendency is not going to slow down, marketplaces have become a widely-used business model.
If you have an idea of a marketplace in mind, and need help 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 an online marketplace that users will love.
Let’s get in touch!