What Is a Marketplace?

MarketPush Tackles the Basics

The Basics

Can you define a marketplace?

A marketplace is an E-commerce model that facilitates the purchase of products and services between a buyer and various sellers. The marketplace operator may or may not sell their own products on the website, but they provide a website for other sellers to present their products for sale. Participating sellers are responsible for shipping purchased products and, in turn, they either pay the marketplace operator a fee to participate and/or a commission on the products they sell via the marketplace. In a distributor model, the distributor integrates an online marketplace into its existing E-commerce platform, allowing that distributor to offer more products and brands from other distributors and manufacturers without adding inventory.

What’s the difference between a marketplace and traditional E-commerce?

In a traditional E-commerce model, the distributor owns and warehouses the inventory; in a marketplace, the distributor facilitates sales by providing the website, availability, and pricing. The supplier ships the product from its own facility. A marketplace provides greater product availability, a reduced risk of stock-outs, higher traffic, better SEO, reduced spend on inventory, warehousing, and shipping.

Timing is everything. Why is a marketplace particularly important in 2022?

Covid has accelerated distributors’ E-commerce strategies. B2B customers in particular have adapted to a new way of buying and are more comfortable making big purchases online. Amazon has created an experience in which you can find almost everything you want in one place. And customers now expect that. A marketplace lets you expand your offerings without the need to invest in any additional inventory.

Would my marketplace be separate from my E-commerce platform?

It can be. But we strongly recommend integrating it into your existing E-commerce platform. You have already invested in your brand and website. A marketplace empowers you to grow that part of your business. From the perspective of your customers, they will only see that they can purchase more products from you.

How long would it take to get my marketplace up and running?

That depends on the complexity of your existing platform. For example:

  • How many SKUs do you have?
  • What ERP are you using?
  • Do you have a PIM?
  • How much site traffic do you have?

The first step is to assess where you are today and where you want to be. But, in general, you can expect to be up and running in about six months.

Trying to nail down what a marketplace really is: Is it software? Integration? Or a service?

Actually, it’s all three! MarketPush provides you with a SaaS marketplace management platform that you, your organization, and your sellers will log into from wherever you are to monitor and manage the daily operations of your marketplace. Because that platform needs to integrate with your E-commerce site and your back-end product and payment processing systems, we also provide you with a team of integrators to set up your marketplace. When it’s up and running, you need to continue to add sellers and products. We’ve got you covered there as well: We provide a team of recruiters to help you find the right sellers and then we get them onboarded to start selling on your site.

How difficult is it to recruit sellers?

With the marketplace model taking off in B2B, more suppliers AND distributors recognize the importance of taking part. Sellers seek the type of customers you have and the value you can provide. MarketPush specializes in deploying recruiting strategies to support your marketplace goals.

I know nothing about onboarding. How would that work?

“Onboarding” means adding marketplace sellers to the marketplace. One of the benefits of a marketplace is that the seller is responsible for adding elements such as product images, descriptions, and data sheets, in addition to pricing and inventory. These tasks traditionally are managed by the distributor. By using this model, sellers can be up and selling in a fraction of the time it would take you to add them through your traditional model.

How much extra staff do I need to support my marketplace?

That depends on the scope of the marketplace. That said, a marketplace doesn’t require you to add any additional inventory or warehouse space. And the seller is responsible for onboarding itself onto your website. Therefore, you can manage a marketplace with a much smaller number of people than your traditional distribution business demands.

Are there additional services that would help my marketplace succeed?

Some distributors have added fulfillment services for their marketplace sellers who can’t match their logistic capabilities. This allows a distributor to earn additional revenue by leveraging existing logistical capabilities. In addition, you may want to leverage an outside team to recruit sellers. Fortunately, MarketPush has a recruiting team to handle that for you.

How can we be sure that our new marketplace will fit our company style and culture?

This is an important area to cover as part of your initial planning because change can cause some organizational churn. Engage your company leaders to develop a communication plan. It is important for employees to understand that a marketplace will enable more opportunities by helping to increase revenue faster.

Consumers love Amazon. But B2B is more complex. How do we meet that challenge?

Ultimately, a business buyer is also a consumer. Amazon has created a consumer experience that can be transferred to B2B. Yet, there are unique requirements for B2B: quoting, special pricing, logistical requirements, volume pricing, data transmission, etc. MarketPush understands these requirements and has accounted for them in our platform.

How does the marketplace account for different shipping requirements?

A distributor launching a marketplace, also known as the “marketplace operator,” will be able to configure shipping zones, methods, and carriers within the backend settings of their MarketPush SaaS platform. As a part of each new seller’s portal configuration setup, these global settings are where the sellers will insert shipping charges for specific zones and methods (by order weight or value, depending on the platform).

What happens if a seller fails to deliver a product?

If a seller fails to deliver a product, the customer will reach out directly to the marketplace operator’s customer support team or to the seller, depending on the process defined in the operator’s terms of service. The customer will create an order incident. After confirming with the delivery carrier, a new product will be shipped to the customer by the same seller. After the new product is received, the order incident will be closed. All of these actions can be managed within the MarketPush SaaS platform.

How do I ensure that my sellers fulfill shipping requirements?

Marketplace managers manage shipping expectations through onboarding/service-level legal agreements with marketplace suppliers. Marketplace managers monitor compliance with shipping agreements through the tracking of order numbers being issued before inventory is sent to the buyer. Reports can be generated through the MarketPush platform to show compliance or non-compliance with the agreed-upon expectation.

Have more questions? Get in touch with a MarketPush expert to see a marketplace in action or discuss how to help your company embrace the future of E-commerce. Email us at sales@marketpush.com.