5 Powerful Reasons Why You Should Invest in Marketplace Development

An online marketplace is a type of e-commerce website that connects third-party sellers with buyers. Nowadays multi-vendor marketplaces gain more and more traction due to their multiple possibilities for revenue growth.

In fact, Amazon's business grew from $1 billion to $10 billion in sales in just 3 years. Also, up to 87% of online buyers make purchases via marketplace websites.

If these statistics sound quite inspiring to you, keep on reading to discover what makes marketplace websites so profitable and attractive to investors.

Help channel partners increase sales

When companies visit a manufacturer’s website, what they see are a product catalog and links to distributors. To complete a purchase, they have to follow a link to another website or look for a phone number to get in touch with a channel partner. These extra steps may lead to decreased conversion rates, as customers would rather look for different options with a more optimized user experience.

With an online marketplace you can help channel partners avoid customer loss.

Stay ahead of the competition

e-Commerce has replaced the paradigm of one-to-one sales with an ecosystem model that focuses on marketplaces. Developing your own online marketplace is a reliable way to provide your e-commerce business with sustainability and surpass your competitors in revenue growth.

Sell more products without inventory management

High traffic doesn’t always mean bigger income. Its reason is that some B2B companies have a poor product assortment. Even if they widen the range of products, there will still be a necessity to widen inventory too.

With online marketplaces, on the other hand, you will be able to offer a better choice of products without adding inventory.

Keep complete control over your orders

When you use channel partners for selling, you are aware of the number of orders, but you are unable to track who exactly is interested in your products.

Selling via online marketplaces is more informative. In this case you will be able to find out more details about your clients: their location, business niche, etc. This data will be quite useful when you reconsider your marketing strategy.

Check your new product demand

It is one of Amazon’s success components. Selling on marketplace websites is an efficient way to consider the demand for different product categories. For example, if one of your sellers’ products turns out to be very popular, you may try to repeat their success and manufacture a similar product.

Conclusion

The phenomenon of the marketplace lies in bringing maximum benefit to both marketplace owners and independent sellers. Highly recurrent revenues, vast addressable market, opportunities for scaling, and sales channels expanding are what make this business model a potentially lucrative investment.

If these are compelling reasons for launching your own online marketplace, this article will tell how you can realize your idea in the most cost-efficient way possible.