At Mirakl, we live and breathe online Marketplaces because we have not only built them ourselves in previous lives, but we have also enabled close to 100 customers to build highly successful Marketplaces of their own. As a result, we sometimes forget that the online Marketplace model is only just hitting its stride in the mainstream, and many of you are just learning about it. It makes sense to back up and provide a short overview on exactly what Marketplaces are and why so many businesses benefit from launching their own.
Likely, the most recognizable online Marketplace example is Amazon. Third-party sellers can reach Amazon’s large volume of site visitors while Amazon can ensure breadth of product choice without actually sourcing from partners. This is a highly profitable business model as Amazon makes money simply for lending its name to a seller. When Amazon first opened its Marketplace to third-party sellers, many thought it was crazy – how could the company let customers buy products from competitors? But, as Amazon CEO Jeff Bezos said, “Since we focus on profit dollars rather than margins, we are largely neutral on whether an item is sold by us or another retailer.”
There are many other high-profile Marketplaces that have emerged in the past few years – Apple’s iTunes, Alibaba, Wayfair, Jet.com – the list goes on and on because the Marketplace model is virtually pure profit. With a Marketplace, any organization – B2C or B2B, brand manufacturer or distributor, retailer or wholesaler – can extend its product/service assortment without the overhead of inventory or incremental internal human resources.
Clearly the Marketplace model has proven successful. But, the question still seems to remain: why now? The short answer is that today’s shoppers are different than they were just a decade ago. They are empowered. They want a broad array of choices, fair prices, and a high quality of service. Delivering a shopping experience that meets customer expectations can be a challenge. Adding stock to increase assortment is risky, costly, and time consuming. Impatient shoppers will not wait around when the competition is just one click away.
While building a Marketplace can seem potentially disruptive or out of line with existing business models, nothing could be further from the truth. And, customers actually expect it – Forrester Research reports that 89% of consumers agree that Marketplaces deliver a valuable convenience.
Setting up a Marketplace allows a company to increase product breadth and grow profitability with minimal cost and overhead. Companies can quickly and easily achieve the broad assortment that customers want while avoiding negative events such as “out-of-stocks.” Marketplaces are also useful for testing new products and categories without the risk of actually stocking them.
The Mirakl Marketplace Platform™ was designed specifically to harness the expertise that Mirakl’s staff has developed from years of Marketplace operation. Mirakl’s features and functions are a direct result from lessons learned running real Marketplaces. With this knowledge, Mirakl has created a turnkey solution that allows merchants to set up Marketplaces quickly and without overhead. Click here to learn more about the Mirakl Marketplace Platform™.