Marketplaces on the Internet

A meeting place between buyers and sellers

A marketplace is a virtual platform where buyers and sellers can meet (B2B, B2C or C2C relations). Firstly, the marketplace has been thought as a real place to exchange and bid. The platform of C2C (such as Ebay) succeed due to this kind of process. On the other hand, for B2B relations, the instantaneous dimension of transactions is restricted. This restriction is determined by two reasons. Firstly, clients tend to favor their usual suppliers instead of launching new calls for tender.
Secondly, in many cases, marketplaces are used to find new potential partners and to establish a first contact between the parties. Negotiations and order placements are made in the more traditional form of a physical meeting between the partners. The more the buyer will have precise specifications, the less he will find in the marketplace the products which correspond to it. Hence the marketplace will be limited to its simple role of directory and product catalogue and know-how.

Different kinds of marketplaces

Certain marketplaces on the internet are identified as generalists (Sourcingparts, Alibaba) while others are specialized in a specific sector, (Aeroxchange, Powernext). Some marketplaces (privates) are hosted by a company or a public institution, which are also players in the market, being buyers, sellers or both (Aeroxchange, Supplyitnow). Some marketplaces (open or publics) are hosted by a third party (Ebay, Amazon).

What are the reasons for playing a role in the marketplace?

Advantages for the seller

• Enhance the visibility of his company
• Reach new markets without prohibitive marketing costs
• Meet quickly the new demands

Advantages for the buyer

• Have access to an extended supply base
• Be quickly informed of what is immediately available on the market
• Get complete information (photos, specification sheets, advice forms)
• Take advantage of prices already negotiated

Advantages and associated services offered in the marketplaces

• Information service
• Marketing service
• Financial assistance
• Supply chain management

How does a marketplace work?

The supplier

Supplier makes a tender offer or offers those goods in the form of an online catalogue or a temporary online offer.

The buyer

Depending on his specific needs, buyer searches for the tender offers made by suppliers or makes a tender offer.

 

N.B.: Transactions are done straight via the marketplace (online purchase) or finalized out of the marketplace.

What are the costs to apply to the marketplace?

Free registration

The registration in the majority of marketplaces is completely free. A wide range of basic services (concerning any of them) are free as well.

Paying ancillary services

Some services incur a cost, such as the intermediation services. A fixed sum or a commission amount on the transaction realized are then claimed.

Cost of time

It takes time to enter into the marketplace. The location of marketplaces, the reading of entry and selling conditions, the final selection of useful marketplaces, the familiarization with the browsing and the identification of quality suppliers may be complicated. Anyhow, all this does not reduce the medium- and long-term advantages in the use of this kind of communication.