Online marketplaces are taking over the Internet. In the next year, online marketplace sales are expected to reach $350 billion, which would mark an all-time high in the e-commerce world. And it’s no wonder. The convenience and ease that online marketplaces provide for consumers means that more and more of them are popping up each and every day.
What is an Online Marketplace?
An online marketplace, also often called an e-commerce marketplace, combines products or services from other companies to bring everything together in one, convenient spot. Big-time examples of online marketplaces include Amazon, which purchases products from other retailers and then takes care of payment and shipping when it sells them back to consumers, and eBay, where private sellers are the product providers. Craigslist is also an example of one, often providing services in addition to products. The goal of an online marketplace is to curate products or services from other vendors so that consumers can easily purchase them.
This provides a complete solution and economies of scale, so companies focus on their products and services opposed to overhead business services. This delivers commodity services to companies, including an online storefront, marketing, payment processing, shipping, support, etc… However, the challenges of launching a marketplace are exponentially more compared to a direct online business. It is called the “Empty Room” dilemma, since you have to target 2 markets to make it successful. Balancing the growth of buyers and sellers creates a unique hurdle to solve in a go to market strategy. For example too many buyers with limited products or Too much product with no buyers will not grow the marketplace.
Why is an Online Marketplace Beneficial?
An online marketplace is beneficial to everyone involved. The consumer receives the conveniences — and often discounts — of shopping for a specific category of product or service, all in one place. Many online marketplaces also offer faster shipping than the service or product provider.
The service or product vendor wins, too. They receive additional business from the marketplace, which is bringing their products to a new group of consumers they may not have otherwise engaged with. In many cases, getting picked up by an online marketplace also means a steady stream of business.
What is the Upside of Having a Marketplace for Sourcing Data?
Products and services are some of the most commonly sold items online, but just as they can be curated and presented to consumers, so can data. A data marketplace saves marketers, journalists, government organizations and business people the trouble of collecting data through surveys or interviews. A marketplace that specializes in data connects people who have data — or can easily access it via digital scraping, mass surveys and more — with those who need access to the numbers.
By hosting a website providing data to those in need, an online data marketplace creates a bridge between the data vendors and the person or organization who is in need of data. This type of online marketplace provides convenience and speed to its consumers in the same way that Amazon or eBay appeals to shoppers. The only difference is that e-commerce consumers are after clothing, goods and products, whereas data shoppers are after the numbers.
The convenience that online marketplaces provide for consumers makes them a go-to destination for shoppers around the world, as well as an industry that will continue to grow in the future. But while this traditional e-commerce approach has dominated the industry for years, a data marketplace brings numbers to those who need them and it is a high growth area for the future. In addition, it provides additional educational content and tools to source the right data at the right price.
In a digital age, in which we so heavily rely on technology and data-driven numbers to make decisions, an online marketplace that provides the information its consumers are hungry for will continue to make waves in online industries. Data marketplaces are changing the way we think about the online world and provides access to more information than ever before, right at the consumer’s’ fingertips. As consumers, companies and organizations continue to hunger for information, online data marketplaces will thrive.