What Is the Difference Between E-Commerce and Marketplace Solutions?

Let's face it; technology has changed the entire landscape of sales and purchases and how customers transact online. In lieu of technological evolution, different platforms are ruling customer preferences, including catering to various customer groups.

Of these online groups, e-commerce platforms and e-marketplace solutions continuously pave the way for a better online model. But the main point is, what is the difference between these two prominent online structures, and how can consumers and merchants benefit from these two varieties?

Before discussing these segments, let's review the current e-commerce and marketplace payments landscape.

Current eCommerce and Marketplace Payments landscape

The pandemic has a significant role in shaping the e-commerce industry. As physical purchases stopped, the online sector stepped in to deliver goods and services to people. But there are a few significant participants within this industry who have made it a possibility.

There are a few notable trends within the online industry, from emerging fintech players to the adoption of contactless payment methods. 

Here are a few trends to reckon with within the e-commerce and marketplace payments landscape:

1. New Fintech Players

New players continue to throng the saturated market to try their luck. Traditional brick-and-mortar banks and payment giants are providing online services to woo consumers and facilitate payment services. For example, Apple's partnership with Goldman Sachs in the US led to the launch of the Apple credit card.

Similarly, consumers prefer this fusion of technology with brands since it assures them of better services and up-to-date technology. Due to this ongoing fusion, the fintech industry has reached a mass adoption stage, wherein it continues to thrive and trudge forward to make better decisions.

2. Contactless Payment Adoption

With the onset of the pandemic, contactless payment became the new age mantra. Given the heightened health risks and in an attempt to avoid physical contact, consumers began to accept the ideologies of contactless payment methods readily. What started as a necessity has become a trend, simplifying the lives of merchants and consumers alike.

3. Digital Wallets Are New-Age Payment Methods

Digital wallets have become tomorrow's technology, mainly since they facilitate contactless payment methods. Famous banks, payment conglomerates, and other fintech companies are investing in the digital space to ride the technology-driven wave. With new payment options emerging regularly, the public has many choices.

But how do e-commerce and marketplace platforms fit into the broader payment landscape? There are distinguishing factors between the two, which one needs to understand to conclude this pertinent discussion.

What Is an E-Commerce Platform?

An e-commerce platform is where merchants and consumers come together to purchase and sell their goods and services. As a merchant, you can list your available products on a website, which a consumer can add to a cart and purchase by making the requested payment. 

The process is relatively straightforward, as an e-commerce option is available to everyone with access to the internet. 

Here are some inherent pros and cons to consider if you plan to operate a native e-commerce website. 

Pros:

1. The platform is your online store:

When you have various products to sell to the broader public, you can always list them on your personalized online store. Once you have created the store, you can invest in various options to enhance the customer's shopping experience and take it up a notch. With your own online store, you're the captain of your ship, able to steer it in any direction to achieve your desired results.

2. Remove unnecessary costs:

As an online platform, there are seldom overhead costs, like rent, electricity, furniture, and other running expenses. While you must incur a few maintenance costs to run a website, these are less than a brick-and-mortar outlet. 

3. Create your brand awareness:

Brand management is possible in multiple ways, and one type does not fit all. You can pick and choose different branding techniques and use the one you feel is the closest to your business idea, product classification, and selling techniques.

Cons:

1. Unavoidable Website Downtime:

As an online website, there is always a dependency on the hosting agency to troubleshoot and reduce downtime. Nonetheless, there is little to an almost negligible downtime reduction since hosting your business online is always a technological drawback. 

2. Domain Competition:

There was a time when brands like Amazon and Flipkart were the only brands in the online industry. However, many other brands have emerged slowly and steadily, and the domain competition has increased drastically. When dealing with stiff competition, you need to be on top of your game and look at various opportunities to beat the competition and emerge victorious. 

Top 5 E-Commerce Platforms

1. Shopify

Shopify is the world's most in-demand choice for an online store. The e-commerce platform is ideal for beginners and advanced users because it is user-friendly and can handle high sales volumes.

Some factors include:

1. A slew of apps and plugins:

   Shopify offers 6700+ apps and plugins to its users, who also get various advanced tools for connecting to social media, product cataloging, order fulfillment, and analytical sales reporting. You can access around 3000 apps within the platform, making it one of the biggest platforms.

2. Ideal for all organization types: 

   No matter if you are a small, medium, or large-sized organization, Shopify has something handy for you already.

2. Wix

Wix is the best choice for your business if you want to showcase a limited inventory. While it does allow you to showcase a wide variety of products, it's usually restricted to a single product line.

You can use their 122 free online store templates, one of the best e-commerce options for small and medium businesses.

Some notable factors include:

1. Easy to set up features:
   

   With its range of industry-specific templates, and in-platform guides, there is always something to start with in Wix.

2. Easy to edit and design:
   

   Designing a website is the most tedious part, especially when you must think about multiple factors simultaneously. However, Wix does all the heavy lifting and allows you to design your site in a few simple clicks.

3. BigCommerce

Just like Wix is ideal and tailor-made for small and medium businesses with a primary product line, BigCommerce, as the name suggests, works well with large organizations with a heavy product line.

If you have a large inventory filled with multiple SKUs, warehouses, units, variants, and channels, chances are with BigCommerce; you have it all covered conveniently.

Some additional factors include:

1. Inventory management:
   

   BigCommerce is ideal for complex inventory management, given its 600 variants, which roll into a single SKU. Imagine the variety and the level of distinction you can have within your product range on a single platform.
   

2. No-code platform:

   Designing is the easiest part of BigCommerce since you can design everything without writing a single line of code.

4. Volusion

This cloud-based platform allows you to create and store customer information safely without ever needing to protect your customer's financial information using additional methods.  

You can work seamlessly with the drag-and-drop features of the website builder platform and use their in-page editing tools to enhance your website's utilities.

Some beneficial features include the following:

A) Multi-channel integration

B) Seamless integration with Amazon, eBay, and other major platforms.

C) Transparent inventory management system with prompting facility

5. Weebly

As an e-commerce platform, Weebly offers value for money to the end users. It provides a series of plans, which you can choose depending on the nature and size of your business. You can select a plan based on the number of products you intend to sell via your online store.

To manage your stock and inventory effortlessly, you can sell various goods, including digital, service-based, and even physical goods.

Some additional benefits include the following:

1. A mobile app to manage your store on the go

2. Multi-faceted features, including abandoned cart recovery, real-time shopping rates, and gift cards, depending on your chosen plan.
   

Deep Dive into: Top 7 Popular E-commerce Payment Solutions in 2023

What Is Marketplace?

A marketplace is an online app or website that brings different sellers together and facilitates shopping. In such a case, the marketplace owner is not the inventory owner and only gets the buyers and sellers together. 

eBay is an apt example of such an arrangement since they run an online marketplace that sells different products from different sellers to multiple consumers.

As an online platform, marketplaces usually offer great convenience to consumers and variety, which helps products sell. Imagine scrolling through different sellers of the same product on a single page on one platform. 

Some typical marketplace types include:

1. Vertical
2. Horizontal
3. Global  

Each type is limited by its product range, and value is added to every product type that is marketed and sold online in a marketplace. 

Pros

1. Wider reach:

   Platforms like Amazon and eBay offer small businesses plenty of opportunities to sell their products online to different consumers. In another scenario, small companies might be unable to sell their products in such a broad forum otherwise.

2. No technical burden:

   When you are associated with a marketplace, you don't need to worry about technical downtime and inherent hassles. Such marketplaces have their hosting and a team of experts who take care of initiation and ensure a smooth technical experience for customers and merchants alike.

3. Customer trust:

   In an online marketplace, you hardly need to worry about building a reputation for your brand and customers' trust. Platforms like Amazon associate with the best merchants online and support trusted merchandise for their consumer base. 

Cons

1. High competition:
   

   When many sellers sell the same product, it becomes hard to beat the competition easily. Such a practice can go against merchants who might be starting in the market.

2. Payment Delays: 
   

   Online and Offline sales are the same, especially regarding payments. Offline methods provide an immediate payment solution, while online methods often come with a delay, causing unrest and doubt in the merchant's mind.

3. High Commissions:
   

   Many merchants avoid paying high commissions to such marketplaces since it cuts into their profits and yields less value at the end of the transaction.

Top 5 Marketplace Solutions

1.  Amazon

   Websites like Amazon have changed the way people shop online. While the competition is a big challenge for merchants advertising on Amazon, reaching out to a multi-million buyer base is advantageous.

2. eBay 

   eBay, just like Amazon, is an online marketplace that constitutes a significant market share. It serves a whopping 180 million buyers and sellers globally. Its presence in 190 countries has made it a global brand, as people throng it to buy products online.

3. Etsy

   If you are looking for creative, unique, and different products, Etsy is the place to go. The marketplace sells handmade items; artisans, collectors, antique sellers, and many others sell their products here.

4.  Walmart

   Unlike the other names on this list, Walmart is an invite-only marketplace. It uses commission fees and gives sellers access to millions of customers visiting the platform. Sellers can also use Walmart's affiliate websites to make a quick buck.

5. Alibaba Group

   AliExpress, run by Alibaba Group, is another renowned name in online marketplaces. It is a Chinese multinational company that sells retail, internet, and technology-related products.

   Since it is a B2B website, it owns a series of websites under its primary banner.

Marketplace vs. E-Commerce : Understanding the Difference

1. Product range:

   E-commerce websites focus on selling your list of products specifically. Everything is your own, from creating your brand awareness to bearing the costs and enjoying the fruits of your labor. 

   On the other hand, there is no freedom when you are advertising and selling your products via an online marketplace. You must pay a high commission, advertising, membership, and other charges to benefit from displaying your product on such a platform. 

2. Limited sellers:

   E-commerce platforms rank high when offering a series of products under the same banner. The product lines are usually limited, but this also depends on how many products and services you want to list in a single go. Usually, customers only get a few options, as the number of sellers is limited.

   Online marketplaces bring plenty of options for the end-users since different sellers sell the same product. As an end-consumer, you get many different products that can be sold under the same roof. You don't need to jump from one platform to another to buy such products. 

3. Business size:

   E-commerce platforms vary as per the size of the business. On the contrary, when you are associated with an online marketplace, you can register your business without worrying about your business size, inventory size, and product type. 

4. Competition:

   Finally, the competition within the e-commerce industry can't match the competition levels in an online marketplace. Suppose you compare an e-commerce store with an online marketplace. In that case, you will realize how easily a customer can move from one product to another in a matter of minutes, given the ease of availability and usage in the latter. 

How inai Can Help You With E-Commerce and Marketplace Payments?

Inai, as a payment aggregator, helps you manage multiple payment gateways from a single platform. But how can a payment aggregator help you manage your e-commerce and marketplace payments? 

As a marketplace, you are dealing with different payment methods. As an e-commerce store, you often face challenges managing and creating localized customer checkout experiences. To ensure a seamless customer experience, inai can step in with their fast checkout vault, error handling, and optimizing failed transactions.

Give it a read: How does MEAMI Model & PayFac Model Works? 

You can bid farewell to failed cart transactions by customizing your payout schedules across different processors. Additionally, there is always an option to split recipients to handle payin and payouts separately.

On the contrary, if you own an e-commerce store, you can process payments, manage seller payouts, and effectively accept/transact in local payment methods from a single platform. 

Some additional benefits which differ from the marketplace solutions include hosted checkout drop-in widgets and payment links. Manage different subscriptions and platform-oriented payments from a single platform to enhance your customer experience and drive an analytical approach to customer handling.