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Anonline marketplace (oronline e-commerce marketplace) is a type ofe-commerce website where product or service information is provided by multiple third parties. Online marketplaces are the primary type ofmultichannel ecommerce and can be a way to streamline the production process.
In an online marketplace, consumer transactions are processed by the marketplace operator and then delivered and fulfilled by the participatingretailers orwholesalers. These types ofwebsites allow users to register and sell single items to many items for a "post-selling" fee.
Because marketplaces aggregate products from a wide array of providers, the selection is wider, and availability is higher than in vendor-specific online retail stores. Some online marketplaces have a wide variety of general interest products that cater to almost all the needs of the consumers, others are consumer specific and cater to a particular segment. Online marketplaces became abundant in 2014.
Business-to-business (B2B) online marketplaces are platforms that allow companies to buy and sell products or services to other businesses. These marketplaces typically focus on a specific product or service category and are used by businesses to find suppliers, negotiate prices, and manage logistics.
Some examples of B2B online marketplaces includeVerticalNet,Commerce One, andCovisint, which were some of the earliest B2B marketplaces to emerge in the early days ofe-commerce. More contemporary B2B marketplaces include EC21,Elance, andeBay Business, which focus on specific product or service categories and facilitate complex transactions such asrequests for quotations (RFQs),requests for information (RFIs), andrequests for proposals (RFPs).[1]
Online marketplaces areinformation technology companies that act asintermediaries by connectingbuyers andsellers. Examples of prevalent online marketplaces forretailingconsumer goods andservices areAmazon,Taobao andeBay. On thewebsite of the online marketplace sellers can publish theirproduct offering with aprice and information about the product's features and qualities. Marketplace sellers often utilize amarketplace integrator or channel integration software[2] to efficiently list and sell products across multiple online marketplaces. Potential customers cansearch andbrowse goods, compare price and quality, and then purchase the goods directly from the seller. Theinventory is held by the sellers, not the company running the online marketplace. Online marketplaces are characterized by a low setup cost for sellers, because they do not have to run aretail store.[3] While in the pastAmazon Marketplace has served as a role model for online marketplaces, the expansion of theAlibaba Group into related business such aslogistics,e-commerce payment systems andmobile commerce is now trailed by other marketplace operators such asFlipkart.[4]
For consumers, online marketplaces reduce thesearch cost, but insufficient information on the quality of goods and an overloaded goods offering can make it more difficult for consumers to makepurchasing decisions. Consumers' ability to make a purchasing decision is also hampered by the fact that an online marketplace only allows them to examine the quality of a product based on its description, a picture andcustomer reviews.[5] Another characteristic of online marketplaces is that the same product can be offered by several merchants. In this case, consumers can often make the selection of a merchant with the support of reviews of that merchant, for example. Despite many conceivable factors influencing merchant selection, such as convenience, seller ratings, delivery options and a wider selection of goods,[6][7] customers choose primarily on the basis of the lowest price for a particular product.[8]
Peer-to-peer (P2P) online marketplaces enable direct transactions between individuals, often facilitated by an intermediary platform that provides services such as payment processing, dispute resolution, and user verification.[9] Unlike traditional e-commerce platforms that primarily follow a business-to-consumer (B2C) model, P2P marketplaces allow users to act as both buyers and sellers, fostering decentralized commerce[10]
There are marketplaces for theonline outsourcing of professional services like IT services,[11]search engine optimization, marketing, and skilled crafts & trades work.[12] Microlabor online marketplaces such asUpwork andAmazon Mechanical Turk allowfreelancers to perform tasks which only require a computer and internet access.[13] According toAmazon, its Mechanical Turk marketplace focuses on "human intelligence tasks" that are difficult to automate computationally. This includescontent labelling andcontent moderation.[14]
Microlabor online marketplaces allow workers globally, without a formal employment status, to perform digitalpiece work, such as classifying an image according to content moderation guidelines.Gig workers are paid for each task performed, for example US$0.01 for each moderated image. Gig workers accumulate payment on the microlabor platform.[15]
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In 2004Yochai Benkler noted that online platforms, alongsidefree software andwireless networks, allowed households to share idle or underused resources.[16] As the sharing economy inspires itself largely from theopen source philosophy,[17] open source projects dedicated to launching a peer to peer marketplace include Cocorico[18] and Sharetribe.[19] In 2010CouchSurfing was constituted asfor-profit corporation and by 2014 online marketplaces that consider themselves part of the sharing economy, such asUber andAirbnb, organized in thetrade associationPeers.org.[20]
A 2014 study ofoDesk, an early global online marketplace forfreelance contractors, found that the serviceoutsourcing ofmicrowork increased opportunities for freelancers regardless of their geographic location, but the financial gains for most contractors were limited as experience and skills did not translate into higher payment.[21]
A general criticism is that the laws and regulations surrounding online marketplaces are quite underdeveloped. As of consequence, there is a discrepancy between the responsibility,accountability and liability of the marketplace and third parties. In recent years online marketplaces and platforms have faced much criticism for their lack ofconsumer protections.[22]
In 1997Yannis Bakos studied online marketplaces and came to regard them as a special type ofelectronic marketplaces. He argued that they reduce economic inefficiencies, by lowering the cost of acquiring information about the sellers' products.[23]
The operators of online marketplaces are able to adapt theirbusiness model because of the data they hold on the platform users. Online marketplace operators have a unique ability to obtain and use in their economic decision makingpersonal data andtransaction data, but alsosocial data andlocation data. Therefore academics have described online marketplaces as neweconomic actor, or even as a new type ofmarket economy. In 2010Christian Fuchs argued that online marketplaces operatedinformational capitalism. The inherentfeedback loop allows the operators of online marketplaces to grow their effectiveness as economic intermediaries. In 2016Nick Srnicek argued that online marketplaces give rise toplatform capitalism.[24]
In 2016 and 2018 respectively,Frank Pasquale andShoshana Zuboff cautioned, that the data collection of online marketplace operators result insurveillance capitalism.[25]