What are the different types of marketplaces?

It is a general concept that provides platforms with the possibility to pay for goods via the Internet. It mainly applies to stores operating through a global network.
Usually, two factors are considered to classify any e-commerce platform:

1. What do they sell?
2. Whom do they sell?

Based on the responses, e-marketplaces are assigned a specific online trading model. There are 4 fundamental models built on the relationship between consumers and businesses in different variations: Business to business (B2B), Business to business (B2B), Consumer to consumer (C2C), Consumer to business (C2B).

B2C are platforms for retail sales to consumers. B2B means trade between business representatives, excluding work with retail and small wholesale. C2C are the spiritual heirs of eBay, created for trade and exchange between ordinary users. In recent years, small merchants have been trying to get into these marketplaces, positively affecting price dynamics. C2B is a new kind of trading platform where consumers provide their services and goods to businesses.

B2C are platforms for retail sales to consumers. B2B means trade between business representatives, excluding work with retail and small wholesale. C2C are the spiritual heirs of eBay, created for trade and exchange between ordinary users. In recent years, small merchants have been trying to get into these marketplaces online, positively affecting price dynamics. C2B is a new kind of trading platform where consumers provide their services and goods to businesses.

Customer focus is a critical factor when choosing a platform for your business. If a company is interested in working with large volumes of goods, there is nothing better than a B2B model. Commerce in consumer products automatically places the entrepreneur on the B2C platform. To start a merchant career, a C2C marketplace is ideal, with the lowest prices for publishing advertisements and offers, and the percentage of deductions for the sale is minimal here. C2B is suitable for industry experts, bloggers, and public figures with a developed personal brand.

More often, the peer-to-peer concept is used in the IT field. For commerce, the P2P model is the ability to minimize trading errors. Generally, it is a standard online store where the consumer interacts with the supplier directly. The fundamental difference from the classic marketplace is isolation. Instead of hundreds of merchants, only one is present here. Customer flow is ensured through custom and native advertising. Logistics is standard for sites of this type, but there are exceptions like cooperation with local carriers and logistics companies.

More often, the peer-to-peer concept is used in the IT field. For commerce, the P2P model is the ability to minimize trading errors. Generally, it is a standard online store where the consumer interacts with the supplier directly. The fundamental difference from the other types of online marketplaces is isolation. Instead of hundreds of merchants, only one is present here. Customer flow is ensured through custom and native advertising. Logistics is standard for sites of this type, but there are exceptions like cooperation with local carriers and logistics companies.

Despite the obvious similarities, these models have cardinal differences like interaction, commission, and individual characteristics.

Business to Business. The model is used for trade between companies. The subjects of trade relations are wholesale goods and services. It includes giants like the Alibaba Group. Their field of activity allows them to provide quality products in local markets in large volumes. The focus on working with serious companies cuts out small wholesalers and consumers. B2B marketplaces most often have developed logistics and partnerships with large companies.

B2B can be called a profiled model of relationships between companies. In this case, special platforms help to structure all offers and weed out "small players" because the entry threshold is very high, and it may be "too tough" for small companies. The quality and quantity of goods and services here fully justifies the above-average prices because companies lose their reputation in case of non-compliance with standards, sinking to the very bottom of the market hierarchy.

The basic types of B2B e marketplaces and services include differences in products and niches they operate.

Wholesale purchases are not limited by the capabilities of B2B sites. A fairly young branch is B2B-B2C engagement. In a way, it is analogous to dropshipping, but in a slightly different context. The retailer publishes a product on the B2C platform, which, after purchasing by the user, is sent by the supplier/manufacturer directly, i.e., the seller receives the difference between wholesale and retail prices, and the supplier takes care of logistics and order processing. This model of work is quickly developing, keeping small businesses afloat.

Consumer to Consumer. eBay can be confidently called the brightest representative of this kind. Although business representatives have migrated there, it initially was a platform for trade between ordinary users. Like an auction with bids. The main advantage is that anyone can put up their goods and services for sale. It is also a minus because there are too many unscrupulous sellers here. Most often, they work at local sites, but sometimes they also go to international marketplaces.

Flexibility is a distinctive feature of the C2C model. In addition to the range of goods and services, there is an important factor that affects the final price. Previously, this factor was the "auction" model, but now it is communication. Сommunicating with the seller, you can reduce the price or negotiate bonuses and gifts. It makes C2C stand out from the background of other models (possibly similar to P2P). All this comes at a price. The administration of different types of e marketplace susually sets a fixed percentage of ~2-3% of the value, which is withdrawn as a commission upon a successful transaction.

Thus like other platforms, there are risks at C2C. First of all, they arise due to unscrupulous sellers who have occupied online marketplaces. Most often, they offer goods at a very attractive price, sometimes 2 times cheaper than the market price, ask for an advance payment, and then disappear. Due to the abundance of scammers, a rating system was introduced to provide screening of users.

What does it mean for beginners? Difficulty getting started. Since sellers without high ratings are viewed with suspicion, the demand for their goods/services will be underestimated. With the first successful sales and gradual gaining of rating points, it will end, ensuring trust and demand for the goods.

This term stands for co-financing. This model is popular for startups, culture, and technology. The main tool for achieving goals here is consumer money. This is the main difference from other types of online marketplaces

For example, the SeedInvest website collects money for the implementation of IT projects. Investments are paid off from the finished product of the developers, and the distributors receive income from the release of products. There is always a high risk for startup founders and investors at these sites because money is not returned if the project fails.

The main condition is a good idea. It affects the financing of interesting projects most of all. It doesn't really matter if it is a product, a service, or an animal rights movement. If the idea goes off, the startup receives a powerful financial incentive and goes into development.

But there is a fly in the ointment. Before launching a campaign, you need to analyze similar types of marketplaces, competitive offers, and define the target audience. Next, it's necessary to create a detailed financial plan on paper, considering possible risks and changes in the market. The more detailed the plan, the higher the probability of the application being approved. After that, it will be helpful to create a CTA and creative content or examples of a future product.

To attract users, it is also essential to understand what the investor will receive after the project is completed. There can be both a free product and a share in the business. The platform, for example, often takes part of the funds raised as a commission for services. In the case of top investors, they thus buy stocks, guaranteeing a refund and profit if the startup is successful.

In total, crowdfunding is a promising offshoot of e-commerce. Of course, there is a risk of failure, but in case of success, the initiator will get worldwide recognition and their own business.

So what is a marketplace platform? It is a resource for information, marketing, and investment opportunities. Finding a platform suitable for a specific company is much easier if you deeply understand the differences between the types of marketplaces.