How to start selling on online marketplace platforms: A checklist for entrepreneurs

Worldwide e-commerce sales are estimated to exceed $4.1 trillion worldwide, with much of this explosive growth happening on online marketplace platforms.¹

What is an online marketplace?

An online marketplace, also known as an e-marketplace, is a website or platform that connects buyers and sellers. Think of it like a digital shopping mall where you can set up a storefront to sell anything from physical goods to services to digital products.

Some online marketplaces, such as eBay and Amazon, give you broad access to global audiences, while others, like Shoppee and JD.com, are more popular in specific countries or regions. There are even local online marketplaces that focus on connecting buyers and sellers within a specific city or community.

But what’s the difference between an online marketplace vs. an online store? While both involve selling online, here’s what makes each unique:

• Online marketplace: You sell your products or services through an established platform with an existing customer base. While this means you can enjoy their built-in audience and infrastructure, you’ll also have to play by their rules and often pay fees.
• Online store: You create and manage your own website and handle all aspects of your online business, from website design and marketing to payment processing and shipping. In other words, more control but also more responsibility.

The benefits of selling on online marketplace platforms

Leveraging online marketplace platforms as part of your online sales strategy can provide numerous advantages compared to relying strictly on your own e-commerce site.

Benefits of online marketplaces include:

• Increase customer reach. Many online marketplaces have active customer bases of hundreds of millions of users, exposing your brand to more potential customers than you’d be able to reach on your own.
• Cost-effective to start selling online. Setting up an online store on a marketplace is relatively simple and can often be more cost-effective than creating and maintaining an e-commerce website on your own. Marketplaces typically handle payment processing, customer service, and sometimes marketing, inventory management, and shipping, saving you time and money.
• Sell to a global market: Online marketplaces can help you sell your products to a global audience, which can help you reach new customers and increase sales.
• Leverage positive reviews: Most online marketplaces encourage customers to leave reviews and ratings for products. A few positive reviews can help you build trust and credibility with other customers, making them more likely to buy than if they were to find your product on your website.

Types of online marketplaces

There are many different types of platforms that you can sell on. By understanding the different options available, you can focus your time and energy on getting your products in front of the right customers.

Buyer-oriented e-marketplace

Buyer-oriented e-marketplaces focus on making it easy for shoppers to find and buy a wide variety of products from many different sellers. These platforms prioritize the shopping experience, offering features like:

• Extensive product catalogs: Imagine stepping into a digital mall with millions of products, from everyday essentials to new ones waiting to be discovered.
• Powerful search and filtering tools: Instead of endless scrolling, shoppers can use powerful search and filtering tools that let them zero in on exactly what they’re looking for
• Secure payment processing: Buyer-oriented marketplaces have secure payment systems and buyer protection policies to keep transactions safe and sound.
• Buyer protection policies: Did the order arrive damaged? Or maybe it's just not what the shopper expected. Many buyer-oriented e-marketplaces offer hassle-free returns and refunds to ensure customers are always satisfied with their purchases.

Platforms like Amazon, eBay, and Etsy all fit this model, making this type of marketplace the one most people are familiar with. You would list your products on these types of sites if your business primarily sells products to consumers, known as business-to-consumer (B2C).

Even Facebook Marketplace online, while more localized, falls under this category, since it allows users to buy and sell items within their local communities.

Supplier-oriented e-marketplace

Supplier-oriented e-marketplaces, sometimes called online B2B marketplaces, connect businesses with other businesses. Think of them like digital trade shows that are open 24/7.

These platforms act as a central hub in the supply chain, making it easier for businesses to:

• Source products efficiently: Access a global network of suppliers, all in one place. For example, a restaurant owner might use a supplier-oriented e-marketplace to find a new supplier for wholesale food ingredients.
• Connect with verified vendors: No more worrying about shady suppliers or unreliable deliveries. These platforms pre-vet their vendors, so you can connect with confidence and build long-term partnerships you can rely on.
• Negotiate better deals: Request quotes from multiple suppliers to negotiate the best possible prices and terms.
• Streamline procurement: Manage orders, track shipments, and handle invoicing all in one place, improving efficiency and reducing paperwork.
• Access financing options: Need a little extra cash flow to make that big purchase? Some platforms offer financing options to help you manage your expenses and keep your business running smoothly.

Examples of supplier-oriented e-marketplaces include Alibaba, Thomasnet, and IndustryNet.

Horizontal and vertical marketplaces in e-commerce

Want to sell your handmade jewelry or vintage finds? Or maybe you're targeting businesses with industrial equipment? The type of marketplace you choose matters.

Vertical marketplaces focus on a specific niche or industry, bringing together passionate buyers and sellers who share a common interest. This means you'll be connecting with a highly targeted audience already interested in what you offer.

Some popular examples of vertical marketplaces include:

• Etsy: The go-to destination for handmade and vintage treasures.
• TrueFacet: A haven for luxury watch enthusiasts and jewelry connoisseurs.
• Grailed: The ultimate online hangout for streetwear fans and fashion lovers.

A horizontal marketplace, on the other hand, offers a wide range of products across multiple industries, similar to shopping at the mall or a department store. Naturally, a business that sells products that appeal to a wide range of users is more likely to reach more customers here than in a horizontal marketplace.

Some horizontal marketplaces include Amazon, eBay, and Walmart Marketplace, which is a growing platform where you can offer your products alongside Walmart's own inventory.

Independent e-marketplace

Imagine having the freedom and control of your own online store, but without the headaches of building a website, setting up payment processing, and driving traffic.

Independent e-marketplaces are run by third-party providers who offer a ready-made space to showcase and sell your products. Unlike giants like Amazon and Walmart, independent marketplaces don’t sell their own products, meaning they’re not competing with you for sales. This often translates to better visibility for your listings and a more level playing field.

Some examples include Bonanza (for artists, crafters, and those selling vintage or one-of-a-kind goods) and Ruby Lane (a marketplace specializing in antiques and vintage collectibles).

Here’s who could benefit most from independent e-marketplaces:

• Small businesses and startups: These platforms offer a cost-effective way to start selling online without the upfront investment of building a website.
• Artists and craftspeople: These platforms often have a strong community vibe and attract shoppers who are specifically seeking unique, handcrafted treasures.
• Businesses seeking less competition: Tired of getting lost in the sea of sellers on Amazon? Independent marketplaces offer a more intimate and less competitive environment where your products can truly shine.

How to choose an online marketplace for a business

Not all online marketplace platforms are right for all businesses — the perfect one will ultimately depend on your business, industry, audience, and overall business strategy.

Here’s what to consider when comparing and choosing a platform:

• Target audience. Make sure their audience aligns with your target audience, including where the platform is most used, the demographics of who shops there, and the language they speak.
• Product/platform fit. Check to see if the online marketplace is somewhere people will think to go to look for your product. For example, if you sell specialty medical equipment, then it likely doesn't make sense to list on a vertical marketplace that focuses on auto supplies.
• Features. Look into the features that the platform provides to both buyers and sellers. For buyers, is the site easy to use, navigate, and check out? If not, frustrated shoppers will abandon their carts and go elsewhere. For sellers, look at how easy it is to list products, manage listings, track sales, manage communications with customers, market products, and access funds.
• Fees. Platforms make money by charging a fee or commissions for listing and selling products, not to mention additional fees for services like preferred placement, shipping, inventory management, and marketing. Some platforms charge more than others, impacting your overall profitability.
• Customer service. A negative customer experience like a damaged order can reflect as poorly on your brand as it does the platform’s, making it important to research the customer service and support offered by the marketplace. In addition, look into the support the marketplace provides sellers in case you have issues with your listings or sales.
• Payment options. Find a platform that offers the payment options your specific audience prefers, such as alternative payment methods or pay later options. This can help you capture additional sales from customers who have strong payment preferences or require payment flexibility.

Online marketplace checklist for businesses

Ready to start selling? Before you list your first product, make sure you've got all your ducks in a row with this essential online marketplace checklist:

• Get your business basics sorted: It’s tempting to skip the basics, but you’ll want to officially register your business and ensure you have all the necessary licenses and tax IDs. Don't forget to open a separate bank account for your business — it'll save you a headache come tax season.
• Create your social media accounts: Even if you're mainly selling on a marketplace, having a simple website or social media presence can make you look more professional and give customers another way to connect with you.
• Capture stunning product photography: Remember, online shoppers can't touch your products, so your photos need to do the talking. Invest in high-quality images that show off your items from all angles — consider hiring a pro or learning some DIY photography tricks.
• Write compelling product descriptions: Your descriptions are your sales pitch, so make them clear, concise, and packed with juicy details that highlight what makes your products special.
• Familiarize yourself with marketplace policies: Each marketplace has its own set of rules and guidelines. Knowing the ins and outs will save you from any surprises down the road.
• Price your products strategically: Research what your competitors are charging and factor in your costs and profit margins. Don't undersell yourself, but also make sure your prices are attractive to buyers.
• Prepare your inventory and shipping strategy: Make sure you have enough stock on hand to keep up with those orders and a solid shipping plan in place. Think about shipping costs, packaging, and delivery times to give your customers the best possible experience.
• Promote your marketplace store: Once your marketplace store is up and running, it’s time to spread the word. Use social media, email marketing, content marketing, or any other creative ways to get those customers flooding in.

How to get new marketplace customers

You've chosen the perfect online marketplace platform, stocked your digital shelves with amazing products, but the sales still aren’t rolling in. This is more common than you think — attracting those first customers (and keeping them coming back for more) can be tricky, given how competitive online marketplace platforms are.

Use these tips to attract new marketplace customers:

• Wow them with irresistible product listings: Think of your listings as your digital storefront. Use stunning, high-quality images, write captivating descriptions that highlight the unique benefits of your products, and make sure your prices are competitive.
• Amplify your reach with marketplace advertising: Sponsored product listings can help you get your products to the top of search results. Alternatively, create eye-catching display ads that target your ideal customer.
• Invest in fantastic customer service: Try to respond to all questions with lightning speed, encourage happy customers to rave about your products in reviews, and always go the extra mile to resolve any issues. Building a loyal following starts with amazing service.
• Spread the word beyond the marketplace: Don't just rely on the online marketplace platform to bring in customers. Start promoting on social platforms like Instagram and Facebook, create engaging content like blog posts or videos, and build an email list to share exclusive offers and keep customers coming back for more.
• Analyze your performance regularly: Keep a close eye on your sales data to see what's working and what's not. From there, try to figure out where your customers are coming from and fine-tune your marketing efforts.