Rise of the Marketplaces: Predictions for the future

by | Dec 20, 2017

Now that e-commerce is a way of life for most people, and Amazon has become one of the biggest retailers in the world, marketplaces are popular alternative channels for retailers who want to increase their sales. Marketplaces are also useful for vendors who want to sell directly to customers, as well as test the viability of new products before they fully introduce them to their retail customers.

As the marketplace for marketplaces continues to grow, we’re seeing some interesting developments happen on the landscape. Here’s a look at how marketplaces have evolved and how they may continue to change in the future

More niche marketplaces

The Amazon Marketplace is the 800 pound gorilla in the marketplace space, but there are plenty of little marketplaces that fill the long-tail niches for their specialty audience. Marketplaces like Etsy, which is geared toward artists who want their own retail store; Mom365, a professional newborn photography studio and parenting resource; or the new Toys”R”Us marketplace announced for 2018 (which may or may not compete with the joint Toys”R”Us/eBay marketplace). These are all examples of niche marketplaces already available to vendors and consumers.

If you can identify a hobby, niche, or specialty retail product line, you can undoubtedly find an online marketplace to support it, even if it’s only taking up a small space on Amazon or eBay.

More service-related marketplaces

Rover.com is a dog care service marketplace that appeals to people who need dog sitters and dog walkers (or people who want to work as dog sitters and dog walkers). TakeLessons.com connects people with instructors to learn a variety of skills and topics like singing, musical performance, acting, test prep, and language skills. Care.com lets people work as home caregivers and babysitters for families who need some assistance at home. Even Flexe.com is a warehouse services marketplace that allows companies to purchase short-term warehousing or rent your extra space and resources out. (It’s like Airbnb for warehouses).

While these may not be technically “marketplaces” because they don’t sell products, they are service marketplaces that have sprung up to fill a particular need for a small, targeted audience. This shatters the idea that marketplaces are just a place to sell “things”.

Stricter marketplace requirements

The larger marketplaces like Amazon and Walmart are enforcing stricter requirements as a way to ensure more uniform and timely expectations. There are rules about inventory, fulfillment windows, shipping costs, deliverability, and even returns and chargebacks.

These sellers’ rules are there to protect consumers as well as the marketplace brand. It pays to read all the fine print and have mechanisms in place to address most of the rules you could run afoul of. Also, you can also start out at smaller independent marketplaces that will let you figure out your new systems and learn how to play in the marketplace space before jumping into the biggest arenas.

Voice-shopping marketplaces

Of course, Amazon with it’s Echo and Dot voice-search and voice-shopping devices are probably the most well-known right now, Google is trying to give Amazon a run for its money in that realm. For more than a year now, stats have shown that more than half of all searches for shopping to make a purchase now happen directly on Amazon.com – fewer than half of searches to find a product to buy are now happening on Google or other search engines. Of course, Google won’t stand for that without a fight, so they’ve created their own “retailer marketplace” of sorts for voice-based shopping that includes some of the biggest retailers people love, including Target and Walmart. The Google partnership has only recently gone into overdrive, so this competition for voice-search shopping marketplaces will surely heat up in the new year.

International online marketplaces

More marketplaces are becoming available to the United States, as well as other countries. Just this month, Amazon officially made its entrance on to the scene in Australia. Amazon also already offers items from international suppliers on its marketplace. Alibaba Tmall is huge and getting stronger, with a growing presence in the United States. Wish.com is also a growing marketplace with users and suppliers from China, South America, United Kingdom, Europe and more. With all of this criss-crossing in deliveries, international shipping rates could possibly go down. The fact that an ocean exists between a seller and a customer who wants to buy matters less and less.

At SPS Commerce, we think 2018 is going to usher in some exciting changes in the retail marketplace industry, which will have a major impact on how the multi-channel/omnichannel retail world evolves. If you would like to learn how to use marketplaces to your advantage, whether retailer or supplier, please visit the SPS website for additional information or to speak to one of our specialized marketplace experts.

Connect to Amazon Marketplace or a marketplace you choose.

Connect to Amazon Marketplace or a marketplace you choose.

Marketplaces are great for both retailers and vendors to sell products directly to customers.

Trent Riter

Trent Riter

Product Manager- Fulfillment at SPS Commerce
Trent directs the ongoing development of strategic partner integrations to the SPS Commerce platform. His experience spans the retail supply chain, helping partners connect to the SPS Retail Network of retailers, distributers, 3PLs and manufacturers.
Trent Riter

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