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Online Marketplaces Open New Opportunities for Retailers

In the second quarter of 2021, more than half (56%) of all sales on Amazon were from third-party sellers. Other retailers are taking notice, launching their own third-party online marketplaces to take advantage of the growing opportunity. For example, in February of 2019, Target introduced Target+, an online marketplace for home items, toys, electronics and sporting goods. Best Buy’s new offering, Best Buy Marketplace, boasts hundreds of products beyond Best Buy’s own brands.

Many new third-party marketplaces are emerging in the retail space. Much like a virtual shopping mall, online marketplaces offer third-party sellers their own “store” within the site. Customers can easily move between these stores to find the products they need and can shop not only by brand but by product type, category, and other search features. Fulfillment is completed through the online marketplace, making it convenient and easy for both the customer and the vendor.

How disruptive is the marketplace trend exactly? It goes far beyond large U.S. retailers like Target, Amazon, and Best Buy. According to Digital Commerce 360, global sales from top online marketplaces including Alibaba, Tmall and Taobao were more than $2.62 trillion in 2020. The same survey reported that online marketplace sales were responsible for more than 60% of all retail sales worldwide last year. Top online marketplaces in the U.S. grew by 40 or even 100% in 2020 as well.

Online marketplaces like eBay and Amazon have been around since the mid-1990’s, with others like Etsy and Zappos jumping in the game in the mid 2000’s. As technology has evolved, smaller retailers have also been able to create their own online marketplaces. Many of them like, now part of PetSmart, target unique customer segments with products and ecommerce capabilities specifically suited to the needs and preferences of those audiences. The explosive marketplace trend isn’t limited to consumer shopping, either. B2B marketplaces are on the rise, and there are platforms like Canal designed for DTC brands to sell products from suppliers with a similar ethos.

Advantages of Online Marketplaces

As a seller, online marketplaces can help you capture revenue opportunities in new markets with established and growing brands. But there’s more to it than that. Online marketplaces offer numerous benefits and opportunities to retailers including:

Low Cost of Entry

Rather than absorbing the cost of building a new eCommerce site, or expanding an existing site to meet growing needs, online marketplaces offer a relatively inexpensive way to “set up shop” without exorbitant marketing or operational costs.

Ease and Speed of Setup

Creating a space within an online marketplace is fast and easy. Plus, being part of a larger online marketplace structure means you’ll have lower ongoing maintenance costs.


Online marketplaces allow brands to easily grow and scale. The backbone of any strong marketplace is robust eCommerce functionality. From search to shipping, a marketplace is built to handle high transaction volumes.

Vendor Profitability

As the number of digital commerce sites continues to grow, it has become harder for vendors to become profitable on their own. Selling through online marketplaces can help lower your overhead costs and boost profitability quickly.

Personalization and Data Management

Retailers can exchange data with online marketplaces and grow revenue by offering the channels and capabilities those customers want and need.

New Audiences

Retailers can find new audiences due to the broader reach of top online marketplaces. Online marketplaces have sophisticated external and internal promotion engines that can easily and rapidly introduce your brand to an entirely new group of customers.

Customer Experiences

To succeed, online marketplaces must offer a robust customer experience with capabilities like hybrid customer support, sophisticated mobile platforms, and competitive fulfillment options. Third-party sellers receive all the benefits of a 360-degree customer experience without incurring the cost of building or maintaining it.

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B2B Online Marketplaces on the Rise

Consumer retail online marketplaces aren’t the only kind of marketplaces experiencing hyper-growth. Studies report that B2B marketplaces will account for 30% of all global online B2B sales by 2024.

Along with the B2B marketplaces of Amazon and Alibaba, many online marketplaces are catering to the unique needs of B2B customers. The complex pricing, contracts, and ordering requirements of B2B commerce can make designing brand-specific eCommerce sites an expensive endeavor. However, just like consumer marketplaces, B2B marketplaces offer scalability, data management, and customer services capabilities for third-party vendors to support and grow their businesses.

Avtex Can Significantly Boost Your Online Marketplace Presence

Once you have Dynamics 365 implemented in your company, you will be able to take full advantage of third-party marketplaces by exchanging data and coordinating fulfillment. We’re well suited to help you leverage technologies like Dataverse, Microsoft Azure, Microsoft Power Platform, and Dynamics 365 F&O to take your commerce practice to new heights.

Meet your customers where they're at and build your commerce practice in just 2-4 months.

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