Pick your side : three types of marketplaces

There are probably as many types of marketplaces as there are business models. There are also probably nearly as many classifications. They do, however, have one thing in common: the revenue involved is huge, often scaling to hundreds of millions of dollars.

We find one helpful classification is into three main types by purpose: transactional marketplaces, process and matching marketplaces, and communities. Each type has different strategic goals, network sizes, underlying technologies and objects traded or exchanged.

B2C marketplaces have grown and evolved to such an extent that there are now several different sub-types and sub-marketplaces. Many B2B marketplaces also now have sublevel marketplaces, such as eBay’s private personalized Store (these are described as private subspaces in the table below). These sub-marketplaces are more concentrated circles of exchanges. They may have increased registration or certification requirements to reduce the number of participants, or a reduced set of goods or services.

Access to marketplaces ranges from completely open and visible, to authenticated invitation-only access, with all variations in between, including tiered or certified access. There is some variation between the three types, with clear characteristics for each (see table).

There are many examples of marketplaces, but to pick out just a few, you might think of:

  • A distributor’s transactional website with a vendor-specific hub;
  • A large company’s digital procurement center; and
  • A freeware code exchange hub.

For channel leaders, the three types of marketplace usually serve different purposes in their partnership management strategy. They can generally be considered as tools in channel programs. Some of the benefits include tighter process integration with configuration and pricing in pre-sales, a smoother purchase experience including electronic data exchange (EDI) connections, knowledge transfer, community-building, and being able to go beyond the partner portal for document management.

When comparing and benchmarking different marketplaces, it is important to assess them against their own strategic purposes, and the potential of the full network. A full evaluation must be at strategic, tactical and operational levels, and against multiple criteria, including reach, relevance, revenue, return and real ease of use.

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