Technology teams often build the wrong types of marketplace.
The reason for this is that technology teams don’t have a good understanding of what type of marketplace the business is looking to develop.
In this article, we break down the different types of marketplace platforms that you can build and explain what the primary differences are between each of the different types.
What are the different types of marketplace?
It’s important to know which type of marketplace you’re going to develop.
This is because each different type of marketplace requires its own unique set of features and has its own different playbook on how to launch and scale.
The graphic below explains what the different types of marketplace platforms are. This diagram has been designed for founders and businesses to figure out which type of marketplace they are going to develop. All of these different types of marketplace are consider a type of online marketplace.
On the left hand side there are three categories of online marketplace:
- C2C (Consumer to consumer) marketplaces – also known as peer to peer marketplaces
- B2C (Business to consumer) marketplaces
- B2B (Business to business) marketplaces
Running down the centre of the diagram we have three types of marketplace:
Understanding different types of marketplace
Each different type of marketplace has a different set of characteristics which are shown below.
As we shall see later on in this article, these characteristics have a big impact on how the marketplace is developed. For instance, B2C marketplaces typically anticipate that businesses selling to individual consumers will have lower order quantities compared to B2B marketplaces. As such, B2C marketplaces should be designed to promote frequent transactions by implementing designing a smoother transaction flow.
What is a C2C marketplace platform?
A C2C marketplace platform, also known as a peer-to-peer marketplace platform, is a digital platform that facilitates direct transactions between individual users, allowing them to buy, sell, or rent goods and services to each other.
C2C platforms can be either product, service, or rental marketplaces. Examples of C2C marketplace platforms include.
- C2C product marketplaces are analogous to traditional flea markets or garage sales, where individuals can buy and sell goods directly to other individuals. Examples include the product marketplace Etsy.
- C2C rental marketplace can be thought of like word-of-mouth referrals, where individuals can rent out their properties or belongings directly to other individuals. Examples include the rental marketplace Airbnb.
- C2C service marketplaces are like traditional local service directories or bulletin boards, where individuals can offer services directly to other individuals in their community. Examples include the service marketplace TaskRabbit.
C2C marketplaces’ primary benefit for sellers is that they provide a digital space where sellers can advertise their products or services to consumers. Meanwhile consumers are able to access a wide variety of offerings directly from other individuals, often at competitive prices or for unique services not found in traditional retail settings.
What is a B2C marketplace platform?
A business to consumer or B2C marketplace platform is a type of online marketplace that connects businesses directly to consumers. In this model, businesses are able to sell products or services directly to individual consumers.
B2C marketplaces typically anticipate that businesses selling to individual consumers will have low order quantities. Because of this, B2C marketplaces are designed to promote frequent transactions. This is achieved by prioritizing user-friendly interfaces and designing a straightforward transaction flow.
B2C marketplace platforms can be either product, service or rental marketplaces. Examples of B2C marketplaces include,
- B2C product marketplaces are like traditional retail stores or shopping malls, where businesses sell products directly to individual consumers. Examples include platforms like Amazon.
- B2C rental marketplace are analogous to traditional classified ads, where businesses would advertise to rent out their properties or belongings directly to other individuals. Examples include marketplaces like Rent-the-runway.
- B2C service marketplaces can be thought of like traditional local service directories, where businesses can offer services directly to other individuals in their community. Examples include service marketplaces like Thumbtack.
What is a B2B marketplace platform?
A business to business or B2B marketplace platform is a digital platform that connects two different businesses together, allowing them to buy and sell goods or services from one another.
B2B marketplaces typically anticipate that businesses selling to individual customers will have high order quantities or require specialized products or services tailored to business needs. These marketplaces thus focus on facilitating bulk purchases, negotiations, and long-term partnerships between businesses. To accomplish this, they offer features such as bulk pricing, customizable solutions, and streamlined procurement processes to meet the specific requirements of B2B transactions.
B2B marketplace platforms can be either product, service or rental marketplaces.
- B2B product marketplaces are like traditional wholesale markets or trade shows, where businesses buy and sell products in bulk to other businesses for resale or manufacturing purposes.
- B2B rental marketplaces are similar to traditional equipment rental agencies or leasing companies, where businesses can rent machinery, vehicles, or equipment for temporary use.
- B2B service marketplaces are analogous to traditional business service directories or consulting firms, where businesses can access a wide range of services such as consulting, marketing, IT support, or logistics solutions tailored to their specific needs.
Examples of different types of marketplace?
In this section we take a look at some examples of different types of marketplace platforms. These include:
- C2C marketplace platforms:
- B2C marketplace platforms:
- B2B marketplace platforms:
Etsy. A C2C marketplace platform for products
Etsy is primarily considered a C2C marketplace platform. This is because it has been designed to support individual sellers, often artisans, crafters, and small businesses, to list and sell handmade or vintage items directly to consumers.
While Etsy does have some B2C elements such as, Etsy Wholesale for sellers to connect with businesses, and Etsy Payments which support B2C transactions, the core model resolves around enabling peer to peer marketplace transactions amongst individual sellers and consumers. This makes Etsy a predominantly C2C marketplace.
TaskRabbit. A C2C marketplace platform for services.
TaskRabbit allows individual consumers to post the tasks or services they need assistance with, such as furniture assembly, home cleaning, moving assistance, or handyman work.
Individual service providers (taskers), then bid on these tasks and provide the requested services directly to the consumer.
TaskRabbit is a C2C marketplace because it facilitates transactions between individual consumers and service providers.
Learn how to build a service marketplace like TaskRabbit.
Airbnb. A C2C marketplace platform for rentals
Airbnb allows individual property owners (hosts) to list and rent out their homes, apartments, spare rooms, or other accommodations directly to other individual travellers (guests). Therefore, Airbnb operates as a C2C rental marketplace by facilitating peer-to-peer transactions between individuals seeking accommodations and individuals offering them.
Amazon. A B2C marketplace platform for products
Amazon is primarily a B2C marketplace platform that connects businesses (sellers) directly with consumers (buyers). This model enables businesses of all sizes to reach a vast audience of sellers worldwide.
Although Amazon is primarily a B2C marketplace platform it also incorporates elements of a C2C marketplace platform where individual sellers can list their products to other customers. Amazon’s marketplace is therefore considered a hybrid marketplace where sellers can be both businesses and individuals.
Thumbtack. A B2C marketplace platform for services
An example of a service based B2C marketplace platform is Thumbtack. Thumbtack is a marketplace that connects local service professionals and businesses offering services such as home improvement with individuals. This makes Thumbtack a B2C marketplace.
Rent the Runway. A B2C marketplace platform for rentals
Rent the Runway is an example of a rental based B2C marketplace platform. This is because the marketplace connects individual consumers with businesses who rent them designer clothing and accessories.
Alibaba. A B2B marketplace for products
Alibaba is primarily a product based B2B marketplace. The e-commerce platform connects businesses with suppliers and manufacturers worldwide. It facilitates transactions between businesses, allowing them to buy and sell goods in bulk for resale or manufacturing purposes. Although Alibaba does include some B2C features through its AliExpress platform where individual consumers can purchase goods directly from sellers, its main focus and revenue source come from serving businesses rather than individual consumers.
Upwork. A B2B marketplace for services
Upwork is a B2B service marketplace that connects businesses with freelancers offering various services such as web development, graphic design, writing, marketing, and more.
While individual consumers can potentially use Upwork to hire freelancers for personal projects, its primary focus and revenue source come from serving businesses rather than individual consumers. Therefore, Upwork is categorized as a B2B service marketplace.
KWIPPED. A B2B marketplace for rentals
KWIPPED is a B2B equipment rental and leasing marketplace with thousands of items available to rent or finance from a global network of suppliers. The platform was designed to streamline the equipment rental process for businesses across various industries, offering them access to a wide range of equipment options, flexible rental terms, and competitive pricing.
Conclusion: Building the right type of marketplace
At this point, you should have a good idea about the type of marketplace you want to build.
Developing a marketplace is hard. It requires deep technical, product and sales experience. However, knowing which type of marketplace you’re developing can help enormously.
Another thing that can make things easier is to use a specialist marketplace technology or a no code marketplace builder. Marketplace technologies and no code marketplace builders both come with marketplace templates that you can configure in order to build different types of marketplace.
A marketplace template can no only save you hundreds of thousands in custom development costs, it also bring with it thousands of hours of product engineering, expertise and options for maintenance and support.
At Dittofi we have our own no code marketplace templates. We combine these solutions with our hybrid no code platform to help you build a marketplace 10x faster, without coding. Once you’ve finished developing your marketplace Dittofi then transforms your visual designs into simple, secure and efficient code that you can either deploy in one click or hand off to developers.
If you would like to discuss how you can use Dittofi to build a marketplace, schedule a call with our team.
If we hear from you… great… and if not… happy building!
Become a Marketplace Insider
Join our inner circle for exclusive insights, coveted trade secrets, and unparalleled strategies – your journey to marketplace dominance begins here.