Etsy, eBay, Indiamart Business Models – Short Comparison
Choosing a correct marketplace business model is rather a complicated task. There are no rights or wrongs in this matter but rather a combination of factors that allows you to optimize your digital marketplace and make it as profitable as possible. Here are some examples of different types of business models that have been created to solve different tasks, exist in various parts of the world and yet function successfully bringing constant income to their creators.
Indiamart Business Model
Source: IndiaMart
Indiamart Business Model is the most successful B2B marketplace business model in the region. It successfully connects over 1.5 million Indian suppliers with global buyers. More than 10 mln buyers monthly vision Indiamart and generate $1-billion worth of B2B sales annually.
Indiamart is based on a combination of various types of business models offering flexibility and proper management to both suppliers and buyers.
1. Subscription Business Model. Basic marketplace business model that includes the following offers:
1.1. Listing Fees: Indiamart charges certain fees for listing products on its marketplace. In exchange suppliers receive a comfortable business microsite to work with.
1.2. Business Leads: as a big marketplace platform, Indiamart provides potential customers to the business owner that have great interest in a particular type of product offered by the seller.
1.3. Buy-Leads: a tender based marketplace business model where buyers post the product they are looking for and sellers bid to win the tender.
1.4. Virtual EPBX: Indiamart provides a virtual number (VoIP) with multiple lines customers can ring on.
2. Transaction Fee Revenue Model is based on charging a certain percentage whenever a transaction is made.
3. Subscription Fee is one of the most popular options an Indiamart Business Model can offer. By paying a monthly fee seller receives a marketplace package that allows posting, promoting, offering products on Indiamart.
4. B2B Marketplace Commission is a separate option for selling and buying industrial products where IndiaMart receives a commission for the sale amount.
eBay Business Model
Source: eBay
eBay is one of the most popular online marketplaces and offers a simple way of interaction between the seller and the buyer. Unlike lots of other marketplaces, the eBay business model does not imply storing products and instead directs the order directly to the seller. As a result, you, as a customer, receive:
- Large Product Catalogue
- Fast Delivery
- Automated Order Tracking
- Advanced Return Policy
As a seller, you also receive:
- Global marketplace business model
- Global Customers
- Efficient marketing and distribution channel
eBay business model is a combination of two types of business models: listing fee and commission-based ones. It is also a great example of an international marketplace open for buyers and sellers from all around the globe.
Etsy Business Model
Source: Etsy
Etsy business model has chosen a vertical platform model by confining itself to selling only craft items in various categories. Etsy business model took the best of eBay business model but transformed it into a more specific based marketplace. A lot like eBay, Etsy’s business model does not imply storing products but connects buyers and sellers providing a comfortable marketplace to buy/sell art.
Etsy business model managed to become a successful marketplace thanks to combining various types of business models.
- Etsy uses listing fee business model and charges $0.20 per listing;
- Combined with the listing fees, commission-based business model charges fixed 3.5% of the product listed;
- Advertising business model allows sellers to promote their product in order to increase potential sales.
By narrowing the target audience, Etsy business model managed to become successful and gained popularity among artists and art enthusiasts who seek special, one of a kind pieces.
When compared, Etsy, eBay, and Indiamart Business Models appear to have different purposes. While Indiamart is mostly a b2b targeted marketplace, eBay and Etsy aim their sales on regular customers. Though, the difference between the last two lies in the nature of the products offered: eBay is a global marketplace targeting global audience while Etsy business model is built around craft and handmade products and is oriented on people who search for unique items.
Choosing a marketplace business model certainly depends on the core products that have to be sold and potential buyers, should it be a solo customer or a global company.
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