Marketplace and Dropshipping, what are they and main differences

What are the main differences between Marketplace and Dropshipping?

For a few years now, online sales have been gaining prominence in the commercial world. From large multinationals that base their sales through the online market, to traditional businesses that have had to adapt to this environment. This has caused a change in the paradigm of trade in general, creating business opportunities, new strategies or even innovative processes to increase the volume of sales.

Within the online world, there are several alternatives to carry out the strategies set by companies. In this article we will talk about two in particular: the Marketplace and Dropshipping. The first is perhaps the best known of all thanks to the influence that platforms such as Amazon or AliExpress have had, and the second offers more autonomy on the part of the seller, as well as lower spending when investing.

But before comparing and evaluating the concepts of marketplace and dropshipping, we must know what we are talking about.

What is a marketplace?

A Marketplace is a digital sales platform that brings together a large number of companies and buyers from all over the world. A kind of online shopping mall. As we have said before, giants like Amazon or AliExpress are part of this model.

A marketplace is the ideal alternative for businesses that do not have a website or virtual store and it is also an easy way to start internationalizing a brand, given that the reach of the internet is global.

One of the peculiarities of this model is that each company can design its own store within the Marketplace. Put the logo, the distribution of the products, their descriptions, etc.

The process to start selling in Marketplaces is simple: first you must register and post your catalog in the store, presenting the products and setting the price or payment methods, among others. Later, when managing the logistics, you can choose whether the seller himself is in charge, or the platform itself to facilitate the process and save time.

The importance of digital marketing within marketplaces

These platforms also offer us marketing tools to promote the brand and thus achieve more traffic or sales: from advertising to more general promotions.

It is also important to attend to the recommendations that each Marketplace gives us to achieve a good positioning on the same platform.

Each portal is a new world, but they all revolve around a single common benefit: success in selling.

What is dropshipping?

Dropshipping is a more independent business model, which is based on a user starting to sell products without stock.

How is this explained?

The Dropshipping brand is an intermediary that is usually associated with a seller.

The Dropshipping process is simple: the brand designs a web page where it offers the products of the seller with which it is associated. Once a sale is made from the web, it will buy the product from the seller, who will take care of the shipment.

Hence, it is about selling products without stock, because the one who makes the sale is a mere intermediary between the buyer and the seller (who is the one who has stock).

What does the Dropshipping model offer?

The dropshipping model allows you to obtain benefits without first making a large investment by not needing a large amount of stock in warehouses since it operates without stock. This then translates into saving time and money when it comes to managing shipping logistics. It also gives more freedom when it comes to setting prices and customizing the brand image.

One of the drawbacks of Dropshipping is that, by depending on the supplier for both stock and shipments, it can create problems with delivery time or returns. For this, it is necessary to make it clear on the web that these aspects do not depend on the intermediary, but on the provider itself.

The importance of communication in Dropshipping

Communication in Dropshipping is essential.

Since the Dropshipping model is based on a new website that sells products without stock and not on a platform with thousands of products and buyers, making yourself known is vital to start having sales. Therefore, applying SEO and digital marketing tools is vital to position yourself among other digital markets.

Conclusions of the Marketplace and Dropshipping model

Once having analyzed these two ways to do business online, it can be concluded that each one has its advantages and disadvantages, although it all depends on the business in question, the tools used, the timings, etc.

For example, E-Commerce experts recommend Dropshipping for companies formed by a single person, with a younger profile, who start selling products after having analyzed the market and found a niche.

On the other hand, Marketplaces are more frequented by consolidated companies that want to increase their profits from other platforms due to the ease they have when working with real stock or defined targets.

Do you need help to start selling on digital platforms?

At Década Studio we are aware of the importance for different businesses to be present in the largest online storefronts worldwide. Above all, when this presence translates into increased sales, expansion into new markets, minimal infrastructure and operating costs, and much more.

For this reason, we offer comprehensive management of the entire sales process so that you can get the most out of online sales.

Especially in the king of Marketplaces: Amazon. Since after hours invested in training and knowledge we have become one of the few agencies in Spain cataloged as Official Amazon Partners.

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