Question

Describe the significance of an e-marketplace. Cite an example of a common e-marketplace.

Answer 1

Solution

E- Marketplace
E-market place is a virtual online market platform where companies can register as buyers and sellers to conduct business to business transactions over the internet. The use of the internet has helped remove intermediaries in a transaction. It is a web based information system which provides opportunities for both suppliers and buyers.
Significance
It enables the buyers to compare various products and services by different measures like performance, quality, price etc. Buyers get access to a broader range of products and services. On the other hand the sellers can reach the customers more conveniently and affordably. Sellers gets to enter new markets, find new buyers and increase sales by generating more value for the buyers.
The cost of the customers is reduced significantly as they can access the information about various alternatives and choose the best that suits their needs.
• It can impose higher switching cost on the buyers and sellers.
• It provides economies of scale and scope.
• Different buyers and suppliers can work in collaboration to reap larger benefits from each other.
Example: Amazon
Amazon is among the best online marketplaces for sellers worldwide. Third-party vendors add products, which are then included into site inventory. Once a consumer decides to make a purchase, a vendor is liable for filling the order.