When you think of online marketplaces, chances are good you immediately think of Amazon, and probably eBay. You might also think of Walmart. However, the truth is that there are multiple options out there that allow you to build success by selling products through a pre-existing platform that already has customer traffic.

Still, not all of those marketplaces operate in the same way. Some may be good fits for your needs, but others might crimp your success. You need to understand the differences in the many marketplaces today in order to make an informed decision and build your success as an online seller.

Are You Merely Filler?

One of the first things to consider when comparing the different marketplaces out there is if you will be an integral part of the marketplace, or if the merchant (the platform/marketplace owner and operator) will merely use you as filler. This is actually more common than you might think, particularly in UK marketplaces like the soon to be defunct Halfords.

In these instances, the marketplace was set up primarily to sell the merchant’s own products. Other sellers were invited in, but only if they could offer products that fit between those offered by the merchant. In essence, they were being used as filler to fluff up the product options available to customers only.

What Limitations Are There?

Some marketplaces have stringent limitations, while others are considerably more limited. For instance, compare Amazon with Halfords. Almost anyone can sell on Amazon, but Halfords was an invitation-only platform. There are other examples of limitations that a marketplace operator might impose that could make life difficult for you, such as not allowing you to sell certain product types, products from manufacturers in specific countries, or not allowing you full freedom to price your products as you want.

Open or Closed?

Another important consideration when comparing the various online marketplaces is whether the ones on your list are open or closed. If you’re not familiar with this, it requires a little bit of explanation.

Amazon is a great example of an open marketplace. Anyone can sell products, and those products can be almost anything, even if it is something that Amazon itself sells. In short, Amazon welcomes all comers, including potential competitors. In theory, you could offer the same product as Amazon. If your prices were better, then it would be possible for you to outsell Amazon. The company has no problem with that – your success is their success.

A closed marketplace is the exact opposite. You are not allowed to sell any products that might compete with what the marketplace operator sells. They do not invite in competition, and they generally only want to bring in sellers who have something that can complement what they currently offer. Of course, the marketplace might not be quite that restrictive. You could have the freedom to choose the type of product you want, but find that the marketplace operator will only allow you to sell those products from a specific list of manufacturers.

Choosing Your Options

Given the complexity surrounding online marketplaces today, how do you go about choosing the path forward? Both closed and open marketplaces can work for your needs, but you need to go into the comparison with your eyes open. Make sure you know whether a marketplace is really just a disguised drop shipping business operated by the merchant, or if it is an open and free marketplace that welcomes competitors to the merchant (like Amazon). It also pays to know your own goals – do you want to sell a product that complements what a merchant offers, or do you want to be a competitor in your own right?