Differences Between An Online Store & Marketplace Model

Maybe you have an online business already or you’re thinking of starting one. You might even be shifting from one model to another. Whichever it is, marketplace models and eCommerce stores are both very popular and each has its own pros and cons. 

Sprintlaw can help you set up a business with either of these models and recently assisted My Baker structure their operations to ensure they were best positioned for rapid growth. We think it went as smooth as butter (if we do say so ourselves). As well as learning about the key differences, in this article you’ll be hearing from Mark Sinjakli, CEO of My Baker on how Sprintlaw was able to assist in the process and his experience of how it all went.

The first attraction to working with Sprintlaw was the price, which was between a third and a quarter of the quote I received from a mid-sized legal firm, But regardless of affordability, I wasn’t going to pay for or accept poor advice

What’s The Main Difference Between An Online Store vs Marketplace Model? 

Online Store: This is typically your regular online eCommerce website. It is usually one seller who is providing a product or service through a digital platform. 

Marketplace: Unlike an online store, a marketplace is a platform business connecting  buyers to multiple sellers. 

What’s An Online Store? 

Stores that sell their products online are eCommerce stores or businesses.

For example, Amazon.com is one of the most popular online stores in the eCommerce industry. A plethora of emerging actors, like another one of our clients Karma Bites, integrate the functionality of an online store into their broader brand website. In 2014, it was estimated that there were around 20 million online stores worldwide.

If you’re hoping to start an eCommerce business, most of your activities and information will be stored and shared online. As we know, the online world carries lots of risks, whether it be data breaches or access to customer information. So, one of the first things you should be thinking about is how to manage your legals and protect your business online. Whether it be drafting your T&C’s or registering an international trade mark, Sprintlaw has a team of experienced lawyers who are ready to help you out. 

Your lawyer was insightful and well-informed in all relevant aspects of the law, as you’d expect from a fully qualified lawyer, but also commercial and able to give sensible, measured, and practical advice.

Sprintlaw helped me to understand the legal risks and how to ensure we are adequately protected, but also balanced that with commercial concerns.

What’s A Marketplace? 

Simply put, a marketplace is a place where multiple suppliers can list their services and products. Customers, whether businesses or individual consumers, can search for products from these various sellers, and pay the marketplace for the products they buy. The marketplace then passes the money generated from the sale, minus a commission. 

Marketplaces will generally focus on a particular type of product and enable large volumes of traffic to sellers in said niche category. Like eCommerce stores, marketplaces are generally easy to set up and, with the right contracts in place on both the supply and demand side, require minimal effort to run. 

You can read about building a successful online marketplace here. 

The Takeaway…

Marketplace platforms and online stores have both become powerful models within the digital economy. With the right strategy, your site can generate sizable and sustainable revenue streams. Both options have pros and cons, so how do you decide which model is right for your business idea? 

An online e-commerce store is suited to sole vendors who want to sell their own inventory of products exclusively to their niche audience. An online marketplace, on the other hand, focuses on matching multiple buyers and sellers of goods and services. The marketplace owner administers a digital shopping mall with sellers taking care of their own inventory.

Building a marketplace platform is an entirely different proposition to an online store. An online marketplace connects the two sides of the platform for a fee, while an online store focuses on the trading itself. 

Experienced entrepreneurs understand that the key to business success is experimentation, flexibility, and a strong support network of advisers to guide your evolving business model. That’s where our at team at Sprintlaw can help to talk through some of the considerations above and come away… well let’s let Mark of MyBaker say it:

I am now utterly convinced that I’ve made the right decision in engaging Sprintlaw; you will be my “go-to” advisers for all things legal.

Your business model is fantastic. I have long felt that there was a gap in the market for this service – affordable, quality commercial legal advice without paying for the prestigious city office, the all-staff annual conference, and the partners’ luxury lifestyles!

I’m going to recommend you to anyone who may find your services relevant, and engage you for a follow-up piece of work shortly.

Thanks again Sprintlaw!

Mark Sinjakli, CEO of My Baker

Need Help?

If you have any business legal help, feel free to reach out to [email protected] or call us on +44(0)2034321860. 

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