Types Of Marketplaces

There are three types of marketplaces:
1- vertical marketplace
2- horizontal marketplace 
3- global marketplace

1 – vertical marketplace
A vertical marketplace sells products from many sources but they are all of one type. For example, TrueFacet.com sells only jewelry and related products. The site does the important job of guaranteeing authenticity and because jewelry is such a high-ticket item, that’s an important value-add. I recently met Tirath Kamdar, the Founder and CEO of TrueFacet, at a conference called ShopTalk, which bills itself as ‘the nextgen commerce event’ for retailers. Kamdar believes TrueFacet is ‘creating the VIN of the jewelry industry.’ By giving each piece of jewelry a unique identifier when it’s listed on the site, TrueFacet adds value by verifying the authenticity of a product.

vertical marketplace

2 – horizontal marketplace
A horizontal marketplace sells products of many types but they all share a characteristic. For example, Panjo,  another presenter at Shoptalk, is a marketplace for enthusiasts. According to Chad Billmyer, Panjo’s CEO, ‘belly dancer enthusiasts behave the same as Porsche enthusiasts.’ By providing community, infrastructure and data, Billmyer believes Panjo will drive traffic for people to pursue their passions and buy and sell from each other at the same time.

horizontal marketplace

3 – global marketplace
A global marketplace sells everything. The ultimate example of that is eBay. (Full disclosure: I’m an avid eBay shopper. As I write this article, I am wearing this suit available from Saks for $3895 plus tax. I bought it new with tags on eBay for $1100.75. Most of what I wear is a similar story. I have bought and sold five cars on ebay and hundreds of other items, all at great values and with very little grief or frustration.) eBay has 167 million users, over 1 billion items for sale, more than 80% of the items are new, and this year will sell almost $90 billion worth of product. Their appeal is their breadth of product. Bob Kupbens, VP of Seller Experience at eBay, said at Shoptalk, ‘scale gets you transparent pricing,’ if there are enough things being bought and sold, users can see what a fair price should be and they feel like they’re getting the right value. Kupbens also pointed out that an environment like eBay, ‘polices itself because there’s a community of people in a more efficient marketplace.’

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