Online marketplaces are bubbling with opportunity, but they come with trade-offs. From Amazon and Walmart to TikTok Shop and Target Plus, this guide unpacks the strategic pros and cons so you can decide if marketplace selling aligns with your brand goals.
What is an Online Marketplace?
An online marketplace is a digital space where multiple sellers can list and sell their products to customers within a single platform. These online platforms act as middlemen between buyers and sellers, offering convenience, baked-in audiences, and seamless transactions. Shoppers love marketplaces for the variety, speed, and trusted payment options. Sellers love them for the potential scale and operational support.
Well-known examples include Amazon, Walmart Marketplace, Etsy, and eBay—each catering to slightly different types of customers and products. Some marketplaces even offer tasty services like payment processing, warehousing, fulfillment, and customer support, making them especially appealing to lean or scaling teams.
But for brands? The real decision isn’t whether marketplaces are popular; it’s whether they’re strategically right for your business.
Types of Marketplaces
Understanding how marketplaces are structured can help you decide which model works best for your goals. They typically differ in two main ways: who they serve and what they sell.
From a buyer-seller perspective, marketplaces can be business-to-consumer (B2C), business-to-business (B2B), or consumer-to-consumer (C2C). B2C marketplaces—like Amazon and Walmart—are most common for DTC brands, offering access to millions of individual shoppers. B2B platforms such as Alibaba, on the other hand, are great for bulk orders and wholesale relationships. C2C marketplaces like eBay or Facebook Marketplace allow individual users to sell to one another, often for used or secondhand goods.
They also differ by product type and breadth. Vertical marketplaces specialize in a niche—such as Reverb for music gear or StockX for sneakers—while horizontal marketplaces offer a wide range of product categories, from electronics to groceries to apparel. Some marketplace platforms operate globally, while others focus on regional or national markets.
eCommerce Platform vs Marketplace: What’s the Difference?
If you're already selling through a Shopify or WooCommerce storefront, you might be wondering: What's the real inside scoop between that and joining a marketplace?
Running your eCommerce store means you control nearly everything: branding, design, pricing, customer relationships, and user experience. You're layering ideas to create a space that feels uniquely yours, and you own the customer data that comes with it. That kind of control is the icing on top of building loyalty, long-term growth, and brand identity.
Marketplaces, on the other hand, offer built-in traffic and infrastructure but less autonomy. You're essentially renting a space within someone else’s ecosystem, playing by their rules and often fighting for visibility among hundreds (if not thousands) of other sellers.
The trade-off is simple: platforms offer control, and marketplaces offer reach.
The Case for Marketplaces: Why Brands Say Yes
For brands hungry for scale—or looking to meet potential customers where they’re already filling their carts—online marketplaces can be a powerful growth lever . When served up right, they can help you rise faster.
Let’s take two of the biggest slices of the marketplace pie: Amazon and Walmart. Amazon now has 180 million Prime members in the U.S.—and they’re not just browsing. These shoppers are loyal, highly engaged, and ready to spend. Meanwhile, Walmart Marketplace has seen rapid growth, drawing over 100 million unique monthly visitors, thanks to expanded product categories, multichannel tools, and new omnichannel features for sellers. Together, they accounted for nearly 40% of all U.S. eCommerce transactions in 2024. That’s some serious traffic—hot, fresh, and ready to convert!
Ultimately, the icing on top is trust. Shoppers feel confident buying through these platforms. They’ve already got their credit cards stored, their addresses saved, and their expectations set for free shipping and lightning-fast delivery. Programs like Prime and Walmart Plus don’t just sweeten the deal—they’ve trained customers to check out without hesitation.
Need help keeping your operations from burning out? Marketplaces have you covered there, too. Services like FBA (Fulfillment by Amazon) and WFS (Walmart Fulfillment Services) handle the heavy lifting by packing, shipping, returns, and even some customer service. For lean teams, it’s like having a sous-chef you don’t have to manage.
Platforms like TikTok Shop are blurring the line between content and commerce, turning scrolls into sales in seconds. If your brand thrives on creative, snackable content or influencer partnerships, this is where you can whip up serious buzz. Meanwhile, Shopify’s Shop App is rising quietly but quickly as a go-to for mobile-first shoppers—kind of like that local bakery everyone in the know is obsessed with.
And for brands with premium positioning? Target Plus might be your cherry on top. It’s an invite-only marketplace, which means you’re not just another product on the shelf—you’re part of a carefully curated experience. Getting into Target Plus doesn’t just increase visibility; it serves up a "stamp of approval" that builds credibility and strengthens brand trust.
In short, the marketplace world offers a buffet of opportunity, but like any great recipe, the ingredients have to align. When they do? It’s a sweet spot worth savoring.
When Marketplaces Don’t Make Sense
But marketplaces aren’t magic. There are solid reasons some brands stay off them—or try and later pull back.
First, you give up a lot of control. When a customer buys from you on Amazon or TikTok Shop, you may never get their email. You might not control the way your brand is displayed or how returns are handled.
And here’s where things can get a little sticky: if something goes wrong, it’s your reputation that takes the hit, not the marketplace’s. You might be doing everything right behind the scenes, but if the frosting melts before it gets to the customer, guess who gets the bad review? You. Not the platform hosting your products.
That loss of control over the customer experience can leave a bad taste—and unfortunately, it’s your brand left holding the box.
Second, the competition is intense. Especially post-pandemic, when countless brands and resellers rushed into the same platforms, standing out has become a pay-to-play game. Organic visibility is tough, and running ads on marketplaces can eat into your margins fast.
And speaking of margins—fees stack up! Most marketplaces charge a mix of referral fees (a cut of each sale), commission fees, transaction fees, monthly subscriptions, and ad spend. While your top-line sales may grow, your bottom line can take a serious hit if you’re not careful.
Top 10 Online Marketplaces to Know in 2025
Here’s a quick breakdown of the biggest and most popular marketplaces shaping eCommerce right now:
- Amazon Marketplace: Still the most dominant force in U.S. eCommerce. Offers massive scale and mature fulfillment services.
- Walmart Marketplace: Strong in household, grocery, and value categories. Gaining ground fast among everyday shoppers.
- TikTok Shop: Rising star in social commerce. Great for brands with video-savvy content and influencer reach.
- eBay: Solid for resale, collectibles, refurbished goods, and auction-style listings.
- Target Plus: Invite-only and curated—ideal for premium or mid-tier brands seeking high brand alignment.
- Etsy: Best for handmade, unique, or vintage products with strong community appeal.
- Shop App by Shopify: Shopify-powered mobile marketplace. Great for indie and DTC brands with repeat buyers.
- Alibaba: Dominant B2B marketplace with global manufacturing and wholesale connections.
- Facebook Marketplace: C2C-focused but expanding in small business and local commerce.
- Zalando: Europe’s fashion-forward marketplace—ideal for apparel brands looking to go international.
Should You Add a Marketplace to Your Business Model?
It all comes down to your goals. If you're looking to boost visibility fast, eCommerce marketplaces can deliver. But if your brand lives and breathes customer experience, personalization, and long-term loyalty, sticking with your own storefront might make more sense.
The good news? You don’t have to choose! Many brands are adopting hybrid strategies—building deep relationships on their own DTC site while also tapping into marketplace audiences for exposure and growth. The key is to treat marketplaces as a channel, not a crutch.
Need help mixing the right ingredients? The CAKE team can help you evaluate your options and tailor a strategy that supports your margins, brand goals, and future growth.
FAQs
What is the Best Online Marketplace?
It depends on your goals. Amazon is great for scale, Target Plus for brand trust, and TikTok Shop for trend-savvy sales.
What is a Key Characteristic of a Marketplace Business Model?
Shared infrastructure. Sellers operate within a platform managed by a third party, benefiting from shared traffic, tools, and trust.
What is Marketplace Strategy?
It’s a plan for where, how, and why you sell on third-party platforms. It considers margins, fulfillment, customer data, and positioning.
Is Amazon an eCommerce or Marketplace?
Both. Amazon sells its own products (eCommerce) and hosts millions of third-party sellers (Marketplace).
So, What’s the Verdict?
Marketplaces aren’t a shortcut—they’re a tool in your growth. For some brands, they’re the secret ingredient that takes things from good to chef’s kiss. For others, they can water down the brand flavor or chip away at those hard-earned margins. Like any good recipe, it’s all about using the right tools at the right time for the right reasons.
Still wondering if marketplaces are the missing piece of your eComm mix or just extra frosting you don’t need? Let’s figure it out together. The CAKE team is here to help you slice through the noise, navigate the marketplace maze, and build a strategy that feeds your bottom line.
