„Real“ Online Marketplace vs. Dropshipping

In the last blog post we had described the main reasons why online marketplaces fail. The distribution of tasks and roles along the value chain of an online marketplace business and thus the design of the business processes as well as the definition of the business model have direct implications for these reasons and thus the success of an online marketplace.

If you look at (successful and less successful) online marketplace business models, you will find a wide variety of variations. In some cases even business models are referred to as online marketplace, which are at least in the narrower / literal sense, no marketplaces and at best have "marketplace character". Categorization is therefore not easy due to the variety. However, two main groups can be identified into which many of the business models referred to as online marketplace can at least roughly be classified:

  • „Real“ Online Marketplace and
  • Dropshipping „Marketplace“

The essential distinguishing feature is the question of who the contractual partners are in the case of a sale / purchase contract:

  • „Real“ Online Marketplace   Purchase contract between customer and vendor
    (the marketplace itself is not directly involved with with sale)
  • Dropshipping „Marketplace“  Purchase contract between customer and dropshipper
    (the vendor is legally / formally not involved with the sale, but only regarding fulfillment / shipment.)

What looks like a trifle at first glance, however, has far-reaching consequences in reality. The decision for one or the other of the two variants comes with restrictions and effects on legal, business and also strategic questions.

What Is Better, Online Marketplace Or Dropshipping?

Which of the two variants is the better can not be answered generally. A successful online business can be realized with both, a "real" online marketplace and with a dropshipping model. Here, in each case, a careful analysis and consideration of the respective advantages and disadvantages is always necessary to find the right path. In fact, however, we often see that in online marketplace projects, at least in the early stages, the significance and importance of this decision is not clear. Not infrequently, limitations that come with a decision for either direction are often overlooked or underestimated.

Online Marketplace Or Dropshipping?

To illustrate the differences, our
Infographic Online Marketplace vs. Dropshipping  
shows a comparison of typical tasks and role distributions for different topics in the value chain in both business models.

Of course, we would also like to support you with our experience from numerous marketplace and dropshipping projects so that you too can find the best model for your project.
With our Online Marketplace Software „JaJuMa-Market“ you are definitely well prepared for the different scenarios, both "real" online marketplace and dropshipping.

If you have any questions, suggestions or interest in JaJuMa-Market, please contact us!

Infographic: „Real“ Online Marketplace vs. Dropshipping - enlarge