Marketplace

A marketplace is a venue or platform that enables buyers and sellers to discover each other, negotiate terms, and execute transactions. Marketplaces reduce transaction costs by aggregating supply and demand and providing services such as search, payment processing, and dispute resolution. They are often described as two-sided or multi-sided platforms where value grows with the number of participants, creating network effects that improve liquidity and price transparency.

Types include physical marketplaces like street markets or shopping malls; and digital marketplaces, including online consumer marketplaces (Amazon Marketplace, eBay), B2B marketplaces (Alibaba), freelance marketplaces (Upwork), and on-demand service platforms (Uber, Airbnb). Many platforms combine elements of both.

Common features include product listings, search and filtering, ratings and reviews, secure payment, escrow or buyer protection, logistics and fulfillment, and mechanisms for ratings, dispute resolution, and seller onboarding. Revenue typically comes from commissions, listing or subscription fees, and value-added services such as advertising or fulfillment.

Economically, marketplaces can improve allocative efficiency by matching buyers with sellers efficiently, increasing price transparency, and enabling competition. They rely on trust, reputation systems, data analytics, and sometimes fulfillment infrastructure. Network effects occur when more participants attract more users, enhancing liquidity but potentially raising entry barriers for newcomers.

Governance and regulation cover consumer protection, antitrust considerations, data privacy, IP enforcement, and counterfeit goods. Historical marketplaces evolved from physical agoras to digital platforms; contemporary examples include Amazon Marketplace, eBay, Alibaba, Etsy, Upwork, Uber, and Airbnb.