Why marketplaces are the future of ecommerce—and how you can stay competitive

In 2023, Walmart’s U.S. ecommerce business surged by 24%, driven largely by its marketplace growth. What was once a side channel has now become a primary engine for digital retail. This isn't an isolated phenomenon. Industry giants like Nordstrom, Best Buy, and healthcare giant Henry Schein have all embraced marketplace models.

Brands of every size are being impacted by the prevalence of both B2C and B2B marketplaces. Keeping up with competitors requires a sophisticated marketplace growth strategy that integrates content, fulfillment, data and customer experience.

In the following sections, we’ll explore why marketplaces are winning, the risks brands must navigate and how you can position yourself for long-term marketplace success.

The two marketplace models: B2C vs. B2B (and why it matters)

Not all marketplaces are created equal. To design a channel strategy that aligns with your brand goals, you must first understand the two core models:

1. B2C marketplaces

Think Amazon, eBay, Etsy, Walmart. These are massive consumer-facing platforms where brands can reach millions of high-intent shoppers. These platforms have fundamentally altered consumer shopping behavior, creating ecosystems where comparison shopping, reviews, and one-click purchasing define the customer journey. In 2024, marketplaces were also the primary source for starting to search for products online worldwide. 

These platforms are ideal for:

• D2C brands expanding into mass retail without losing control of fulfillment
• Product discovery and testing across new customer segments

2. B2B marketplaces

Platforms like Alibaba, Faire, and Handshake (acquired by Shopify) cater to wholesale buyers, retailers and procurement teams. These marketplaces streamline traditionally complex supply chain relationships which reduces friction in business purchasing decisions and opening new channels for brands to connect with business buyers.

These are best suited for:

• Expanding into retail partnerships and bulk orders
• Launching new products through curated networks
• Building a global footprint without establishing physical infrastructure

The distinction matters because each marketplace type requires different strategic approaches, resources and performance metrics.

Why marketplaces are dominating ecommerce

Market centralization isn't just about what consumers want; it's also powered by built-in advantages behind businesses that keep them ahead. The following are reasons why these platforms are capturing an ever-larger share of ecommerce transactions:

1. Instant access to high-intent audiences

Shoppers arrive on marketplaces ready to buy. Brands benefit from massive organic and paid traffic. Amazon alone hosts over 300 million active customer accounts globally—a ready audience that no single brand could hope to capture independently.

2. Global reach without border friction

Marketplaces enable seamless cross-border selling. A US-based brand can list on eBay and start shipping to European customers without establishing local entities, navigating complex tax structures or building regional warehousing. This democratization of global commerce creates opportunities for brands of all sizes to test international markets with minimal investment.

3. Built-in trust and social proof

Customer reviews, buyer protection policies and robust return processes lower the friction of first-time purchases. For consumers, this reduces perceived risk when purchasing from unfamiliar sellers.

4. Optimized mobile-first UX

Leading marketplaces invest millions in optimizing the customer journey. With mobile making up over 70% of ecommerce traffic, these platforms offer smooth, hassle-free experiences—from mobile-first designs to fast checkouts and smart, AI-driven recommendations—that most brands would struggle to build on their own.

5. Scalable infrastructure without capital expenditure

Marketplaces allow brands to test new products, expand into adjacent categories or scale rapidly during peak seasons, all without the infrastructure overhaul such moves would typically require.

6. Actionable data and insights

Modern marketplace platforms function as sophisticated commercial intelligence systems. Amazon's Brand Analytics, Walmart's Supplier Center and similar tools provide unprecedented visibility into consumer behavior and competitive positioning.

The risks brands must navigate on marketplaces

Despite the benefits, marketplaces are complex and competitive ecosystems. You must proactively manage the following risks:

Margin pressure and commoditization

The highly competitive nature of marketplaces can lead to price-based competition that erodes margins. Without careful positioning, brands risk becoming commoditized, competing solely on price rather than value proposition.

Platform dependency

Building significant business on any single marketplace creates vulnerability to platform changes. Alterations to terms, commission structures or unprecedented listing suppressions, item takedowns and account suspensions can significantly impact sales.

Algorithm vulnerability

Marketplace visibility is largely algorithm-driven. Changes to ranking factors can cause dramatic fluctuations in product visibility and sales.

Fee structures

Marketplace commission structures, advertising costs, and fulfillment fees can significantly impact your whole business. Additionally, top tier brands are entering the marketplace space at scale, driving up advertising costs across the board. Without careful analysis and ongoing optimization, profitability can deteriorate despite strong top-line growth.

Global competition

International sellers can undercut pricing or offer faster delivery through regional hubs. This global competitive set can intensify pricing pressure and requires brands to clearly articulate their unique value.

How you can stay competitive on marketplaces

Winning on marketplaces requires more than showing up. It demands a deliberate, cross-functional approach. 

1. Listing optimization as a growth lever

Marketplace success begins with visibility. 

• Systematic mapping of high-volume, low-competition terms into product titles and backend search terms, refreshed quarterly based on trend analysis
• Regular audits of top-performing competitors to identify patterns in successful content structure
• Adaptable strategies for winning with AI shopping assistants

2. Leverage retail media & promotions

Retail media is one of the fastest-growing ad channels and essential for visibility. You can approach these platforms with the same strategic rigor as your broader digital marketing efforts:

• Coordinate retail media campaigns with off-platform advertising to create mutually reinforcing visibility
• Make use of Sponsored Products, search ads and seasonal promotions
• Use platform data to reallocate spend toward high-performing products

3. Operational excellence through fulfillment

Fulfillment capabilities have become a critical competitive differentiator as marketplace algorithms increasingly prioritize delivery speed and reliability. 

• Use Fulfillment by Amazon, Walmart Fulfillment Services or a best-in-class 3PL to ensure fast, reliable delivery
• Maintain relationships with multiple last-mile carriers to ensure continuity during peak seasons

4. Protect your brand integrity

Despite marketplace constraints, significant opportunities exist for brand differentiation through enhanced content experiences.

• Implementing rich A+ content, video assets and comparison charts to showcase product superiority
• Create branded storefronts in the marketplace platforms to drive navigation and brand experience
• Utilize the platforms' bundling algorithms to encourage multi-product purchases

5. Use data strategically

Turn marketplace analytics into insight. Identify top-performing products, replicate success in other channels and double down where margins are strongest.

• Track competitive pricing strategies, promotion calendars and inventory positions
• Mine review content for product improvement opportunities and refinements

6. Prepare for global scale

Don’t just think local. Use marketplaces as launchpads for cross-border commerce, especially in high-growth emerging markets.

• Choose marketplaces with international reach and logistics support
• Ensure packaging and product compliance
• Consider regulatory, tax and localization strategies upfront

7. Diversify your channel strategy

Marketplaces should complement, not replace, your owned D2C channels. Use them to drive customer acquisition and then convert buyers into brand loyalists on owned channels. The two channels should work together from media to assortment for a strong customer experience. 

Ready to compete and win on marketplaces with Cart.com?

Cart.com's team specializes in marketplace excellence. With expertise across different marketplaces, we help brands elevate their presence without sacrificing identity, margin or long-term vision. Let’s make your brand the one customers choose first—and remember. Contact our team today to learn more.