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What is a Virtual Marketplace?
A virtual marketplace is where products and services are traded within a higher-level data network, typically the internet. The manifestation of e-commerce is based on information systems that handle, coordinate and support one or more phases of a market transaction. The stages differ from communication (such as supplying information on pricing) to complete the processing of a transaction, which includes the payment process and aspects of fulfilment (including invoicing, picking and shipping). The operator of said marketplaces combines supply and demand together and ensures market transparency for numerous of the participating players.
Benefits of a Virtual Marketplace
Virtual marketplaces enhance market transparency and reduce information asymmetries by providing and evaluating information or by interactively contributing to its generation. This information allows market participants to buy or sell goods and services regardless of their location, enabling transactions across regions and even international borders. Key information includes not only the properties of goods and services but also pricing details and customer reviews or testimonials. However, the dynamic pricing models commonly used in these marketplaces can reduce transparency. Many marketplaces facilitate coordinated pricing, allowing purchases to be made directly through the platform. These marketplaces typically lower transaction costs compared to conventional methods and generally offer open access to all potential participants, provided they meet the legal requirements, such as being of legal age or qualifying as a business entity.
