Most likely you have heard of open marketplaces such as eBay, Amazon, and Alibaba, but you have not heard of closed e-commerce marketplaces such as Zalando, Bol, Otto, LaRedoute, and Cdisconcert.
Open marketplaces have a large traffic of visits, but also have more competition, because all companies and even individuals can register accounts on these sites, as there is no screening of brands. Because there is no screening of companies on open marketplaces, companies are required to participate in race to zero, meaning that competition on open marketplaces is determined by price, not product quality. So, for example, on open marketplaces, you are required to compete with counterparties and individuals who sell used items;
On open marketplaces customers come to buy the cheapest goods, while on closed marketplaces customers come to buy the highest quality and are willing to overpay for the brand.
Open marketplaces have a large traffic of visits, but also have more competition, because all companies and even individuals can register accounts on these sites, as there is no screening of brands. Because there is no screening of companies on open marketplaces, companies are required to participate in race to zero, meaning that competition on open marketplaces is determined by price, not product quality. So, for example, on open marketplaces, you are required to compete with counterparties and individuals who sell used items;
On open marketplaces customers come to buy the cheapest goods, while on closed marketplaces customers come to buy the highest quality and are willing to overpay for the brand.