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Advantages of the Marketplace model vs. Inventory model for E-commerce


July 7, 2022
5 MIN READ
Vinculum
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Vinculum
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The e-commerce business model has been in the market for a long time and has drastically changed the retail marketplace’s operation. With the hike in sales, the offline and online modes of e-commerce business models are fetching the eye of a massive crowd significantly.

The Inventory management system involves inventory management software to keep track of the in and out of stock precisely.

Let’s understand each of these models briefly for the growth of the business in an advent way.

Marketplace Business Model

They are also concerned regarding the virtual environment of the e-commerce platform. The e-commerce business model comes out as a facilitator in terms of buyer and seller to maintain the transparency and efficiency of the workflow. In such a business model, they follow a zero-inventory policy. The inventory is in the hand of the sellers, the customer asks for the same from sellers, and the e-commerce business model handles the logistics.

Inventory Model

In such models, the marketplace like Amazon gets the inventory from sellers and brands and gets it in their warehouse. The e-commerce buys merchandise and sells to a massive crowd, and the logistics to get involved in every aspect of the e-commerce business model.

Five benefits for the e-commerce marketplace to choosing a marketplace business model of inventory are jotted below:

Capital Utilization with utmost efficiency

Capital management means the proper flow of cash and the business’s growth in a full-fledged way. E-commerce always comes with a capital-incentive idea with substantial storage spaces and management of inventory, warehouse, and logistics of the products in a magnificent way. The marketplace model shares the burden with the individual supplier to make the decision more efficiently and effectively.

The marketplaces look into the logistic process significantly, whereas sellers handle the inventory to manage the supply chain of the stuff in the right way.

  • Scalable

With the advent of new technology solutions like Increff WMS, the seller comes on the screen with multiple sales funnels to manage the inventory prominently. The sellers can access immense inventory visibility, margins, sales, and cash flow without segmenting the channel in a broader perspective.

The latest technology works in real-time to get the order placed from any channel, and the stock gets deducted from the store to manage the inventory visibility more broadly. Such a process helps eliminate the excess charges to be piled up even during the peak time of the sales.

The robust technology interacts with the millions of servers now and then with no delay in the process to sync with it easily. With the SaaS technology solutions, infrastructure management is low in terms of sellers, and the tech provider looks at updates and maintenance.

  • Gathering of customer data

Sellers get complete data regarding the customer purchasing along with their personal information. All such data needed to keep in a safe and secured way to get rid of any fraud. With effective warehouse management comes faster order fulfillment services. The region-wise demand for the products is analyzed to satisfy customer satisfaction and provide customer-oriented services. Even the customer service is considered for the steady process to flow diversely.

  • Wider reach 

The sellers have a well-established network with the individuals or brand managers to capitalize on the costs in the marketplaces to reach the broader range of cloud. Even they have a good connection with the third-party logistics to manage the efficiency of the service appropriately.

  • Investor-friendly

Marketplace establishes the platform to flourish the business is an excellent way along with the sales and reducing the returns of the products for a genuine cause with the hike in the brand loyalty.

Solutions to resolve the marketplace model for sellers and brands

  • WMS comes out with 100% accuracy to manage the process efficiently to handle inventory management.
  • Sellers look into the standardized data to perform the marketplace service to flow the work process. WMS comes out with a single platform concept to manage the sales funnel significantly.
  • Real-time inventory management comes out with the concept of syncing the features to manage the marketplace in a significant way. The inventory is controlled and updated regularly to provide a better customer experience.
  • The tech solutions lead the way in a gigantic way to manage the millions of interactions among the seller and the marketplace to run the process in a magnificent way to avoid the glitches.

The e-commerce platform works effortlessly for the growth of the business in a juggernaut way to manage the scalability and inventory visibility appropriately.

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