What Is a Marketplace?
A marketplace is an ecommerce platform that hosts multiple independent sellers, allowing buyers to discover, compare, and purchase products from different vendors in a single session.
Unlike a standalone online store where one business sells its own products, a marketplace aggregates supply from many sellers and earns revenue by taking a commission on each transaction, charging listing fees, or selling advertising placements within the platform itself.
The most widely used marketplace models are the business-to-consumer (B2C) model, where brands sell directly to shoppers (Takealot and Amazon are prime examples), and the peer-to-peer (P2P) model, where individuals sell to other individuals (Facebook Marketplace and Gumtree operate this way in South Africa).
Hybrid models also exist, where the marketplace operator sells its own products alongside third-party sellers, competing on the same platform it hosts. This structure creates a complicated dynamic for independent sellers who must price competitively against the very platform they rely on for traffic.
From a digital marketing perspective, marketplaces are powerful because of network effects: the more sellers list products, the more buyers are attracted by selection; the more buyers visit, the more incentive sellers have to list.
This self-reinforcing loop gives established marketplaces a significant advantage over new entrants. For South African sellers, Takealot draws tens of millions of visits per month and has built a level of consumer trust that a new independent store would take years to develop organically.
Listing on such a platform gives an immediate audience, which is especially valuable for businesses without existing brand recognition.
Marketplace cost structure: Commission per sale (typically 5% to 15% of the selling price, depending on category) + optional fulfilment and storage fees + sponsored listing spend to boost visibility = total cost of marketplace selling per order.
For brands with an existing presence, marketplaces serve as an additional conversion funnel rather than a replacement for their own store. Shoppers often begin product research on a marketplace and then visit the brand's own website before making a final decision.
Understanding this behaviour helps sellers decide how to allocate budget between marketplace advertising (such as Takealot sponsored listings or Amazon Sponsored Products) and their own paid media via Shopping Ads through Google.
A well-optimised product feed is critical in both environments, since the quality and completeness of your product data directly influences whether your listings appear prominently in search results on the marketplace and in Google Shopping.
Marketplace In Practice
Consider a Johannesburg-based homeware brand that manufactures locally and wants to grow online revenue. Rather than depending entirely on its own website, which requires sustained SEO and paid media investment to generate traffic, the brand lists its top-selling product lines on Takealot.
Within weeks the products begin appearing in category searches and benefit from Takealot's own promotional activity such as the Black Friday deals page and the Daily Deals feature.
The brand monitors its conversion rate per listing, tests product titles and images to improve click-through rates, and invests in sponsored placements for its highest-margin products.
Over time it uses the marketplace sales data to identify which products perform best, informing decisions about what to develop next and what to feature prominently in its own online store.
The two channels reinforce each other rather than compete: the marketplace delivers volume and discovery, while the brand's own site captures repeat buyers through email marketing, higher margins, and a richer brand experience.
A common mistake South African sellers make when entering a marketplace is treating it as a passive listing exercise. Marketplace success requires active management of listing quality, competitive pricing, review generation, and advertising investment.
Sellers who optimise their listings with complete specifications, keyword-rich titles, and high-resolution images consistently outsell those who rely on basic information.
Tracking metrics such as Average Order Value (AOV) and Customer Lifetime Value across both the marketplace and your own store helps you understand the true profitability of each channel and decide where to focus growth effort.
The most successful multi-channel retailers use their marketplace data to fuel their own store strategy, running retargeting campaigns to bring past marketplace buyers back to their own site where margins are higher and the customer relationship is fully owned.
FAQ
What are the main costs of selling on a marketplace in South Africa?
South African marketplace sellers typically pay a commission of between 5% and 15% per sale, depending on the category and platform. Takealot, for example, charges category-based commission plus fulfilment fees if you use their warehouse. Additional costs include listing fees on some platforms, sponsored product advertising to improve visibility, and VAT obligations once you exceed the R1 million registration threshold.
Should a South African business sell on a marketplace or build its own online store?
Both channels serve different purposes and the most effective strategy usually combines them. A marketplace gives immediate access to an existing audience and builds trust quickly, but you pay commission on every sale and have limited control over the customer relationship.
Your own online store builds brand equity, lets you own customer data, and improves long-term profitability through repeat purchases and email marketing.