I have been hearing term market places in different contexts. Most of time I am not sure whether speaker has been to real physical market place.
A physical marketplace is location earmarked for buyers and sellers to come at specific times of week and perform commerce transaction. A marketplace is different from a market. You see markets in Bangalore which are permanent structures for which seller pays monthly rent. This forces seller to be present mostly every day and across entire day awaiting the buyer to arrive and purchase.
NLC offered a place for small farmers with limited shelter to bring their farm produce and sell them to NLC employees, attracted to purchase fresh vegetables & fruits. Marketplace functions only on few weekdays( Tuesday, Thursday and Sunday) in different town corners.Farmer paid a daily fixed rent to use roofed facility(small sum) and open areas were offered free. NLC facilitated supply-demand equation to enable commerce between small farmers(seller) and their employees(buyer), creating a physical marketplace. Salient feature of the working of marketplace(santhai) are
- Seller and Buyer are at Santhai for few week days attracted by competitive prices, low overhead & convenience to get fresh produce.
- One can touch and feel the vegetable or fruit prior to purchase. Both seller and buyer negotiate prices
- There was no concept of home delivery. One needs to be present in person to buy or sell.
- Direct transaction between seller & buyer, reduces prices. To add.
- No commission per transaction to NLC.
- No tax or no invoice for purchase- mostly fruits & vegetables.
- There is element of negotiation. I missed to learn from my father.
- NLC neither funded sellers to come to santhai and nor gave discounts to buyers to arrive at santhai.
At marketplace(santhai), economics of supply demand is working between buyer and seller.More demand & less supply of products increase product price. Less demand and more supply results in downward spiral of prices.
In a place like Trichy, there is morning market (Kalai Santhai) in front on my parent’s place. Works similar to santhai of Neyveli and the physical market place is owned by merchant association. No home delivery, no commission based on transaction and small fixed rent.
In physical market place, you are undoubtedly the customer for the seller and there are no other customers.The market place facilitates both seller and buyer on equal terms. The facilitation is done not to make money and neither funded by VCs.
Beyond convenience promised & issues of home delivery faced, it would be good to understand how similar are eCommerce websites to market place. Are folks using term marketplace from marketing perspective?