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Chapter 2  Marketplace analysis for e‑commerce

While traditional marketplaces have a physical location, an  Internet‑  based market has no 

physical presence – it is a virtual marketplace. Rayport and Sviokla (1996) used this distinc‑

tion to coin a new term: 

electronic marketplace

. This has implications for the way in which 

the relationships between the different actors in the marketplace occur.

The new electronic marketplace has many alternative virtual locations where an organi‑

sation needs to position itself to communicate and sell to its customers. Managers need to 

understand the relative importance of different types of sites and consumer and business inter‑

actions and information flows. In this section we will review how marketplace channel struc‑

tures, the location of trading and multichannel marketing models can be assessed to inform 

digital business strategy. Finally, we will review commercial arrangements for transactions.