Back to Glossary

Vertical Marketplace

What Is Vertical Marketplace?

Vertical marketplaces are special types of markets where all players, including businesses and customers, are unified around a specific niche. Sellers in this setting usually cater to the needs of clients within that niche and don’t branch out to serve broader target audiences.

What Is The Difference Between Vertical And Horizontal Marketplace?

Unlike a vertical market, horizontal marketplaces target a broader customer base in different segments of the economy. Typically, these market settings sell literally everything that is in demand, from software products to tangible items.

Here are the differences between these two marketplaces.

Vertical Marketplace

  • Businesses focus on one industry niche;
  • Minimal target audience;
  • Marketing strategies focus on one direction;
  • Specialization defines competition.

Horizontal Marketplace

  • Businesses target diverse industries;
  • Broader target audience;
  • Multifaceted marketing and advertising strategies;
  • Economies of scale define competition.

How Does Vertical Marketplace Work?

A vertical marketing system technically works to the benefit of the vendor in question, given that they target specific audiences with tailored campaigns. The fact that this system includes players with unifying characteristics doesn’t mean that there is a limited number of customers to serve.

In this approach, consumers usually have higher bargaining power, given that businesses typically rely on a narrow set of customers that they serve.

What Are The Advantages Of A Vertical Market?

For potential business owners that aren’t sure about adopting a vertical or horizontal marketplace, the first option comes with various benefits you wouldn’t want to overlook. These advantages include:

  • Greater profits at low operating costs when it comes to marketing and advertising;
  • In-depth insights into product performance to determine whether your marketing strategies are paying off;
  • The system works with all mainstream marketing channels, such as television and print media.

What Are Success Factors For Vertical Market?

Here are some of the factors that will help you create a successful company vertical marketplace:

  • Identification of a lucrative niche with unfulfilled customer needs;
  • Becoming an industry expert on a specific niche;
  • In-depth research on the competition to know how the market works;
  • Geographical expansion to diversify revenue streams.

Frequently Asked Questions About Vertical Marketplace

What are 3 types of marketplaces?

They include:

  • Business-to-business (B2B);
  • Business-to-consumer (B2C);
  • Peer-to-peer (P2P).

What is an example of a successful vertical marketplace?

A successful vertical eCommerce marketplace is Uber, that solely targets online customers that want to move from one place to another across all leading cities in the world.

What are disadvantages of vertical marketplace?

The disadvantages of this marketplace system include:

  • Limited customer reach due to focus on a specific niche;
  • It takes longer to generate sufficient sales—new players may be out of business before they know it;
  • Some niche trends shift dramatically, alongside the clientele.

View Other Terms

PIM Demo What To Ask
10 min read
Product Information Management

TOP Questions To Ask Before PIM Solution Demo: A Guide For Brands And Retailers

Struggling with the questions before going on the PIM tool demo? We prepared a full guide for brands, retailers, and big marketplaces to better explore a PIM solution.

Read more
Product Data Mappings
9 min read
Product Data Syndication

Product Data Mapping In eCommerce: Purpose And Techniques

Effective data management is essential for any business. Learn about the role of data mapping in eCommerce and boost your sales today.

Read more
Effective Content
11 min read
Product Information Management

Product Content That Matters: Solving Retailer And Brand Dilemma

Learn how to manage product content expectations of brands and retailers to improve the shopping experience and boost sales.

Read more
BMEcat For DIY
6 min read
Product Information Management

BMEcat Data Standard For DIY Industry

BMEcat doesn’t make sense? Find out what this standard is, why it is beneficial to your DIY business, and how you can implement it.

Read more
Product Experience vs Customer Experience
11 min read
Product Experience Management

Product Experience And Customer Experience: On The Way To Buyer Satisfaction

Find out the difference about product experience and customer experience and learn how to build a loyal customer base with the help of the PIM system.

Read more
What Is The Future Of PIM?
7 min read
Product Information Management

The Future Of PIM Solutions: More PXM Capabilities

Up-to-date eCommerce calls for high-end tools. Learn how PIM solutions evolve today to set the stage for streamlined digital business.

Read more
eCommerce Tech Stack
10 min read
eCommerce Strategy

eCommerce Technology Stack: Retail VS Manufacturer Tech Instruments

How to build a perfectly fitting eCommerce technology stack for retail or manufacturing purposes? Here is a cheat sheet with relevant tools and pro tips.

Read more
What Is eCommerce Ecosystem?
10 min read
eCommerce Strategy

How To Build A Successful eCommerce Ecosystem & Partnerships

In order to grow, it is important for a business to have a single platform for all market participants. Learn how to build an eCommerce ecosystem for a sharp competitive edge.

Read more
What Are Top Product Data Challenges For eCommerce?
7 min read
Product Information Management

TOP-5 Product Data Challenges For Manufacturers

Manufacturers face a lot of challenges in delivering on the market requirements. Find out about the most pressing ones and how to overcome them.

Read more

Let’s Get In Touch

Need to contact us? Just use this form

Gepard Privacy Policy