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Starting from Ebay which can be credited for pioneering the model to the world's biggest marketplace of Amazon, we have come across the evolving dynamics of ecommerce marketplaces. Amazon allows third party vendors to market and sell their products besides the regular inventory of Amazon. Over the years many other brands came to this retail market including Sears, Walmart, Newegg, Staples,Rakuten, etc.
You can differentiate the market of in-house inventory from the marketplace selling all deliverables from various parties. Just look at the products listed by major stores through some screenshots of major stores like Amazon or Walmart and instantly you can realise the nature of this market. Typically when an item shipped by anyone other than the retailer it is tagged as "Sold & Shipped by (Retailer Name)". Just look at the situation at Amazon. They are now actually selling more products of other retailers than their own merchandise.

While ecommerce marketplace model is continuing to thrive and has already proven effective for so many retailers all over the globe Drop Shipping also has emerged as a great model to sell your merchandise. Bedsos as one of the leading retailers of furniture and beds from U.K. has a clear opinion when it is about choosing any one of these two models.

Similarities that you should consider
Ecommerce marketplaces and drop shipping are two different models with some shared similarities between them. In both models there is a distributed supply chain for delivering the product to the customer. In both cases the particular seller does not control the product when it goes through the supply chain. In both models a third party stamp of security and quality is used. In case of both the models the way the product information is passed from one point to the other is the same. While in case of evommerce marketplaces the sources of the product is referred as ‘sellers', in case of Drop Shipping the same are called as ‘vendors' or ‘suppliers'.
Differences between the two models to consider
In spite of the similarities mentioned above there are few specific differences that give these two models their respective identities. The major differences between these two models can be surmised in three areas respectively as business model, shopping and ultimate end-point experience for the customer. Let us have a look at various differences in depth.
There is no disclosure of the product source with drop shopping model. But with marketplace model one can easily know the product location and the party who is controlling it. The tag "Sold & Shipped by (Retailer)" is an example of this transparency.

In case of Drop Shipping these facts remained undisclosed and hidden. While the consumer at the end of the shipping funnel clearly sees the product and the brand he cannot see the identity and location of the people involved in the process to deliver the goods. This makes Drop Shipping clearly less transparent than the evommerce model.
In case of a marketplace model, retailers have nothing to control while selecting the merchandise from the sources. In case of Drop Shipping, the retailer exercises bigger control and curate the merchandise for the business process.

In case of setting the price marketplaces does not exercise any control on it while in case of drop shipping model the retailer sets the prices.

As far as customer service is concerned, both models ensure a very clear policy to accept return of goods. In case of both the models, the return is required to be authorised. The minor difference lies in the way it is done. In case of marketplace, the customer directly contacts the product retailer but in case of Drop Shipping the customer needs to contact the intermediary seller actually.

The biggest difference lies in respect to the business model. The marketplaces directly collect money from the customers, and thereafter keeping a certain portion entitled for their benefit send rest of the amount to the retailer. On the other hand, in the Drop Shipping model retailer sets the price of the product by adding a margin on and above the wholesale amount.
When it comes to transparency, ecommerce marketplace seems to be a better and viable option and therefore are competitively better for product retailers trying hard for a better customer experience. But for certain products with return, the Drop Shipping can be an option to retail products.