Your villagers are the most important part of your village in Banished. Keeping them fed and warm in their homes is pretty much your top priority and where all of your resources go. Villagers will stock pile their homes with what they feel they are going to need and they will get those items from Storage Barns, Stock Piles (which I am lumping together for this discussion) and Markets.
As far as I can tell the market is pretty much the same as a storage barn and stock pile. All the items they can get from one they can find from the others. So I therefore ask what benefit is there to a market? If anything it seems that it may be able to hold more items but it is then limited to its coverage area while the storage barns and stock piles are not. While they look neat and employ people to just move goods around I just do not see why a market is needed.
Best Answer
The difference is that your laborers will bring resources only to the barn or stockpile closest to the resource, while the vendors employed in the market will actively seek out resources from all around town and try to keep their market stocked with a wide variety of different goods.
When you use only barns, each barn will only contain the resources produced in its vicinity. That means when your town grows (and you do not produce everything decentralized) your villagers will need to walk large distances to obtain a specific resource. But when you cover your town with markets, they will just have to visit the nearest market to obtain whatever resource they need. This will not just save them lots of time they can then spend working, it will also allow villagers to easily consume all of the different kinds of food your village has available, and a greater food variety will improve their health.
By the way: The market will only store resources which can either be consumed by houses or by workshops. There is one important resource which is consumed by neither and thus will not be stored in markets: Stone.