Simple Steps to make your Online Marketplace Platform Successful

Simple Steps to make your Online Marketplace Platform Successful

1. Introduction

Online marketplaces have grown in popularity as a viable business model. They’re businesses that need little capital and produce consistent profits when effectively managed.
‘Suppliers’ and ‘Demanders’ are the two major ingredients. The marketplace is the location where the two will communicate. It enables Suppliers to deliver a service or product that Demanders need, while also making the process simple and effective.
The only way to thrive as a marketplace entrepreneur is to provide a platform that customers love.
This article will show you how to find the quickest and easiest way to test your idea and create a marketplace that people love—or how to pivot easily if anything better comes along. Every one of our suggestions is focused on real-world experience: lessons learned when developing marketplaces for our clients and assisting hundreds of other entrepreneurs with OSC’s marketplace services.
However, first…
Let’s start with the basics.
What exactly are internet marketplaces?
Multi-vendor marketplaces (also referred to as two-sided, peer-to-peer, or simply online marketplaces) are online e-commerce platforms that allow:
  • Third-party retailers (or sellers) make their products available for purchase.
  • Buyers order products from a variety of retailers.
  • The marketplace processes payments and earns money via fees.
The main lesson is that a healthy supply-side and demand-side are needed for a competitive marketplace. Both platform users must learn the platform’s worth. You can’t have a viable, long-term market without both.
To make it easier to understand, this guide is divided into several chapters:

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2. The Need for Ideas

Moving in the direction of where there is demand is the most critical aspect of coming up with a business idea.
You need to come up with a solution to a problem. Fortunately, there are a few ways of determining where problems need to be addressed.
Let’s take a closer look.

Consolidation of a sector

A perfect place to search for ideas is in a market where vendors are dispersed and can benefit from a centralized repository where customers can shop for what they need. This problem was solved for freelancers by Upwork.

Examine Craigslist.

Find an active Craiglist category or sector with an active supplier and customer base. Then see how you can improve on the experience. Better could mean better transaction facilitation, adding a layer of protection for either side or just making it more efficient by viewing and screening advertisements that are better for the customer.
Marketplaces are springing up all over the world, steadily declining market share from Craigslist’s most famous verticals.

Make It Easier to Make Decisions

Customers benefit from marketplaces because they offer alternatives. When a major decision is at stake, such as financing your business, you want to know you’re getting a good deal.
If you can create a place that gives customers choices when making a significant or expensive decision, you could have a winner on your hands.

3. Before you start, validate the idea.

This is without a doubt the most important step in launching a profitable online marketplace. If you take your time with this step, you will save yourself a lot of time and money in the long run.
Many aspiring marketplace entrepreneurs claim that they want to create the easiest, smoothest, most feature-rich, and elegant-looking platform possible.
That’s an excellent end goal, but it’s almost never the best place to begin. Instead, a young entrepreneur’s first priority should be to validate their concept and product/market match.

4. Examine the market you’re after

There’s no way around doing consumer analysis if you’re building a marketplace platform from scratch or transitioning from traditional e-commerce to marketplace commerce. Starting an online marketplace without a clear understanding of the target market and customer needs is a great way to learn a painful lesson, but not a great way to start a business.
Here’s where market analysis comes into play.
You’ll need a thorough understanding of the industry, the users, their needs, and the solution they’re searching for to create a profitable marketplace business.

Analyze the market

Before you dive in, make sure you realize what you’re getting yourself into.

What is the state of the industry?

Examine the market’s scale and volume to see if the business model you’re considering is viable. Smaller markets can seem to be easier to enter, but if you want to charge selling fees and there isn’t enough sales value, you’ll need a different business model.

Is the target market divided into distinct niches?

The more you understand about market segments, the more likely you are to choose the most appealing niche. Small niches have expanded into large marketplace industries today:
  • Amazon started off as a small online bookstore.
  • Etsy began as a discussion board for crafters.
  • Eventbrite first targeted the tech community.
You will face competition, whether direct or indirect, no matter what business you are in. Find out who the rivals are and how long they’ve been in business. When you study the marketplace, you can learn about the marketing tactics and business methods used by your target customers, as well as the strengths and weaknesses you can use to your advantage./div>

Keep an eye on industry dynamics.

Is the economy rising or falling, expanding or contracting?
You will take advantage of major shifts or developments, such as technological breakthroughs, legislation, or a shift in consumer behavior if you can spot them

Identify your target audience

You are not creating the marketplace for yourself; rather, you are creating it for the consumers.
You can’t handle their problems easily if you don’t know who they are.
Begin with the most basic questions:
  • What are the core users’ primary targets and challenges?
  • Where do they shop, why do they buy, and who do they buy from?
  • What are their motives and what influences them?
You can now build a few simple buyer personas to help grasp the target audience.
You’ll have at least two distinct user communities when you’re creating a two-sided marketplace:
Your buyers and sellers each have their own set of ambitions, challenges, and motivations.
Be certain that you understand both sides.

Understand the needs and solutions

Now that you’ve figured out the market and the consumers, it’s time to get into their needs and the ideas that will help them overcome their problems.
You want to find out what the most common pressure points are for your end customers and how they can be alleviated.
Do your prospective buyers buy online? If so, where are they doing it, how are they doing it, and why are they doing it? Are they pleased with their purchasing experience? What might possibly be better?
How about your buyers? By now, you should have a good idea about who will be selling their goods on your marketplace – reach out to them! Inquire on how they now market their goods, what other outlets they use, and what makes them happy and dissatisfied. What would you do to improve their experience?
By asking these questions, you will gain a greater understanding of your users’ desires as well as the strengths and shortcomings of your rivals, allowing you to provide a better answer.
Your market analysis should result in a good picture of your target market and the demographic you wish to reach.
It will allow you to choose an appropriate niche for your marketplace site, develop a solution that addresses your customers’ challenges, create a viable business model, and plan a marketing campaign that will set your new platform apart from the competition.

5. Identify the suitable business model

Prior to attempting to find an answer to the question, “How do you create a marketplace?” answer the question, “How am I going to make money with my product?”
To draw investors and become globally competitive, all ventures must produce revenue. It’s no different in the marketplace. There are many ways to monetize the online marketplace.
We’ve already learned that most startups struggle when they want to create something that no one wants.
Do you know what the second cause for failure is?
We ran out of money.
That’s right – just creating a valuable commodity that consumers require isn’t enough. You must figure out how to make it profitable – to keep it profitable in the long term.
Amazon made its first quarterly profit in the fourth quarter of 2001, more than six years since it was established. It took Etsy five years to make a profit in 2010. eBay, on the other hand, has (apparently) been successful since its inception, due to monetization by listing and sale fees.
The point is, regardless of your industry or context, it’s a smart idea to have a sustainable business plan BEFORE launching your online marketplace, rather than after you’ve already launched.

Selling fees

Now, the precise way your marketplace can make money is dependent on a variety of factors. Here are a few marketplace business models to think about.
Selling commissions are everywhere – and with good cause. It’s an excellent method of monetization.
when a vendor receives and processes a new order on your platform, you can charge them a selling fee. The more orders your marketplace gets, the more money you make from sales commissions.
Doesn’t that sound fantastic?
The disadvantage is that sale fees are much more difficult to enforce than other forms of fees.
For starters, you’ll need a payment portal that allows you to break customer payments so you can receive your fee at the time of sale (unless you want to collect sales fees manually, which you actually don’t – for a variety of reasons, including legal).
And you need a consistent flow of new orders to produce enough money from limited sales fees. It can be a challenge when you’re just starting out.
It does, however, scale extremely well. If the website gains enough traction and you can earn sale commissions automatically, you’ve got a nice business on your hands.
On today’s most common marketplaces, you can find examples of sale fees such as:
  • Amazon charges sale fees depending on the type of product.
  • Etsy charges a 5% “transaction fee.”
  • Envato chargers bill dealers 12.5 percent to 55 percent of their revenue.
  • Airbnb charges hosts a “service fee” of 3% plus taxes.

Subscriptions

We don’t need to remind you that subscription is king. Subscription-based companies that generate recurring income drive the global shared economy. Charging your vendors a certain fee on a daily basis is an excellent way to earn recurring sales and keep your marketplace afloat.
The first rule of subscriptions is to ensure that your sellers earn greater money from your platform than it costs them to remain subscribed. They would willing to spend $19.99 per month if they can profit $199.99 per month.
From a technological standpoint, subscriptions are more challenging. You’ll also need a payment portal that accepts subscription fees, such as Stripe (you can do manual invoices if you’re an MVP, but good luck scaling this approach).
It is, though, worthwhile. When you combine this concept with multiple tiers that enable sellers to gain access to additional features (such as specialized pricing tools) or lower their selling costs, you’ve got yourself a dependable recurring revenue source.
Amazon, for example, provides two sale plans: an Individual package with an additional $0.99 per item selling fee and a Professional selling plan for bigger retailers for $39.99 a month.

Listing Fees

When your sellers list their goods for sale on your platform, you can charge them a listing fee.
Listing fees can be fixed or variable, depending on the price of the commodity, the category into which it is placed, and other factors.
Sellers will normally accept a small insertion fee to list their item as long as they can make a profit in return, similar to subscriptions.
Listing fees, like sign-up fees, are relatively simple to raise – but they are far more scalable.
Consider deferring the fee until after the commodity has been sold rather than at the time of publication to minimize agitation.
Etsy, for example, charges a $0.20 insertion fee but then receives the listing fee for multiple quantities of an item after it’s listed.

Sign up fees

A sign-up fee is a one-time fee that you charge your sellers to join your marketplace.
The best thing about signup fees is that you can charge them even though your platform isn’t yet booming – as long as you can convince potential sellers of your vision.
Sign-up fees are also simple to obtain since you can use any standard payment portal or even manually submit payments (e.g. via PayPal, bank transfer or in-person).
The biggest disadvantage is that sign-up payments do not scale, and if you have a vendor on your website, you’ll need to find other ways to monetize.
You’ll still need evidence that the platform is worthwhile before charging sellers a one-time sign-up fee.
Sign-up payments are seldom used for monetization purposes by the major marketplace players due to scalability concerns. You may, however, charge a registration fee to root out the less serious vendors.
Signing up as a Google Play seller, for example, costs $25, and Google obviously does not benefit handsomely from these payments.

6. Assess the market size correctly

When debating vertical vs. horizontal, it’s still a smart idea to understand the market size. When you know what drives the business, you can estimate its scale. If it’s a vertical marketplace, you’ll need to identify distribution channels and industry figures. This allows you to gain insights into local/global turnovers, how much of the market is offline, profit margins, and so on.
Wide markets have a larger addressable audience. That is, supply and demand are much more balanced, and the marketplace will have greater accessibility and clarity.
Nonetheless, anyone can potentially underestimate market sizes. Uber, Lyft, and Airbnb, for example, did not do well with the majority of investors at first. Since their initial audiences were considered to be much lower, their projected sales were therefore insufficient. However, the latent demand (potential size) was underestimated, and the markets turned out to be much bigger.

7. Specify the MVP

A minimum viable product, also known as the MVP, is a product that has just enough features to entice early adopters. The MVP’s main goal is to get the application into the hands of the intended audience as soon as possible. Following the release of the MVP, you can depend on customer feedback and must be prepared to make continuous changes.
Often the MVP exposes a heartbreaking truth: the predictions you made during the business research were incorrect, and the product wasn’t as clever as it first seemed. You now have the option of changing the course subtly and adjusting the proposal to suit the actual consumer demands – or giving up. In the latter example, early failure equates to low-cost failure.
An MVP’s initial concept is to launch an online marketplace with only enough functionality to draw early adopters. An MVP isn’t about providing a lot of features and making money. It is all about validating the concept, locating prospective buyers, getting input on the product you have, and continuously refining it
An MVP will help you draw your first customers and even your first payments, in addition to validating your claims about your marketplace concept. Having an MVP that is already producing returns makes you more appealing to early-stage buyers.
Consider how Airbnb began their online existence and how they now appear following years of studying their customers’ wishes and desires.
They originally chose to create a basic website with one goal in mind: to validate the platform’s assumption that it would draw people’s interest. The investors became unstoppable until they realized the potential of such a service. According to Crunchbase, Airbnb has earned $4.4 billion in its 11-year existence and is regarded as one of the most profitable startups of our time.
Of course, their website is now much more visually appealing and draws millions of visitors.

8. Make a strategy for the market operations

It’s one thing to create an online marketplace website. Managing a marketplace enterprise successfully is a whole different thing altogether.
Even a simple e-commerce business can become complicated at times due to the volume of information you would work with on a daily basis.
Owing to the essence of two-sided networks, marketplace operations can become more complex.
On a daily basis, as a marketplace owner, you will face the following challenges:

Taking care of vendors/sellers

Since sellers are the foundation of your marketplace, you’ll be working with them often.
This covers everything from finding new sellers and assisting them in getting started to keeping current sellers satisfied and competitive.
You must first persuade your sellers to enter your website. Hopefully, during your business analysis and strategy, you established your particular value proposition.
You’ll now need to build a series of landing pages that illustrate how your platform operates and why sellers can participate.
After that, you’ll need a simple signup form. Determine who should apply and what details you need from them, then plan your registration flow with this in mind.
Will anybody be able to sign up, or will only vetted vendors be accepted? If you want to drive freeloaders out, make sure you have a way to check the applications.
If you’re charging sign-up payments or subscriptions, you’ll need to ensure that either payment transfer is built into the registration flow or that you have a way to collect the fees manually by direct contact with the vendors.
While you’re at it, determine how much power the sellers will have over their stores, how their stores can look, and how buyers will find them.
If the new seller has signed up, you’ll want to make it as simple as possible for them to import their product catalog into your website.

Managing goods

You won’t normally have to compete with your own inventory as a marketplace owner. You may, however, need systems in order to handle the goods offered by your vendors.
Your product list can be organized in one of two ways:
  • Any product on marketplaces such as Etsy or eBay is owned by a single vendor.
  • A single commodity can be marketed by several person vendors on websites such as Amazon.
The way you organize the catalog will influence your software selection, the architecture of your marketplace sites, and how your sellers publish and treat their goods.
You now want to make it as simple as possible for new sellers to get started on your website. You can achieve this by either finding a way for them to bulk import their existing goods or by providing an onboarding process where you do it for them.
If the majority of your sellers are already established e-commerce company owners, it’s a smart idea to allow them to import their catalogs from other sites where they sell, such as Amazon or Shopify.
Optimize your product listing forms by deleting irrelevant information to make it easy for your vendors to list products for sale. If you want to carry a variety of product categories, bear in mind that different products can probably require different sets of fields.
To ensure the quality of your listings and keep scammers off your website as you expand, you will need a product moderation framework or a set of content.

Processing of Payments

When compared to handling purchases in a standard online store, marketplace payment processing is often more complicated.
To begin, you’ll need specialized marketplace payment gateways that will enable customers to make simultaneous purchases from multiple sellers and split payments at checkout.
Today, more payment solutions accept marketplace purchases, but implementation can be challenging.
Second, you’ll be dealing with a variety of payment methods.
Here are a few payment samples from a standard marketplace platform:
  • Customers must make payments to vendors in order for the transaction to be completed.
  • Payments from vendors to your platform in the form of subscriptions and fees
  • payouts to vendors from your platform
Different payment flows have different implementation criteria.
As a result, make sure you know which payment gateways you’ll be using and how you’ll be using them.
You’re in big trouble if you can’t find a good portal to get it to fit with your marketplace apps.
Finally, as the administrator of a marketplace website, you will be responsible for paying taxes, invoicing, and filing. These specifications can vary depending on the location and sector.

Logistics and shipping arrangements

You don’t have to deal with inventory, but your vendors do, and your site must be able to support them.
The first thing to consider is whether you want your vendors to ship products for you or whether you want to do it yourself (like Amazon FBA).
If you ship yourself, the shipping will be more complicated because you’ll have to collect merchandise from the sellers, store it, and ship it to the customer. Estimating delivery costs and times, as well as monitoring the item at each point, would be more complicated in this situation.
If sellers are in charge of shipping, they’ll need a simple way to keep track of shipping rules and communicate them to buyers. You can use a flat rate, price, or weight-based shipping rules, as well as personalized per-product shipping rules, so make sure the sellers can easily define different shipping rules to different locations from different carriers.
There are a few more questions to consider, regardless of the shipping method you use:
  • What strategy would you use to track numbers?
  • Do you want third-party software such as shipping APIs?
  • How can you create and execute shipping service level agreements (SLAs) around the marketplace?
The cost and pace of shipping have an impact on marketplace conversions, so having this part right is critical.

Management of orders

The first move is to get consumers to buy from your platform. The next move is to ensure that your sellers really deliver.
The quicker the vendor receives the notification of a new shipment, the faster they can process it and keep the buyer satisfied and willing to buy from them again. As a result, the platform must alert sellers to new orders and make it simple for them to access, handle, and process them.
If you want buyers to purchase from several vendors at the same time, you’ll want to make sure that everyone understands how different products under the same order are dispatched.
You should give the sellers the option of sharing the tracking number with the customer and keep them up to date on the status of the order at all times.
Finally, problems and concerns are unavoidable; have a strategy in place to deal with them.
At the very least, you can open a line of contact between the buyer and the vendor so that they can work out a solution.
When your business grows, you may want to build your own buyer and seller security plans, similar to eBay’s Money Back Guarantee or Airbnb’s Host Protection Insurance.
You risk finding yourself involved in disputes, compensation demands, and litigation if you don’t do this.

Content management and marketing

Because of network effects, your platform will gain some momentum, so you must aggressively encourage it – particularly in the early stages.
So, where do you begin?
When you’re just getting started, the inevitable first challenge is how can you attract new vendors and buyers to follow you and stick with you? This is something we’ll go over later in this guide.
Then, once you’ve got the marketplace up and running, you’ll need to find out how to keep it growing in the long run. You’ll accomplish this through SEO, organic and compensated marketing strategies, and other company growth efforts.
What is the purpose of SEO? Since organic search also accounts for more than half of all trackable traffic
To reduce the amount of time you have to spend optimizing the marketplace for search engines, make sure the tech you use is SEO-friendly. This includes vendor shops, product lists, and other marketplace sites that are search engine friendly, optimized, and shareable.
Most regular sellers will not bother optimizing any listing for search engines, so you must make it a no-brainer for them – or you will end up with a poorly optimized platform.
In a traditional marketplace website, there is already more user-generated content than just goods. You’ll have product reviews, customer questions and answers, featured vendor shops, blogs, and more – all of which would benefit you, the platform owner!
Make it simple for your users to create awesome content on your platform, and promote and prominently display it.
You would, however, need systems in place to avoid low-quality UGC:
In the long term, organic marketing is excellent, but don’t overlook paid acquisition. The more material that is produced on a daily basis, the more money you can get from paid marketing campaigns. Make sure the marketplace has a paid marketing campaign in place to recruit new customers and raise brand awareness.

Relationship management of the buyers and sellers

It’s no longer enough to simply draw new users; you must still keep them satisfied, committed, and engaged with your marketplace on a daily basis.
You will be engaging with the users and assisting them in answering questions and solving challenges on a regular basis, so have a strategy in place for that.
Here are some of the obstacles you’ll face:
  • assisting new vendors with their setup and answering their questions
  • assisting with logistical issues and upholding the rules
  • answering concerns about the order
  • assisting in the resolution of conflicts between the seller and the buyer
Enable consumers to ask sellers questions about goods and consult with them before and after placing an order to reduce your own involvement. The more options you have for contact, the more possible conflicts can be settled without your involvement.
The importance of mass communication cannot be overstated. You’ll want to be able to alert your sellers to policy updates and new features or inform your buyers that you’re running a marketplace-wide discount promotion this month.
Don’t forget about post-transaction communication as well. Allow and promote it to ensure repeat sales, gather feedback, and establish trust among the platform’s buyers and sellers.
This will assist you in transforming the marketplace from a transactional channel to a long-term enterprise that consumers love engaging with.

9. Outline the most important aspects of the marketplace

When creating an online marketplace, the easiest way to waste time, money, and initiative is to provide functionality that the customers don’t need.
Many marketplace ventures have invested much too much time in progress, only to never launch or discover that customers need a radically different set of features a week after launch.
Marketplace platforms can be up and running in a matter of weeks, with just the most simple features – and then change as they grow. In the long term, this has generally turned out even better.
Our advice to marketplace entrepreneurs is to start with the basics and introduce an MVP as soon as possible, then develop the platform as the business grows and the needs become clearer.
So, what exactly are the critical marketplace features?
Although some of this can vary depending on the market, it’s best to divide the functionality into three categories: seller features, buyer features, and platform features:

Seller features

Your vendors want to sell their goods and get paid for them. This includes effectively listing, marketing, and shipping goods.
Focus on streamlining the onboarding process to make it easier for your sellers to get started on your website. The easier it is to onboard new sellers, the more likely they are to join you.
A good onboarding mechanism involves concise seller terminology and helpful landing pages, a simple seller signup process, and a convenient way to import and handle their product catalog.
What sorts of items will be available in your marketplace? Optimize sales management functionality for such a specific product category – don’t make the vendors do any more work than is completely necessary to get the product released.
Following that, your marketplace should make it as easy as possible for your sellers to accept and process orders. Notifications are needed to ensure that directives do not go unanswered.
Give the sellers at least the fundamental sales and marketing methods, such as coupon code management and product advertising, to make selling and marketing simpler.
Finally, ensure that the sellers can speak easily with you and the customers. Public product queries and a private chat framework are a good place to start.

Buyer features

What are you looking for when you buy on Amazon? To quickly and conveniently discover, order, and obtain the items you need.
So, make it as simple as possible for your customers to look for brands and filter categories. What makes it so simple? A functional search bar (albeit with a low bar), faceted product filters, and information-rich product pages are all good places to start.
The next move is a quick checkout. The quicker it is for a customer to place an order on your platform, the more likely he or she can complete the transaction. A new checkout mechanism is needed, preferably one that allows for purchases from multiple vendors to be made with a single payment.
You want to have payment options that are convenient for your customers. Stripe is cool and all, but it’s pointless if your customers want to pay with cash on delivery in your region. This is a question you should have asked during your market analysis because it is typically dependent on your area and industry. In most instances, a split payment gateway and/or a manual processor, such as cash on delivery, are needed.
Order management is now almost as essential for the buyer as it is for the seller. Allow your customers to easily monitor and track their purchases, as well as receive notifications when the status changes.
Communication is also important. Allow your buyers to ask sellers pre-sales questions, contact them with order-related inquiries, and leave comments. This ensures that the platform has a positive buyer experience and aids in retention.

Platform features

Your platform’s goal is to bind buyers and sellers while still generating money to keep your business afloat. As a result, you’ll need the right resources to sustain your marketplace activities and business model.
In addition to everything we’ve mentioned so far, you’ll need a way to track, control, and moderate everything that happens on your platform.
As a marketplace operator, you will be responsible for assisting vendors in setting up and maintaining their warehouses, authorizing and upgrading individual items, looking up and handling orders, and so on.
You’ll probably want to customize the marketplace’s look and sound without having to delve into the code. This would make it easy for you to make seasonal improvements, add new items and categories, run marketplace-wide sales, and highlight your best sellers and products.
Depending on your business model, you will be required to process not only buyer-to-seller payments, but also seller fees, manual vendor payouts, and other forms of payments. The same is true of shipping and logistics. Your website should provide a way for sellers to handle delivery approaches and make it transparent to customers where they ship to and how much it costs.
This doesn’t mean you need to integrate directly with third-party shipping providers and APIs; automation will come later. Your vendors, at the very least, need a way to manually specify their own shipping costs.
These are the bare minimum requirements to get the marketplace up and running. You can provide your customers with a lot more in the future:
  • tools for monitoring
  • advanced features for selling and promotion
  • third-party e-commerce integrations
  • you can build your own mobile apps, and so much more

10. Grow your online marketplace user base

Each small business’s dream scenario is to have thousands of consumers, both vendors, and clients, within hours of launching a marketplace app. Unfortunately, such a happy coincidence is not guaranteed. That is why, even before the online marketplace is created, you can start growing your user base. This is how you would entice your most devoted clients.

How would you persuade vendors to enter your marketplace?

You may assume that no one is interested in entering your market unless there is a solid buyer base. The truth, on the other hand, is very different. Suppliers and service providers are still on the lookout for new ways to market their goods and services. If you can persuade them of the benefits of selling on your platform, they’ll gladly sign up. Simply make sure to present all of the rewards and perks of your marketplace business.

What are the best places to look for prospective sellers?

  • Examine the services provided by your rivals and those that are similar to yours: If a contractor already uses a marketplace, they may be interested in similar offers. Furthermore, they still have an active stream of orders (your competitor’s platform), which means they won’t push you if they don’t get an instant answer.
  • Make use of search engines: Look for active service providers in your desired region. To attract the interest of established businesses, offer special incentives such as membership discounts or unrestricted access to premium features.
Make use of social media: Check out individual Facebook pages, follow industry-related hashtags, read feedback, and so on. In addition to finding a few new buyers, you’ll have a few suggestions about how to expand the marketplace.

How do you get consumers to come to the marketplace?

So you were effective in attracting the vendors or contractors to your marketplace. Congratulations! But you’re not done yet. No marketplace will be competitive unless it has a strong user base. So consider carefully how you can raise consumer awareness of your business. Here are a few suggestions:
  • Create your own blog or online forum: Please, however, do not write for your service. Consider subjects that would be of interest to your prospective clients, include useful tips, or share related stories. If your marketplace sells pet-related products and services, your blog should be useful to pet owners. You could also post entertaining material with cats, such as home videos. Your odds of success improve if you bet on user-generated content.
  • Participate in discussions: The easiest ways to get the interest of your target audience are Facebook groups, forums, and so on.
  • Make a landing page and publicize it: You should begin collecting emails well before the platform is developed. Simply create an online marketplace landing page, post it on relevant platforms, and unleash ads that are tailored to your target audience.
  • Seek for brand ambassadors: Make contact with bloggers or local celebrities and ask them to be your brand ambassadors. Their supporters will undoubtedly follow.
You must ensure that on launch day, the marketplace will not be devoid of any listings. This destroys confidence in your page and makes attracting new users very unlikely. So, before the launch, do your best to create a small but devoted group.

11. Selecting the correct marketplace software

You now have a viable business strategy and an operational plan, as well as an idea of which payment portal to use and what functionality the marketplace app would need.
Now is the time to choose the software that will fuel your marketplace platform – and quickly!
Divide marketplace application software into three categories: cloud or hosted services, standalone solutions, and multi-vendor CMS extensions.

Cloud or hosted services

Going with a popular marketplace SaaS is normally the first thing to think about if you’re a new marketplace entrepreneur.
Cloud marketplace applications are the most simple to implement and need little to no technological expertise
In most ways, they also have free trials so you can spend some time experimenting with the platform and ensure it meets your needs.
Here are a few common marketplace SaaS solutions to consider:
  • Sharetribe
  • Marketplacer
  • Near Me
  • Arcadier
The biggest disadvantage of cloud marketplace solutions being the small customization options. If it doesn’t fit you right out of the box, you won’t be able to change it because you don’t have code access.
If you want something more personalized, standalone marketplace software is a safer option.

Standalone solutions

There are tech solutions created especially for marketplace shopping, as opposed to standard e-commerce
Since you have full access to the source code and own it directly, standalone marketplace apps allow for far more flexibility and modification.
In most instances, you can still host the website yourself and have complete control of the marketplace experience from start to finish.
The following are some of the most common standalone marketplace solutions:
  • MultiMerch Standalone
  • CS-Cart Multivendor
  • X-Cart Multivendor
  • Yo-Kart
What’s the disadvantage? To create a marketplace website using self-hosted applications, you would need at least some technical knowledge. Software is software, no matter how user-friendly it is, and it must be hosted, supported, and upgraded on a daily basis.
When dealing with self-hosted software, we still recommend having a developer on your team or working with an organization to make your life simpler.

Multi-vendor CMS extensions

Finally, you should use a standard CMS such as WordPress, Magento, or OpenCart and add a multi-vendor extension on top of it.
You might anticipate that this would provide you with all of the advantages of free and open-source CMS while still powering your marketplace. In fact, things rarely go as planned.
Content management systems are intended for use of standard websites or e-commerce. Converting a traditional CMS into a marketplace portal is a complex, time-consuming, and error-prone operation.
You must have a developer on your staff who is familiar with both the underlying system and two-sided marketplaces in this situation. I promise you will have much more technical work to do than with SaaS or stand-alone marketplace applications.

Here are few things to think about when selecting a tech solution:

Begin with the kind of marketplace you’re creating. Are you selling products, services, or reservations? Software optimized for a commodity marketplace would not work well in a service marketplace, and vice versa.
Determine what functionality the platform needs. Check that the solution meets the business goals, not just the basics, but also payment management, logistics, and other critical functionality. And, if it doesn’t include the functionality you need, will your team modify it to include it?
Take a close look at the customer interface and dependability. This is often ignored by new marketplace operators, but it is just as significant. Check that the solution not only has the functionality you need but also has a pleasant user interface. If your marketplace is difficult to use, the rest won’t matter – the customers will abandon ship as soon as a decent option becomes available.
Get to meet the people who created the solution. What would you expect in terms of technical assistance and code consistency from the people in charge? Growing a marketplace business can take a lot of time and resources, so you’ll want to make sure you have all the help and product upgrades you need over time. Can you treat the organization as a partner rather than merely a tech vendor?
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Finally, there’s the financial plan. The budget should not be a top priority when choosing marketplace apps, in my opinion. You’ll spend thousands of hours over the years developing your marketplace, so saving a couple of hundred dollars on software that runs your whole company isn’t worth it.

12. Launch your marketplace

It’s not enough to build a marketplace website; it’s also essential to launch it successfully.
What are the plans for launching your marketplace?
It’s a smart idea to roll out the modern marketplace in two stages: soft and hard launch.

First, release a limited beta version

You can run into a variety of issues at first, regardless of how precise the specification or well-designed the approach is – everything from technical bugs to usability issues to missing or incompatible functionality.
That’s why a limited release before the grand opening is a perfect way to try everything out and make sure it runs as planned.
Don’t wait too long to tell your early beta users about your approach – do a soft launch as soon as your MVP is available, if not sooner.

Collect and analyze feedback, and iterate and improve

Now, in every way you can, gather as much feedback as possible.
Talk to the early buyers and vendors about their experiences and jot down everything they have to say.
If at all feasible, communicate with your users in person or record and transcribe interviews.
Most notably, listen rather than talk. This will provide you with a plethora of enhancement suggestions that you can implement to make your platform even better.
Then, iterate and refine – take as much time as you need to improve your MVP based on the input from your soft launch.
And one more thing: don’t just use the early adopters as test subjects; instead, attempt to cultivate genuine relationships with them and earn their loyalty. In the early stages of your venture, this confidence will assist you in promoting and growing your marketplace.

Launch the enhanced platform

People have already heard about your new marketplace website by now, so it’s time to make it official.
Before you begin, run a final series of checks to ensure that it is running as it should. Prepare the team for launch – things seem to go wrong when you least expect them to.
Make your launch an event, no matter what kind of business you’re in. Go where your target customers are and introduce your launch to them through a webinar, a Q&A session, or an AmA post.
Finally, keep the momentum rolling – your launch isn’t the end, it’s just the beginning.

13. Grow your marketplace

Hopefully, you’ve effectively unveiled your online marketplace and new users are beginning to use it. It is now time to concentrate on user growth and retention.
Growing a marketplace is not the same as growing a normal e-commerce company, but they do share certain similarities.
Since online marketplaces are two-sided, you must concentrate on expanding both your vendor and client base.
In the early days of your new marketplace venture, growing your supply side will be your primary focus, so it’s important to develop your pool of new sellers and ensure they stick around.

Keeping your customers satisfied will help you retain them

Since you’ve effectively unveiled the marketplace and implemented new user engagement processes, it’s time to concentrate on retention.
Why waste time and money acquiring potential customers just to see them leave the platform the next day?
As a result, you must ensure that your vendors and buyers are pleased with the site and able to continue using it.
Continue to collect suggestions and improve the marketplace. Determine the most frequent customers and arrange personal interviews with them in exchange for a coupon code or other deals. Resolve problems as soon as they emerge.
Build a knowledge base for your buyers and sellers that addresses the most often asked questions to make your marketplace more user-friendly. You may also build a guide or a series of videos for your sellers to help them sell more successfully on your website.
Create case studies and success stories of the best sellers to feature and market them. For eg, Etsy’s content team does an excellent job of promoting their users’ stories on their blog. That will keep them satisfied and draw in new clients while still assisting the SEO activities.
When you have the opportunity, read more about advanced analytics and conversion rate optimization to make your improvement plans more data-driven.
Don’t forget to keep your marketplace software up to date to ensure that your marketplace is both safe and effective.

14. Final Thoughts

Finally, entrepreneurs who are involved in the marketplace should put a strong emphasis on timing. Any patterns and demands cannot be guaranteed to last. If you wait too long to begin, your idea can become obsolete. So, take our advice, reconsider your business plan, and act quickly! Best of luck!

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Feb 10th, 2021|
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