The evolving and raising trend of online shopping has changed the workflow of marketing and purchasing. This has eventually changed the interaction between the vendor and the consumer. The marketplace is different from that of the e-commerce store, a regular online store. It is a platform where you can sell your products as well as gain profit by allowing other vendors to sell their products in your marketplace.
of digital purchases worldwide happened via online marketplace platforms.
Are you planning to establish a marketplace? Then, this article will help you understand what a marketplace is and what are its essential components.
What is a Marketplace?
A marketplace is a mediator between the buyer and seller. In simple terms, a marketplace is a platform where various vendors sell their products and where consumers come, browse and make purchases. Amazon, and eBay, are well-known and biggest online marketplaces that have today changed the way of shopping.
Benefits of Having a Marketplace
Let us see what are all the benefits that can be gained from having a marketplace,
- Flexible and will have access to numerous products from different suppliers
- Best option for entrepreneurs as they can gain profit by providing a multifunctional platform for vendors to sell their products/services
- Cross-selling is quite popular in the marketplace
- Vendors can help to promote your platform by sharing your website links in social media channels
Designing and Developing a Marketplace Website
Wondering how and where to start for the development of a marketplace? Let us get started from the bottom line of the process.
would prefer to shop at an online marketplace for a first-time purchase.
Determining the Marketplace Type
Before you start building your marketplace, do some background research, and define your buyer personas to understand the expectations of your target audience. Most importantly, get to know the classifications in the online marketplace and then decide on the model suiting your business requirements.
B2C marketplaces are estimated to reach $3.5 trillion in sales by 2024.
Classifications of online marketplaces,
Based on participants – Classifications & Examples
B2C – the marketplace will have vendors from various companies (sellers) and consumers are the end users
C2B – individuals offer their services to employers or contractors
B2B – business sell their products and services to other business (companies)
C2C – regular users are both buyers and sellers
Based on focus – Classifications & Examples
Horizontal marketplace – offers a wide range of products targeting many audience
Vertical marketplace – offers products and services on a particular niche but from different vendors
Choose the Revenue Model
Implementing a proper revenue model can help in stabilizing the growth of your marketplace. Some ways to monetize your marketplace are as follows,
- The commission model is transparent. Here, you can charge buyers and sellers a percentage of commission for each transaction that is performed through your marketplace. This model allows both parties to use the marketplace for free and then pay when they gain something
- Subscription model can be implemented as it allows users to pay on monthly basis for using your marketplace platform
- The freebie model, allows users to use your marketplace for free initially and start charging them for accessing advanced features
- You can also allow companies to promote their products and services on your marketplace for a specific fee
Evaluate Your Business Idea
Always conduct an analysis and evaluation on your business idea in different perspectives. This will help you to get better clarity on what has to be done.
- Make research on the latest industry trends associated with your domain. Analyzing vertical marketplace, chatbots, mobile commerce, and more can help you in building your marketplace that would stand out from the crowd
- Explore your target audience and market, and collect data about your potential audience based on different personas. This can later be used for promoting your online marketplace
- Explore the market and choose your niche. You can create solutions for the common problems evolving in the market
- Ensure you are creating something unique and appealing that satisfies consumers’ needs
Choose Your Functionalities
Implement functionalities that are not complex but appealing to the consumers. Some required functionalities that are to be included in your marketplace are
- Simplified process for registration. Instead of taking users through multiple steps, you can allow them to sign up using any social media accounts or Google
- Dashboard for sellers to keep track of their products and activities in the store
- Add categories and subcategories with advanced search and filtering options along with autocomplete search feature
- Ensure to provide detailed descriptions for all the products that are available in your platform
- Incorporate multiple and secure payment gateway options
- Provide space for consumers to submit their reviews and ratings
Key Features That All Successful Marketplace Websites Have in Common
The success of a marketplace depends on its characteristics. How responsive is your platform? Can users easily navigate through without any difficulties? These all define the characteristics of your platform.
Let us see some key features that your marketplace should implement to have stabilized growth.
Clear Product Description
The marketplace would have a wide range of products from different companies. Hence, having a detailed description of the products would help consumers to decide and navigate easily.
Diversified Payment Option
Transactions in your marketplace cannot happen without this feature. Providing a variety of payment options would make the consumers appealing and beneficial. Adding some specific characteristics like refunding mechanism, the ability to split and delay payments, and more to the payment module will be an added advantage.
Easy navigation will not only promote sales, but will also help consumers to have a better user experience and find out products efficiently.
Providing this feature will help consumers to find out what they are looking for. Narrowing down their search using advanced filters would make their shopping easy.
Storing customers’ sensitive information securely would increase the trust in the store. They will be confident about not losing out on their data when integrated with a reputed company for secure database storage.
Automated Invoice Processing
Automated invoices will help in reducing manual work and also validate things whenever required.
Generating traffic reports would help in understanding user behavior and to take necessary steps for the betterment of the business.
The images and videos of the products that you upload on the product pages play a vital role when it comes to the visuals of the store. Most consumers expect the visuals to be appealing and aesthetic, hence, it is important to put extra effort into this section of the store.
Integrating Inventory Management System
This integration would help in keeping track of the stock availability of the products. Inventory visibility for vendors can help them plan for the stock accordingly. Stock visibility on the storefront can guide consumers to make the purchase or not.
Discounts and Promotions
Offering discounts and promotional sale offers can drive more customers to the business. This is one of the effective ways to attract customers to the store.
Providing necessary information and support whenever a consumer needs it would help in building a good relationship with the customers. Providing personalized services to the customers would build trust and keep customers feeling comfortable purchasing from the store.
Forcing customers to register before they complete a purchase would make them abandon the cart without completing the purchase. Offering guest checkout would allow consumers to make purchases without registering. Instead of forcing them to sign up, you can make it convenient for customers to sign in to the store using social media accounts/Google, which is a more simplified process.
Challenges You Would Face While Launching a Marketplace
Here are a few challenges faced while launching a marketplace,
Choosing the Wrong Development Platform
Choosing the wrong platform will not lead to developing the product that you are expecting by meeting both the business requirements and consumer requirements. This problem occurs when you have less clarity on how to begin
- Make use of an open-source solution and then add all necessary plugins and features to complete the marketplace
- Subscribe to a software as a service (SaaS) solution to meet your business goals
- Use white label service to develop your marketplace
Supply or Demand
When you launch a marketplace, whom should you concentrate first – sellers or consumers? This is addressed as the chicken-and-egg issue where the marketplace would face scenarios due to the gap between the supply and demand.
- Attract sellers by offering a reward or perk
- Attract consumers by offering rewards for registering
- Implement the right strategies and attract both sellers and consumers simultaneously
Low Brand Awareness
With poor promotion and less brand awareness, the marketplace will be unrecognized by sellers and buyers.
- Use SEO techniques
- Get partnered with other brands
- Implement all suitable marketing techniques
- Use social media marketing techniques for global reach
Poor User Experience
The highest possibility of poor user experience is cart abandonment. If the marketplace has a poor user experience, both sellers and buyers would be less attracted and will not show interest in the marketplace platform.
- Simplified registration process
- Easy checkout process
- Multiple payment gateways
- Easy navigation
Less Customer Retention
When a business tries to attract new customers, obviously it fails to retain the existing customers. This is quite a common problem and can be solved by concentrating on both new and existing customers
- Implement a subscription model so that it would retain customers at least until the subscription is over
- Configure a loyalty program
- Provide personalized services to customers
Ways to Promote Your Marketplace
After the launch of the marketplace and bringing in a few sellers and buyers to make use of your platform, you can’t be stagnant with what you have. Don’t you think you need to reach a large audience? For this, we need to implement some effective ways to promote your marketplace. Let us see what can we do about promoting the marketplace,
- Grow Your Email List – This is the strongest email marketing strategy. Try collecting as many emails as possible and ensure to keep them engaged by letting them know what you do and what you have for them. Making it personalized would take you to experience the next level of benefits
- Leverage the Benefits of Social Media – Concentrate a little on social media and take it as an opportunity to boost your digital presence. Make your social media channels engaging and more vibrant with appealing visuals
- Optimize Your SEO – Work on the SEO of your marketplace so that your visibility increases in the search engines. Pay attention to on-page content, meta title, title tag, and meta description. This will show up your business on the search engines and users will be able to see your title tag and meta description before anything else
- Try Google Ads – Using Google Ads in search engine marketing will show up your business in the search results by binding on keywords
- Cross-Promotion – Get partnered with other companies of your niche and implement the concept of cross-promotion. This strategy is a win-win concept where you will be able to reach the relevant audience effectively
- Engage in Online Events and Discussions – Participate in online events and discussions that are relevant to your niche and start improving your brand awareness for a global reach
- Influencer Marketing – Work with the right influencer and get your visibility increased. Ensure that the influencer is aligned with your niche and audience
Are You Ready To Build Your Online Marketplace?
Choosing the right solution completely depends on one’s business requirements. With the right technology and functionalities, start building your online marketplace today, that both sellers and buyers would be happy to use.
Are you looking for guidance on building a competitive online marketplace? A professional digital agency can help you with better clarity. This would help to choose the right model along with other functionalities that are suitable for your industry.
If you are looking for professional assistance, you can contact ColorWhistle by sending us a message or call us at +1 (919) 234-5140, we’ll get back to you at the earliest. We provide services tailored to your requirements that suit your business.