How to Build an Online Marketplace from Scratch: Effective Tips to Follow
Eager to construct an online marketplace like Amazon, AliExpress or Etsy? No worries, today, it is easier than you might think. However, it requires investment! In this comprehensive review, we’ll show how to build an online marketplace from scratch. Hope that our insightful pieces of advice will help you develop a powerful competitor to all existing online marketplaces. When following our directions, you’ll definitely achieve your goal.
Online Marketplace: Brief Explanation of This Term
Before we start covering the key aspects of how to build a marketplace website, we desire to clarify the basics. What is it? It’s a virtual platform where salesmen and shoppers can meet each other and make deals. For instance, you want to sell some goods or services. So you go to a popular marketplace, create your online account, and download your offer. If a marketplace is a household name, you’ll definitely find your targeted audience there.
The success rate depends on the number of effectual deals between salesmen and shoppers. So to earn money, your goal is to create a user-friendly marketplace that encourages salesmen to use it and purchasers to buy.
In very deed, you can target lots of niches with an online marketplace. However, before you start searching for the answer to the question of how to build online marketplace, you should bear in mind that there are a few basic types of them:
- B2B (Business to Business);
- B2C (Business to Customer);
- C2C (Customer to Customer);
- P2P marketplace.
A properly built platform should have the following features:
- An engaging product catalog that will definitely attract the buyers;
- Ever-growing traffic;
- Communication and sales tools;
- Clear and easy to use payment system;
- A legal framework.
Now, let’s move on to discussing the main tips that will help make a superb, profitable and nameable online marketplace.
Determine Your Business Model
Before you start working on this project, you should feel certain that you understand what business model you want to create. No matter whether you are going to do this yourself or hire a professional development company, you have to specify your business model. The first thing that you must do is comprehensive marketing research.
- What type of customers do you want to have?
- What marketplace platform are you going to use?
- What are your benefits?
- What particular services are you going to suggest?
- Does your idea offer true value?
When you answer all these questions, it will be easier to outline a plan to follow. More importantly, you should also decide what particular business model your marketplace is going to follow. Are you going to offer subscriptions or charge a commission on each sale?
Vertical or Horizontal?
You should also bear in mind that online marketplaces can be either vertical or horizontal. The first one is mostly focused on a certain niche. Such marketplaces usually have a small user base and offer specific services or products for sale. That’s why they are regarded to be more effective when running specific promotion campaigns.
Horizontal marketplaces cover more services and products. All in all, you should know that a vertical marketplace is easier to launch. Moreover, they are considered to be the best tools that can help you find out more about the needs of your audience.
What About Your Monetization Strategy?
When you finally choose your business model, it is time to think about your monetization strategy. It goes without saying that you think about building online marketplace only because you want to earn some profit. It is not a charity project, yeh? That’s why you need to discuss everything related to your monetization strategy that mostly consists of the following elements:
- Subscription fees;
- Transaction fees;
- Listing fees;
- Premium listings;
To make the right decision, you should analyze your competitors. For instance, eBay, Amazon or Docplanner use subscription fees whereas Etsy, OLX and Mercado Libro use listing fees.
Significance of Promotion When Building Online Marketplace
Promotion is probably the main challenge that owners face. You need to do your best to attract users and customers. Remember that when a buyer obtains a product or service on your marketplace, he or she will never remember the name of the seller. So your overriding purpose is to attract consumers and salesmen. These methods will help you draw the attention of users to your platform:
- Advertising on Facebook or other social networks;
- Joining relevant groups;
- Advertising on Google;
- Content marketing focused on keys.
You can also develop a bonus system for new or standing customers. In doing so, you’ll attract them to your marketplace. Such strategies can guarantee enough leads to start a marketplace.
Professional Customer Service
Before you build online marketplace, you need to solve one more issue – customer support. A lot depends on this aspect. Quite often, clients can be disappointed with the goods they bought or they want to get in contact with a seller. When there’s no possibility to do this, this person can shape a poor opinion about the marketplace. So you need to have a customer support team that will help solve the problems that may arise.
We couldn’t pass by this question because the success of your project is contingent on the software platform that you choose. When building a marketplace from scratch, you need to hire a professional software development team. In doing so, you’ll create those options and rules that you want to have on your marketplace. Of course, this requires time and investment but in such a scenario, you can feel certain that you’ll get a top-notch product.
Our team has already helped hundreds of users to build marketplaces that will meet their needs. So feel free to contact us and we’ll help you overcome any difficulty related to building a successful online marketplace!