Building a Successful Marketplace
Steps to Rock the Industry
Marketplaces are one of the best choices you could go for when starting a business. Their potential is infinite, and with current possibilities and endless industry choices, you could easily build a successful place to sell your products or provide others with a possibility to showcase theirs and grab your interest. Today, we are going to share some tips that will help you how to start from scratch, and build a future-proof marketplace.
Choosing an Industry
The best way to start is to short-list some of the industries that you would potentially like to work in. You are most probably have one that you like the best, but it never hurts to look into other options too, if you haven't decided what your product will be. This step applies most to the people who will provide space for other entrepreneurs with their products showcased on the pages of your marketplace. In this case, there are two options: you are either going for a niche, or all categories at the same time. If you are going for the niche, take some time to think what is the average lifecycle of a product that you are selling: if it's something like dietary supplements, it may be a couple of weeks to a month or more, and if it's something like a décor items, customers return rate will be quite low.
Also, consider what is a buyer and supplier critical mass. If you will go for the niche, there won't be a lot of suppliers and therefore it will be harder to stay relevant and provide more choice to your buyers. Moreover, these suppliers might have approached their buyers already and chances are they won't want to deal with someone in the middle.
Assess the Market
After you have chosen an industry, it is time to define your Unique Value Proposition. The questions that you should ask yourself at this stage is what difference in the market would I create if I created a marketplace that offers these particular products to these particular buyers? Is it a big difference? How would it impact the buyers and what problems will it help to solve?
There are three leverage points to consider:
- Access. Being online means that your product can be accessed from basically anywhere, which drastically increases availability and ease of access for buyers.
- Price. You may offer great cost savings for the buyers.
- Convenience. You may offer worldwide shipping or something of that sort that will help to save the buyers' time.
Learn From Your Competitors
While being your competitors and taking away the share of the market from you, there is a good side to having a competition. Learning from your rivals is the best way to succeed. It is a good piece of advice for life in general, instead of trying to blindly seek & destroy everyone in your way, you would be better off learning something from them and making that something ten times better!
First, short-list a couple of competitors in the market. Then, you would want to go through the whole process of using their marketplace as though you are their buyer. Sign up, scroll through all the pages, add something to your wish list, maybe even add some goods to your cart. The best part is that you will learn how their website works, what is good and bad about it. Make a list of what makes them convenient to use, and what can be better, and go through the whole list of the websites that you short listed. After you have done that, you have the access to the best and worst practices that you can use in the process of creating your own marketplace.
Choose Your Business Model
Business model is one of the most important aspects to consider, because it directly influences your future profits. There are several choices, and any of them can be implemented in your future marketplace:
- Subscription-based. A seller pays a fee on a subscription model that you will design. It may be a choice of monthly, yearly or lifetime payment.
- Interest-based. A seller pays a commission for every sale they make.
- Listing-based. A seller pays a fee for every listing they make on your website.
- Featured Listing-based. Listing is free, but a seller can pay for being featured on the top of the list.
- Lead-based. A seller pays a fee for every lead that was generated for them.
- Freemium-based. Base features of your platform are free, but a seller can pay for some upgrades that will provide them with some advantages.
Analyze the Market Size
Market size is something that can be easily overlooked, and there are some reasons why you should not do that. Your market directly depends on what are you going to sell: are you going for a niche or for several categories at once? Even though niches are called that for a reason, don't underestimate them. Uber and Lyft were starting in a niche too, and initially they were thought not to get too much attention, and look where they are now! According to Bloomberg, Uber alone dominates the ridesharing business with 67% of market share, and it could or will be you!
It is again time to deal with your competitors, but that time, you have to go through their social media. Return to your short list, and look for the links to any social networks that they use. Now, it's a good idea to go through all of them and see how they approach their digital presence, what content do they post, how many posts and how many times per day or week they do it. What you want to do at this stage is to learn what digital channels work best for your business and which are not worth your effort and money.
Get a Perfect Website
Now it is time to start building the core of your marketplace - a website. It is important for it to be perfect and better than your competitors'. It is important to do the research, create an appealing brand identity and design that will make your clients drop their jaws. Here at Movadex, we have helped dozens of clients to find their perfect style. We will do the research, and then make you a perfect marketplace that will be that new player who brings big changes onto the field. Get your quote for free, and let's make something great together!