Marketplaces make the world go 'round. Whether it's a physical marketplace to buy the goods you need to live, an online marketplace to buy and sell luxury products, or even a service marketplace to rent or trade, there are hundreds of big-name marketplaces and thousands more you might never have heard of at all.
Why not add yours to the list?
We're not being facetious. Just because a marketplace is small, niche or little-known doesn't mean it's terrible or not profitable. There are roles for niche marketplaces, and they can often be some of the best hubs available. Sure, the dream may be the next Amazon, but you shouldn't plan on it.
Designing and building an online marketplace is a great way to run a business, make money, and never have to deal with your inventory. As a platform, the service you provide is access to others, and sometimes, that's all you need to be successful.
The only question is, how can you do it? How can you develop an online marketplace that has the potential to be wildly successful? Luckily for you, we have some tips.
The first (and possibly most important) thing you have to do is figure out what your marketplace actually will be.
What makes you stand out from the pack and find traction in a world dominated by sites like Amazon, Walmart, eBay, Craigslist, and Etsy?
By answering these questions, you refine yourself a business plan. You can use this business plan to pitch your idea to developers to venture firms that might fund your launch.
Your marketplace needs to make money somehow. Otherwise, it's not a business; it's a charity. Sure, people would flock to a marketplace with no charges or fees, but that marketplace wouldn't be long for the world without a constant incoming flow of venture funding. It's not sustainable.
So: how will you make money?
It's quite variable. You have some flexibility with this as you're designing and launching your platform. If you're backed by venture funding, you may even be able to ignore it until you can perform market research to determine the best monetization plan.
Remember, as well, that there are often legal regulations on certain kinds of monetization, like escrow. Remember to research your geography, jurisdiction, industry, and other realms for legal regulations.
Once you have a plan, you need to build your marketplace minimum viable product. There are generally six ways to do this.
Coding your platform from scratch is the most flexible option. It gives you the most robust array of customizations since you're not reliant on anything other than the limit of your developers' abilities. However, it's also the most time-consuming and expensive. Moreover, depending on your pitch, you could be reinventing the wheel.
Numerous frameworks (open-source tech stacks) are easily customizable and usable to build a marketplace. It's cheaper and faster than building from scratch but still offers a reasonable amount of flexibility (and unlimited customization if your developers know how to customize the stack.) On the other hand, you have to work within a framework someone else designed, which may not align with your ideas.
With the right combination of WordPress plugins, you can build an eCommerce platform indistinguishable from a custom-coded marketplace, except for people familiar with the back end. It's generally cheap to set up but much more restrictive on features and requires keeping potentially dozens or hundreds of plugins, applets, and pieces of code up to date and functioning together.
We live in a world of SaaS, software as a service, with thousands of businesses offering products as a service for those who want them. It should come as no surprise that there's a "marketplace as a service" (MaaS) platform option available. These can work for creating quick, agile minimum viable product deployment but lack advanced customization, which could be a significant hurdle. Pay to use one, build your marketplace on top of it, and get up and running quickly and easily.
At this point, you're ready to start building your minimum viable product. This model is your bare-bones, quick-launch product that offers just enough features to make your platform functional and prove that it can do what you want it to do. So, it needs ways for buyers to buy, ways for sellers to sell, and a demonstration of your unique selling point.
In general, a marketplace MVP should include:
All of this, coupled with a bare minimum design you can fluff up later, allows you to get your marketplace up and to run as quickly as possible. Remember, you can always add features later, as long as your initial launch product has everything your audience needs to get started and hooked.
As a marketplace, you have two distinct target audiences: the people who would buy and the people who would sell. Sometimes these are very similar, and sometimes they are very different. Either way, you need to attract both kinds of people. You need to build and maintain a balance between the two groups. After all, a marketplace with no buyers is a museum, and a marketplace with no sellers is a discussion group.
There are many ways to market your marketplace. Try blogging and content marketing, paid ads, promoting your business in social media groups and Reddit, and anywhere else that may be receptive and host the kinds of people who will be most interested in your marketplace.
Once your MVP is out the door and live, and your marketing is doing its job, the real fun begins. Now you wait, watch, and be ready to make agile adjustments based on your audience's pressures, requests, and ideas.
If a bug crops up, fix it. If a pain point starts to block users from using your marketplace, smooth it out, and if many users start to request a specific feature, prioritize it. If no one uses a core feature, push it more, or reconsider if it's necessary.
Make sure to harvest your data from various sources. Send out customer surveys and satisfaction questionnaires. Monitor social media and the communities that spring up focused on your platform. Watch out for black hat exploits, hacks, compromises, or fraud. Monitor customer feedback from any channel you can.
Be very careful when making major decisions. Be aware that a very vocal minority will often use your platform who get very angry when it doesn't work the way they want. Catering to these people can sometimes appease them but often move the goalposts. It's also possible that whatever they want would be more detrimental to your overall marketplace than the value they bring.
Of course, once your marketplace is up and running and has proven that there's both an adequate audience and that it's functional, you're in the perfect position to grow, expand, pull in venture funding, add more features, and generally improve.
Once you've reached that point, you have one more major decision to make. Will you sell when one of the significant corporations comes calling? If Amazon wants to buy you, do you accept? Sorry, we can't help you with that decision. We can, however, assist with building a stable, secure, and effective platform in the first place, so reach out to us today for a direct chat about your next big idea.
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