What is an Online Marketplace?
In an online marketplace Script, buyers and sellers do transactions through a centralized platform. These sort of markets have two particular client groups that depend on one another for goods and services. The way toward growing such marketplaces is generally tedious and difficult to maintain.
The first and the foremost challenge of making this sort of marketplace is to understand and meet the issues of two completely different networks. Further bring enough members of both of them to give your marketplace enough liquidity. In order to build a successful two-sided marketplace, you have to identify the needs of both these groups, streamline the decisions to guarantee uniqueness, and cut a specialty for yourself.
Let’s look at each of the following 7 steps to build a successful online marketplace.
Step 1: Ideation
A great idea is always the first step in getting started with an online marketplace business. Your thought should be able to solve some real problem of the consumers to succeed.
Do you think you have an incredible idea for a marketplace but feel there’s already a lot of competition in the market. One solution to this is to limit your focus, both in terms of geography and your product or service offerings. You can always broaden your focus later on, once you succeed in your specialty.
Step 2: Market Research
After coming up with a great idea, the following step is to do market research. You need to find out about the competitors who are doing likewise as yours.
Even if your idea is already taken, you can win over your competitors by your method for execution. It is important to take a look at how the market has implemented the thought you are working on. Therefore research on the similar initiatives and potential customers and their procedures and turns.
Step 3: Revenue Model
To build a feasible and successful marketplace, you need to find a revenue model that can finance your tasks. Below are some of the monetization options to help you choose the right model for your idea.
A) Commission based
The most popular business model for modern marketplaces is to charge a commission from each transaction. When a customer pays a host, the marketplace facilitates the payment and charges a specific percentage as the commission.
This model is very well known and worthwhile as it offers share to the marketplace in all the transactions through their platform. The best known marketplace platforms include TaskRabbit, Airbnb etc. who use commissions as their main business model.
B) Featured posting and ads
Featured postings help the hosts or the providers to buy more visibility for their contributions by paying a specific amount to the marketplace owners. It will get their listing to be featured on the homepage of the site or at the top of a certain category.
C) Google AdSense
Google AdSense is pure advertising model gets you paid for showing ads. Ad-based models work best when you have a extremely specific specialty. In addition, there are business providers interested in selling their products or services to specific audience.
You can try out multiple business models to pick the best option for your marketplace.
Step 4: Website
After deciding on the revenue model, you need to build a website to get your business going.
Think what do clients need from an online marketplace and what service providers need. consider how intermediary companies satisfy the needs of users on both the sides of the range. For example, TaskRabbit connects people who need help with their everyday chores such as cleaning, delivery, moving, and handyman services with a network of individuals. These individuals are pre-approved and background-checked professionals. They posses the time and skills needed to complete the listed task.
Anticipating both parties’ needs would mean providing a completely useful website to easily meet the needs of both the parties. Website clones can easily meet your business requirements, if you wish to start a business similar to an already established marketplace. EllowScripts can help you kick-start an online marketplace similar to TaskRabbit and Thumbtack easily and quickly through its feature-rich marketplace script.
Step 5: Building Supply
A marketplace has two sides customers and providers. When launching a marketplace, you need to solve the chicken and the egg problem i.e. how to get customers with less suppliers on the board and how to get suppliers with only a few number of customers.
Due to this reason, the best way to solve the chicken and the egg problem is to focus on signing up your providers. Some of the strategies include:
Contacting providers who are active in other marketplaces. You however need to be able to offer them something that is way better than their existing marketplace
Using Google or business directories to find professional service providers to create a completely unique marketplace
Finding people through online forums and Facebook to build a peer-to-peer marketplace
You can convince the providers to list in your marketplace by meeting them in person.Afterwards explain them the unique value proposition of your marketplace and receiving feedback on your offerings. You need to convince them about why your offering is better than the others by focusing on the trust factor between the host and the customers, or by offering discounts on signing up, providing exclusivity, communicating why you can bring them new customers and offering them benefits even when there are no customers.
Step 6: Finding Customers
While you are working on getting your providers on the board it is even important to communicate with your potential customers to give them access to your marketplace. You can create a simple email list to collect subscribers.
You can reach your target customers through Facebook groups, bulletin board or other channels. Think about who the major influencers of your target customers are and contact them, trying to make them your ambassadors.
You can build your own community through blogs, or by being active on social media sites, starting a forum, hosting offline events or a mix of all of these. Additionally, you can even use content marketing to attract customers by using SEO techniques. Subsequently sharing the content on social media platforms. Further get in touch with bloggers and influencers in the same field and offer to do guest post on their blogs.
Step 7: Launch
As an entrepreneur your launch date is crucial for you. Moreover, you feel that it is really important to launch with a bang. It is however preferable to let only a small group of customers use your marketplace at first, and test your process with them. Only when you are sure that your concept is working fine you should go on to a bigger marketing launch.
The goal of a marketplace’s marketing launch is to get customers and providers onboard. Later, facilitate as many transactions as possible during their initial days.
You can do your marketing launch through press, by having a good story and pitching it to the right journalists, writing for your specific target audience. Another way is to use the marquee strategy, i.e. getting influencers for building credibility with your customers. Online communities that are specifically dedicated to launching can also be used like Product Hunt.