Startup Checklist for Successful Marketplace Launch
This article was originally published on Codica blog
The tremendous success of leading e-commerce giants like Amazon and eBay encourages business owners to invest in online marketplace development.
However, it is not the easiest task to launch an e-commerce platform without thorough planning.
In this post, we will discuss the main steps you should take to start a successful marketplace business.
1. Research and choose your niche
The important thing on your platform is the products and services you are going to offer to your customers. Therefore, your first step is to define what goods will be available on your platform.
Basically, you have two options: to build a horizontal marketplace or launch a vertical one.
Horizontal platforms provide customers with a variety of items. They can give business owners greater coverage. At the same time, they make it impossible to become a leader in a specific domain.
The first horizontal marketplace that comes to mind is Amazon. You can find almost everything there: from books to electronic devices.
Your second option is to choose a particular niche or user category. In this case, we are talking about a vertical marketplace.
Thanks to narrow focus, you can concentrate on key benefits and features of each available item. For this purpose, write more detailed product or service descriptions. They will attract new visitors and make your offerings more valuable.
2. Study your target audience
You have chosen products and services for your marketplace. Now it is high time to define who will buy them.
Think carefully about your potential customers, analyze their needs, and wants. Thus, you will be able to meet their expectations and evoke positive feelings from using your platform.
Besides, knowing the pain points and issues of your target audience, you can formulate a relevant value proposition.
Finally, this approach will make it easier to discover the most efficient communication channels, content, and marketing strategies. You will be able to create a successful promotional strategy.
The key factors to consider when researching your target audience:
- Age
- Gender
- Location
- Education
- Occupation
- Interests.
3. Select a business model
There’s no denying that you launch a marketplace startup to make a profit. The right business model helps achieve this goal. Your main task is to provide vendors with reasonable conditions.
Below you can see popular monetization strategies used by such big names as Amazon, eBay, and others:
- A commission is a part of each transaction made on your platform.
- A listing fee is paid by vendors publishing their items on the marketplace.
- A subscription fee means that sellers purchase access to your e-commerce platform
- An advertising fee is paid by third-party advertisers for promoting items on your website
- Lead fees mean that users pay to get detailed information about the desired item.
- Premium membership provides users with access to extra features and exclusive content.
We recommend that you start with one monetization strategy that suits you the best. Gradually, you can move to complex models. This way, you will help vendors make the most out of your e-commerce website.
4. Write a business plan for marketplace launch
If you want to start an e-commerce platform, a business plan increases your chances to succeed.
First, a business plan helps outline the overall goals and track the progress as the marketplace scales.
Second, this document reduces risks and allows you to foresee potential issues before they arise.
Finally, if you are looking for third-party investors for your marketplace launch, you will definitely need this document. It will prove the feasibility of your online marketplace business ideas in the long run.
When creating a business plan, consider the following points:
- Review of your business project as a whole;
- Your e-commerce platform description, including your goals and objectives;
- Description of products and services that will be available;
- Your target audience, the niche, and competitors;
- The online marketplace strategy and how it can be implemented;
- Your team’s organizational structure;
- Financial plan with a business model and projections.
5. Find a reliable co-founder
There are several reasons to find such a person.
First, usually investors trust companies with several founders more easily. It means that you need a reliable co-founder to get better chances for receiving the required funding.
In addition, the co-founder will help you make important decisions and divide responsibilities related to running a business.
For example, they can assist you in managing a specific project sphere. If you are focused on the business side, you can pick a person that will hire people or deal with technical aspects.
Before starting a partnership, make sure you have found the right co-founder. We would recommend that you consider their educational background, experience, and proof of their capacities.
As an option, instead of finding a technical co-founder, you can choose a reliable marketplace development team that will handle the technical aspects of building your marketplace. This article will help you choose the right development partner:
6. Search for compatible investors
It goes without saying that you need money to launch your marketplace. If you don’t have funds for financing your project idea, you will have to seek outside investors.
It would be a wise idea to attract professionals who may be interested in your kind of business. To find such investors you may attend events, conferences, and meetings they hold or attend.
You can also search for funders online. Visit specialized professional platforms, like AngelList or Crunchbase. The latter helps customize the filters to find the right depositor.
It should be mentioned that good investors can become a source of advice and strategy. With their help, your business will grow faster.
7. Protect your intellectual property
Don’t forget to protect your online marketplace legally. Define if you need to set copyrights, patents, trademarks, or special licenses.
Remember, that other people can make a profit from your ideas if you do not protect your concept. So you need to prepare the documentation that proves you own the assets mentioned.
Let’s take a closer look at each document:
The patent is a set of exclusive rights. Investors receive it for a restricted period in exchange for detailed public disclosure of their invention.
The trademark is used to represent a company or product. It can be a symbol, word, or several words that are legally registered. For instance, you need it to protect your marketplace name.
The copyright is a collection of exclusive rights granted to an inventor and spread over a literary work, song, movie, or software. For example, you can protect your website content, including articles, descriptions, etc.
The domain name is the part of a network address identifying its belonging to a particular domain.
Applying these methods, you can be sure that your marketplace is highly protected and is recognized by the courts and competitors.
Final thoughts
These are the key steps you should take before diving into online marketplace development.
For more information about starting an e-commerce platform read our full article: Startup Checklist for Successful Marketplace Launch: Part 1
For further reading, take a look at the second part of our materials on launching an online marketplace:
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