5 Steps to build a unique marketplace
Building a marketplace can be a lot trickier than you might think because the marketplace has to onboard both sellers and buyers, so probably the question arises who is to be targeted first.
Marketplace implies that you have a group of sellers and buyers coming together to buy and sell products or services. In the beginning, a marketplace finds a niche that it can find its foot on.
Sellers always try to sell their products, but customers on the other hand are cautious in their buying choice. Who’s to be promoted is a clear puzzle, but there isn’t a specific answer. And it depends on the kind of marketplace that you want to start.
Different types of marketplaces
Several marketplace models are out there, but among them following are the popular models that entrepreneurs choose.
- B2B Marketplace- Business to business is the expanded form, and it is the buying and selling of products and services that happen between businesses. Eg. Alibaba.
- B2C Marketplace-Business to Consumer transactions of products happens between businesses to consumer. These marketplaces focus on marketing their items for individual users. Eg. Flipkart
- C2C Marketplace- A marketplace where buying and selling of products and services happen only between customers. This marketplace concentrates on connecting customers with one another to boost sales. Eg.: Etsy
How to create an online marketplace?
A well prepared plan should be formed before starting an online marketplace. A good planning will help you reduce the time, effort and cost needed to the marketplace. And now it’s easier with a slew of solution providers waiting in line with effective solutions. Making inroads in the early stage of the business decides the success of your marketplace. This depends upon the model and niche of your marketplace.
- Study business environment
- Select your niche and business type
- Build your marketplace
- Market your business
- Get your business up and running
Study business environment
You have to carry out an extensive research to find whether the market can carry the weight of your new business. Studying the business environment is important. you can either conduct an extensive research by collecting samples from people related to business, or you can do a SWOT analysis .Understanding the buyer’s behavior helps the business in a big way. Segmentation and targeting can also be done to find out exactly what your business wants.
Pick your niche and business type
It’s just like a bird alighting on a branch. After conducting your research, you have to choose which area that you want to focus on. You can’t fly here and there. For instance, Amazon started as an online bookstore. Think over it! Whether you want your marketplace to have either products or services or serve both. There are many marketplace models (B2B, B2C etc.) out there from which you can choose yours.
Build your marketplace
Visibility is the best first step towards creating a lasting impression on your customer. Secondly, the user experience that you provide to your customers. All depends on what service you opt for like cloud based software, proprietary software and much more. Each has its own advantages and disadvantages. Proprietary software and open source software are fully customizable, but on the other hand it may take longer time to get your market place up and running. Cloud based solutions are more cost effective and easy to set up.
Market your business
Marketing is an integral part of any business. In marketplace, campaigns include economic incentives to attract customers as well buyers, staging large public relation events and use of traditional marketing tools, such as advertising, social media advertising, publicity and much more. These marketing strategies aimed at bringing more customers and sellers to your platform. The type of marketing strategy that you use should be dependent on the type of marketplace that you own.
Get your business up and running
Once you find a foothold, you can launch your marketplace. But you are not done with it. The major problem faced by any marketplace owner is whether they should up the sellers or customers. One way is to onboard sellers first, and provide them with a little incentive to stay on for some time until your business picks up the demand.
Pricing: Numerous pricing models exist for the marketplace. Generally followed one is the commission model where the marketplace owner takes commission of each sale happening on the marketplace. Sometimes the commission is fixed based on the product category. Second most popular pricing method is subscription based pricing. In this model, commission is charged based on the number of products listed on the marketplace by each seller.
