Tips for creating a marketplace
Are you considering creating a marketplace ? In that case, you should consider certain keys to make it successful. In this article we tell you the essential aspects for a marketplace to work well. If you can “cross out” all these elements from your list, your marketplace will be ready to work.
WHAT IS A MARKETPLACE?
In other articles we already explained in depth what a marketplace is , but we are going to give you some brushstrokes to introduce this topic.
An online marketplace is a web or app that connects sellers with buyers . The owner of the marketplace does not have inventory, since his business is none other than being an intermediary facilitating transactions. Some examples of marketplaces are eBay, Etsy or AirBnB (or even Bla Bla Car!).
These platforms are very useful for buyers, which has meant that the number of existing marketplaces has skyrocketed in recent years. They are like shopping centers 2.0. More and more people want to do business with them, either by selling on Amazon or eBay or advertising their services on any of these platforms.
Users can access all sellers inventory, online and without leaving home. Likewise, the marketplace does not have to own any product or service, but simply puts one party in contact with the other. For the seller, these tools are useful because they usually receive more traffic than their own e commerce. For buyers, marketplaces are an option that gives them confidence and facilitates the transaction.
TIPS FOR CREATING A MARKETPLACE
MAKE IT EASY TO FIND WHAT YOU ARE LOOKING FOR
For users, one of the main advantages of a marketplace is to easily find the product you are looking for. Your platform should quickly show the result that your user needs.
This does not only mean to optimize the search engine. You should also work on recommended or complementary products (promoted items, cross-selling, up-selling …). This aspect is key to increase the average ticket and get more benefit in each sale.
A BALANCED SUPPLY AND DEMAND
When creating a marketplace, making it self-sustainable is essential . You must work in that there is a balanced relationship between supply and demand, without any of these exceeding.
The price is one of the decisive factors by which a user decides to take an alternative route and go to the competition. However, there are times that we lower prices so much to reach those users that our margin goes to waste. We should always maintain a prosperous profit margin.
Keep in mind that you will need several tests to optimize this variable!
TRUST AND SECURITY
Although Internet users increasingly rely on online shopping, it never hurts to give them a “nudge”. The systems of verified reviews are one of the most effective elements to enhance purchases.
Different marketplaces, such as Amazon, eBay or AirBnB use the reviews, and have verified the ability to multiply the conversion. User reviews are key when evaluating different buyers and guiding users towards the most appropriate ones.
MOBILE FIRST DESIGN
We are not going to explain to you how important a mobile first design is. The use of mobile devices has skyrocketed in recent years, and having a responsive website (or a powerful app) is basic . And yet, there are still businesses that are not ready to operate on a mobile. If you want your marketplace to reach the users it needs to reach, create it thinking of mobile.
THE CHICKEN AND EGG PROBLEM
We have already named the importance of supply and demand. In the marketplaces, this can become an egg and chicken problem. Why?
When you have a marketplace, it is difficult to start. Beyond the technical needs, you will need to concentrate on a single platform a balanced number of buyers and sellers. However, where do you start? Attracting sellers without buyers is complicated. And vice versa! Which user will go shopping at a marketplace where there is no offer?
One way to solve this problem is to focus on a very specific market niche . It will be very difficult to attract users and sellers to an overly general marketplace. On the other hand, if you focus on a very specific product or service, you will receive fewer users but more willing to spend money. Once you start having a higher volume of traffic, you can gradually expand your offer and be less specific.
Also, we recommend that you focus on creating a community on social networks. It is not even necessary that your marketplace is already working. Share interesting publications related to the sector of your platform, and see generating community and engagement from the minute 0. This will help you to convince sellers to register on your platform, because those followers on social networks will be potential buyers once you launch your website.
These are some important tips when creating a marketplace. However, there are many more and nothing is simple. This online business model is hitting very hard, and many start ups are choosing it. Do you have a marketplace? What advice would you give to someone who wants to create a platform of this type?