Life many before you, you want to create a digital platform that will revolutionize your industry. But on the other hand, it is no easy task, and there is no magic bean that guarantees success. However, these five unique elements will gear you toward building a thriving marketplace strategy that you’ll be proud of in the long run.
If marketplaces like Amazon, eBay, Fiverr, and even Airbnb could do it, you can. But, first, you must follow practices that ensure success and watch the magic happen. Here are the five elements that will get you started.
1. Serve a viable industry
Most marketplace founders make the mistake of focusing on a small niche and hoping it will blow up. When the reverse is the case, they start wondering what they have done wrong. It’s a no-brainer. When you focus on a small industry sector, there’s no guarantee that suppliers will sign up for your marketplace.
The reason is quite glaring since all the buyers know the suppliers personally and will not need your services or an intermediary. So why pay extra when they can go directly to their target? So instead, aim to build a marketplace in a sector with lots of suppliers and buyers, and you discover them by embarking on market research.
2. Define your offer
If you’re going to build a booming marketplace, you need to define what you’re bringing to the table clearly. How will your marketplace make a difference, and why should your target market choose you? If you don’t have a strong ‘why,’ neither will your target market have a reason to work with your brand.
Perhaps your marketplace will help them save time and money, get more buyers, and probably help them achieve a work-life balance. When you know your target market in and out, you will know their struggles, challenges, and pain points and use them to create an irresistible offer they can’t turn down.
For instance, a typical offer for a marketplace business could be along these lines:
3. The right business model
In a traditional setting, you factor in office rentals, warehousing, staff, cost of advertising, sales, and many more. But online, the game is a little different when building a marketplace business. It would be best to make a conscious effort to attract both supply and demand while offering suppliers a better and cheaper way to sell and buyers tons of items at great prices.
Take a look at some of the models suitable for a marketplace platform that you can leverage:
Commission-based model is probably the most straightforward and oldest marketplace model where you charge a flat fee for online transactions. However, this model is slowly becoming obsolete due to the likes of Uber, and more complex models are replacing it.
> Sign Up fees
It is a pretty easy model where you collect a flat payment from your sellers who wish to sell through your digital platform. With this model, you don’t even need complex payment gateways to begin. But, first, make sure the signup fee is affordable and feasible for the best outcome.
> Product/service listing
This model might not work in the early stages while your platform is still gaining traction. However, it is one of the more accessible revenue models to implement. In this model, your sellers or suppliers pay a certain amount to list their products or services on your platform.
> Commission + Signup + Listing + CPC, etc.
Some marketplaces have become behemoths, offering multiple options to their vendors or suppliers. A good example is Amazon and Alibaba, which allows certain users to use their namesake in exchange for a steep commission plus guaranteed sales.
You don’t necessarily have to implement all these business models at once, which could be overwhelming. Instead, you have to listen to your community and understand the ideal business model.
4. Build a 10x better product
Unless you’re a monopolist, other marketplaces probably do what you do. But when you build a platform that is 10x better than your competitors, you will succeed simply because:
- You’re offering the best products from the best suppliers, with unique prices and tons of perks
- Have the best solution for your suppliers by giving them all the tools and exposure they need to succeed.
- A great-looking marketplace that disrupts its niche and offers a great customer experience.
For this to happen, you need to work with a savvy team that understands your niche and is ready to experiment and explore. With the help of cutting-edge technologies, your team will develop the right sales, onboarding, marketing, and pricing strategies that appeal to your platform users.
That entails making sure that buyers can easily transact without errors or glitches. As you advance, you need to maintain balance in your marketplace by ensuring that there are enough sellers to handle the ever-growing customer demand.
5. Build trust and grow
To attract the first sellers and buyers to your platform, you must comply with trust-building mechanisms. Depending on your industry and marketplace, your users must feel an overwhelming sense of trust if they must deal with your business.
For instance, pictures and videos will go a long way to compel buyers to take action. So, ensure your marketplace has the feature to show as many pictures as possible. If your platform deals in high-end products like cars, and boats, focus more on the unique features via a video explaining the features.
Another trust builder you should consider is in-depth reviews, especially for high-value products. And when it’s time to pay, third-party platforms like Stripe or Paypal are best as your users will feel safer using these payment platforms.
When you succeed in building trust in your marketplace, you keep buyers and sellers engaged. As a bonus, Google will give you some traffic juice by ranking your platform high on Google SERP.
Building a thriving marketplace is no easy endeavor. But with the right talents, you wouldn’t have to worry about growing and scaling your platform. These talents could be influencers, affiliates, or content creators who don’t have a company of their own but are helping you grow your marketplace.
In that case, how do you pay them with taxes and social benefits declared? If you have over 100 influencers, affiliates, or content creators, do you wire them the money or what? That is why companies like Tidyapp, Ksting, TaskRunner, and many others use Gigapay for instant payment.
It’s fast, easy, and will save you tons of time, money, and headaches. Feel free to book a demo, and we’d be happy to show you how easy our payment system works 🙂