Building an online marketplace now is easier than before and this business model has become quite popular even though business owners are ready to face some challenges. Usually, marketplaces offer lower prices and a wider range of products than traditional stores, that’s why eCommerce sales increase every year. However, many entrepreneurs are wondering where to start while launching their own marketplace. In this guide, we will check out every step on how to start a marketplace from scratch.
1. Invent an idea
It is necessary to start every project with the right concept. Before launching an MVP and buying the software, you have to fully understand what kind of marketplace you plan to create. Any eCommerce business should solve problems both for your customers and vendors. Investigate what your competitors do and what’s the key to their success. Also, you need to get feedback from your target audience, don’t ignore it before moving further. Get to know and conduct interviews with your potential customers and vendors. Try out SEO tools to analyze what your audience is looking for.
2. Determine your business model
There are 3 main business segments you need to choose from – B2C, B2B, and C2C.
B2C (Business-to-Consumer) – the most common segment used by Amazon, Google,
Facebook and Aliexpress.
B2B (Business-to-Business) – in this segment companies sell products/services (e.g. Alibaba, Walmart, General Electric, IndiaMart) to other companies and here the competition is lower than in B2B.
C2C (Consumer-to-Consumer) – sites where people can buy and sell goods (e.g. Craigslist, Etsy, eBay).
Choose a monetization strategy
Monetization is the main source of income for the marketplace owner. There are various monetization types available, the best way is to combine a few strategies based on your marketplace needs.
The marketplace installs a commission for vendors after every commercial transaction on the platform (e.g. eBay, Booking.com, Uber, Alibaba). One of the most popular models that can be successful for startups with a small audience.
It’s a fee that makes product/service visible on the website (e.g. eBay, Etsy)
This model is based on charging vendors for being in the highest positions in search results (Craigslist and OLX).
Membership fee (subscription)
It’s a good strategy for sellers of luxury products or services where users are regularly charged to get access to the platform.
An effective model for B2B and B2C segments that means paying for connecting the contractor and the freelancer.
Exclusive services (Freemium)
Here the basic features are free for everyone but if vendors want to fully use the platform, they need to pay some fee.
Variable commission and premium listing fees
There are also unfixed percentages for commission and premium listing fees. It allows some variability and attracts more clients.
Choose an eCommerce software
A good marketplace software requires a serious investment but it will have a variety of tools and functionality for vendors and consumers. You can hire a development team or a freelancer to make the best configuration of the marketplace software. Focus on price/functionality value, test different software, and learn users’ feedback (on Capterra, SourceForge, and G2)
3. Launch the marketplace MVP
MVP means the minimum viable product it’s the test version of your product with only basic features that gives you an image of your startup and helps to get feedback from the audience about the pros and cons of your platform.
4. Find sellers and buyers
In ideal, you should find them before launching a marketplace. It is important to create an attractive offer for sellers (both existing and potential ones). To reach customers, use a pre-launch campaign and make your business more visible through social media.
5. Promote your marketplace
After testing your MVP and attracting buyers and sellers, it’s time to launch the full version of the platform. Make all necessary improvements once you get the user feedback. Then, use PR platforms, promotional strategies, and advertising to promote your platform. To increase the revenue, create a feeling of an individual approach in your social media.
Every successful online business should be frequently monitored, it’s the best option to scale. Keep analyzing the most profitable business strategies and promotion channels that will take your marketplace to the next level.
Evermarket is an online e-Commerce service created by Evercode Lab that combines the best offers in one place, providing the buyer with a large selection of products (services), and offering to the sellers a competitive environment and new customers. It can be used in various economic areas: trade, education, medicine, etc. If you have any questions left, please leave your contacts and we will offer you a free consultation.