The Covid-19 pandemic has created a dramatic change in the way we lead our lives. People have completely transformed the ways they work, learn, buy, and engage socially.
Retailers today must be agile and flexible in how, when, where, and even why they sell. Any seller who wants to grow his business can’t ignore the elephants of the eCommerce jungle – The online marketplaces.
We have compiled a list of top 3 companies which provide world-class eCommerce software.
The beginner’s guide to starting an online marketplace:
Even the most promising ideas can fail to generate traction and close down shortly if your business model is not right.
Why start a marketplace in the first place?
There’s a high possibility that you have bought, booked or sold stuff via a marketplace platform this month without giving it a thought.
That’s because they span all industries – from large traditional online malls like Amazon and AliExpress to booking and rental platforms like Airbnb or Eventbrite, from service marketplaces like Upwork and Taskrabbit to digital software and asset marketplaces, gaming and music platforms and everything in-between.
Sustainably growing a traditional eCommerce business requires you to be in the “Goldilocks zone” where your free cash flow, operating expenses and inventory sync up. Otherwise, you can end up growing yourself out of business.
For example, if you have an eCommerce business selling mobiles online, you can grow more rapidly by switching to a marketplace model and allowing others to sell their mobile accessories on your platform.
Wondering what marketplace is the most ideal?
As per our research, the most trending and underutilised category of the marketplace is the freelancing marketplace like Upwork and Fiverr. You can connect freelancers offering sales, marketing, content creation services with people looking for talent. Customers will appreciate getting these services virtually while they are spending most of their time at home.
How to start your marketplace?
1. Research your target market:
According to CBInsights, “no market need” is the #1 reason startups fail (42% of all cases examined).
“Starting an online marketplace without clearly understanding the target market and the needs of your users is a great way to learn a painful lesson, but not a great way to start a business.”
To build a viable marketplace business, a clear understanding of the market, users and their needs is of extreme importance as it lets you gain insights into the marketing strategies and the business models common in your target market – as well as the strengths and weaknesses you can exploit.
Start with simple questions:
- Who are your target users and what are their main goals and challenges?
- Where do they buy, why do they buy and whom do they buy from?
- What are their motivations and what influences them?
Asking these questions will help you better understand your user needs and the strengths and weaknesses of your competitors – and build a better solution as a result.
2. Choose a business model:
Building a valuable product that people need isn’t enough. You need a way to make it profitable – and keep it profitable in the long run.
You’ll charge your sellers a selling fee each time they receive and process a new order on your platform as it’s a great monetization strategy. The more orders your marketplace receives – the more revenue you get in sales fees.
You can collect a listing fee from your sellers when they list their items for sale on your platform. Similar to them, there are many other models, which require in-depth research. Pick a model most suitable as per your business strategy.
3. Plan your operations well in advance:
Creating an online marketplace website is one thing. Successfully managing a marketplace business is something completely different.
First, you will advertise and attract sellers to join your platform through your unique value proposition.
Make it really easy for new sellers to get started on your platform by offering them a way to import their existing products in bulk or providing them with an onboarding service where you do it for them.
Keep in mind that you may be responsible for payment taxation, invoicing and reporting as a marketplace platform owner.
4. Draft your essential features:
“The easiest way to waste time, budget and effort when building an online marketplace is to create features your users don’t need.”
While some of this will depend on your industry, we have three big categories:
1. Features for sellers: Your sellers want to sell their items and get paid. Give them features to list, sell and dispatch products efficiently.
2. Features for buyers: Make it easy for your buyers to search for products and browse categories along with single click check out features.
3. Features for the platform:
There’s much more you can offer your users down the road:
- reporting tools
- advanced selling and marketing features
- integrations with third-party eCommerce services
- your mobile apps and more
5. Select the right software:
How do you choose the right marketplace software?
The possibilities are endless, right?
Start with the type of the marketplace you’re building. Are you selling products, services or bookings? Know the features your platform needs. Make sure the solution fits your business requirements –in terms of payment processing, logistics and other crucial features along with user experience. And if it doesn’t offer the feature you need, can your team modify it to support this?
If your marketplace feels clunky to use, the rest doesn’t matter – your users will jump ship as soon as there’s a better alternative.
Get to know the team behind the solution. Who are the people in charge and what can you expect in terms of technical support and code quality?
Start building your marketplace now
“No matter what you do – never stop learning, experimenting and getting better.”
All this makes us at JungleWorks confident that the world continues to offer ample opportunities for marketplace businesses, now and in the future.