How to Create a Successful Online Marketplace
A marketplace is a platform that allows you to sell goods or services directly from a supplier to a client. This trading format greatly simplifies the trading and buying process.
Online market success is based on healthy supply and demand. Effective communication is possible when both parties in the process understand the importance of the marketplace. This is what forms a stable market with high viability.
The basics of building a successful marketplace
The product must match the market
The empirical method is used to develop a product that matches the market and to conduct an accelerated iteration of a non-viable product (MVP).
Through the use of advanced prototyping, it becomes possible to obtain customer feedback in an accelerated manner. This reduces the risk of losing your budget as if it were a real marketplace.
You should also conduct a thorough competitor analysis and evaluate suitable platforms that are already operating successfully. This will allow you to better understand the market and develop a competitive product.
Going to market: strategy and preparation
According to data, more than 30 000 new products enter the market each year, and 95% of them fail.
Therefore, it is important to think carefully about the go-to-market strategy. It includes a number of tasks:
- define the target market;
- create the perfect portrait of the buyer;
- conduct a thorough analysis of competing companies;
- work out the value of the product;
- create a detailed plan for the buyer’s journey;
- define a business model;
- designate a technological stack;
- define marketing and sales channels;
- describe the customer success process.
Profit and its flows
Revenue streams determine how you monetize the marketplace, how you, as a business owner, will benefit. The most common are:
- subscription and commission fee;
- listing fee and shareware.
After conducting a comparative analysis of a similar marketplace, you can accurately choose the right monetization option.
Measurements and Statistics: Metrics
Metrics enable vendors to receive comprehensive analysis that reflects the interaction of the buyer with the trading platform. With the help of metrics, an entrepreneur receives information about customers, which is created by transforming observable data.
Application of technologies
The ultimate freedom of the entrepreneur is due to individual development. In the short term, this approach provides flexibility that makes it easier to create an MVP. This will make it possible to make accurate measurements and improve the product’s fit to the market.
In the future, this approach will allow you to scale and not experience the difficulties of accelerated growth. In addition, the necessary extensibility will become available, providing integration with important functionality.
Distinctive features and functionality
Along with your value proposition, your marketplace’s capabilities need to be explored and tested.
Note that too many items can be confusing and difficult for the user. At the MVP stage, it is better to give up frills.
User security is the foundation of trust
This factor is as significant as the product’s relevance to the market. A high level of trust is formed on the basis of many factors. Simplification of the delivery and ordering process, effective feedback, and positive customer experience are the main ones. They instill confidence in your market.
Having a clear technical SEO strategy and implementing it will attract high-quality traffic. In addition, this planning side will help increase the volume of free traffic.
Available network effects
Network effects are critical when it comes to the buyer-seller relationship. They allow you to track user behavior and apply rapid iteration to determine if the product is in line with the market. Thus, you will be able to meet the needs of the target audience qualitatively.
The complex business environment fits perfectly into the marketplace model. Small scale saves money by reducing costs. In parallel, network effects help create exponential growth. The existence of all these elements, combined with the presence of protective ditches, makes this business model unique.
This trading format improves logistics, leads to more efficient use of data, increased supply, transparency, and easier cross-border expansion. A particular advantage is individual customer satisfaction.