5 Steps to Build a Successful Online Marketplace?

Ever wonder how sites like eBay or Etsy became so popular?  As with the majority of websites, the flood of traffic they currently receive daily didn’t grow overnight.  With the right amount of preparation and strategy, you too can create your very own online marketplace. Don’t believe it? Read on!

What is a marketplace? These are platforms or websites that have two distinct user groups that rely on one another for goods and services (examples: users and sellers on eBay are two separate markets).  Because these sites can be hard to develop, we would like to address this challenge by supplying you with a few helpful tips.

In order for buyers to purchase, you need a lot of options and products, meaning sellers.  In order to attract a large crowd of sellers, they want to know you have a decent amount of potential buyers. Starting out, you are looking at zero on both sides.  But don’t feel bad, this is where everyone starts! Even though it is a difficult business model, it just needs a bit of insight and real effort to turn it into an effective online business.

The Marketplace ‘Chicken and Egg’ Dilemma

Your initial users will be fueled by site activity.  Users will not just come and sign up on your site if it looks like a ghost town. Users are looking for a site with products and other users.  Buyers will not purchase from your site if it seems obscure.

At the same time, suppliers will be hesitant to add inventory if they do not see a large pool of potential buyers.  This being the case, how do you successfully grow a double-sided online marketplace? It is at this stage that businesses fail, become overwhelmed or think they have reached a brick wall.  This is unfortunate because it is possible to overcome this hurdle, but it just requires some additional effort.

Making a successful Marketplace

For starters, you will need to get your supply side in order first. This usually entails a very targeted effort. Besides research and sending passive emails and attempts, do yourself right by going further than expected.  Make it personal, direct and most of all, really. It is very easy to pass up an email or message.  Over the phone or in person communication requires that you are heard.  Best of all, if you are good on your feet, you can have solutions to any and all concerns, answer any questions, and offer insight to make your point.  Some sellers may be very interested to work with you.  In fact, a lot will jump at the chance to make additional money.  However, you have to be prepared to speak and deal with sellers that are possibly already successful.  You may find that some products and sellers with give you a lot of attention and traffic from buyers.  It is important to successfully handle these and land them.

1. Make It Different

Does your site have a strong focus? Although there are many different types of marketplaces and ecommerce websites, you can still have an original site idea.  How? Through the niche market that you choose and what your site can provide.  Examine and research your surroundings to find an unmet need.  Should your site be local or community based? What types of users do you want to cater to? What are their needs? What about suppliers? Is there a way to connect the two?

Recently in Chicago, a woman decided to create a business selling cancelled weddings!  Instead of all that money going to waste, she buys the entire wedding at a heavily discounted price and resells it to couples that have expressed an interest in getting married on the fly.

Contemplate the possibilities to find your best opportunity!

2. Start with Sellers

After you start your site, you should first focus on acquiring sellers. Usually, this is the easiest starting point.   The first time a buyer visits your site, it would be ideal if the experience was positive enough to increase word-of-mouth and tell a friend or two.  If the buyer leaves due to lack of inventory or disappointment, not only is your site not worth mentioning, but the visitor will also never come back.

However, with the right value proposition, sellers will have little reason to deny featuring products and joining your site.  You could pose a limited time offer, perks or a negotiation based upon future variables (such as traffic, ads or sales).

3. “Fake” Users and Products are Okay

Ever hear of faking it until you make it? While this is not a long term solution, or directly profitable, you should create a few user profiles or fake accounts to start off with while recruiting those closest to you to join your site. This should give you at least enough users to not be a vacant site, which is the bare minimum.  Consumers act as bait for sellers and vice versa. You need something to offer. For instance, if you have eSwap (the swapping and bartering site), add some high value products of your own to encourage users to add their own products for lower prices.  Adding high value items will also attract quality sellers and buyers to your site.

4. Start Creating a List (and make the calls!)

While growing your site, be sure to find a way to acquire customer information such as addresses, emails and phone numbers. Whether this is due to an ebook offer, survey, trial, contest or other type of promotion, you should encourage your visitors to someone submit their information – even if they are not directly registering with your site.  After acquiring this list, you can then reach out to specific target in the future. This doesn’t require much – just a strategic plan and proactive follow up.

5. Make Your Own Strategies

Besides working your list, develop another strategy to aim at your market.  You cannot rely solely on SEO and Google Ads.  Although it is helpful, you can’t control the price of ads or compete on some of the major (and expensive) keywords.  Just because of this, the game is not over.  Take control of your own success by creating your own strategies. Provide something valuable to your audience. Make it bookmark and blog worthy.  This will make you more competitive and help your brand get noticed.

Final Thoughts: Use and all-in-one Marketplace software

With a variety of appealing products and solid sellers, your buyers will follow.  This flywheel effect will benefit your business and help it grow.  Software like iScripts MultiCart is already built specifically for online marketplace development.  If you have a domain and hosting account, you can easily install this software on your server and build an online marketplace within just a couple of days.

The software can be customized for your specific business and already includes everything you need like payment gateways, coupon code, and gift card functionality, product pages, seller and buyer panels and a lot more. After that, focus on gaining your sellers and products to get your business started off right.