Are you wondering how to create an online marketplace in today’s ‘internet era’? It helps you be at the ‘center’ of the action and benefit from the growth of the entire online ecosystem.
Below are the questions that you need to ask yourself before starting out with the same.
How do I Start an Online Marketplace
First of all, create a broad structure of what would be your e-marketplace, like sellers, buyers, products, commissions, geography, political situation, competitors, buyer behavior, seller behavior, etc. To sum up, you need to have a clear marketplace model.
The objective to start an online marketplace must also be set at this stage.
What Items Would be Bought and Sold?
Secondly, list down the structure and the types of items that would be bought and sold in the marketplace. You have to stay broad at this stage but later on, have to go very deep to get each and every major/ minor details of the products being sold.
Who would be my Sellers & Buyers?
Next is to figure out what would be the optimal Seller and Buyer profile. Where are they located, what do they look like, what is their age/income/gender, etc. In short, this is called end-user development.
Building an Online Marketplace
Before you start building an online marketplace, analyze how the sellers are currently selling their products. You need to know your platform. How do they reach out to their customers?
Do they have any alternative online websites/apps where they can list their products or they are using traditional means? What online marketplaces are in trend now? How big of a team you may need and do you have people management skills?
How Do the Buyers Buy in the Existing Situation?
A similar study for the buyers also needs to be undertaken. This will also help us keep an eye on the competition and substitutes. How to make your online business? Create a list of your thoughts.
Current Pain points & Frustrations of Sellers/ Buyers
Once the seller and buyer’s current behavior is studied, the next step is to map out their journey and figure out what are their greatest pain points and frustrations with the current experience that they are facing.
Pros & Cons of Creating a Marketplace
The next steps will be to list down at least five pros and cons each of shifting to your marketplace. The sellers and buyers will be motivated only if the pros are having much more weight-age than the cons that give the sellers & buyers enough reasons to change their behavior and make a switch.
How Would I Acquire Sellers & Buyers?
Once we have analyzed the sellers and buyers enough and understood their pain points, next is the strategy to acquire them.
Note that for our online marketplace to thrive, it must always have an ample amount of both Supply and Demand. Failure to acquire any of the two will result in the marketplace slowly dying out.
How do I Monetize my Electronic Marketplace?
Once you have planned out how to create value for both suppliers and buyers, it is time to start looking for how to make money. There can be several revenue sources and strategies that can be taken up.
Point to keep in mind is that business objective & seller/buyer analysis must be kept in mind to create the monetization strategy. For example, in case the Sellers are not ready to adopt the marketplace, they must not be charged any upfront fee rather they must be charged on the per transaction basis.
Think, maybe you need to take a course to learn about pricing models?
How do I Engage the Seller/ Buyer Once They are on My Platform?
Once the sellers & buyers have already arrived, start thinking about how to keep them motivated and engaged in the platform. They will only stick around if they keep getting value from the system in the long run. The value provided must also be differentiated and certain lock-in mechanisms must be in the place that keeps them hooked.
For example, the Sellers can get access to data & analytics related to their sales. More data that is generated makes them more glued to the system since it will take time for them to generate some insights elsewhere.
How Do I Retain & Delight my Sellers/ Buyers?
Once the sellers & buyers are engaged, next comes in the strategy & tactics to delight them so that they become users of the platform for the long term and be ready to pay more if asked for. They must also turn into ‘evangelists’ who would expand the ecosystem bringing more users via word of mouth and referral activities.
To conclude, I believe – building a marketplace is all about ‘speed’ and ‘execution’ since the entry of any new player is easy and big corporations will always have an edge as they have more resources to pump in. Strategy to mitigate the ‘onslaught’ of Big corporations will be the topic of my next article.
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This article was originally published at Linkedin