Bringing together multiple providers and customers is a tried and tested way to raise capital. The inspiring examples of websites like Amazon, eBay or Shopify attract and encourage: these days, entrepreneurs are able to set an entire industry on fire with a high-quality web software solution.
However, a prominent idea means nothing until it is turned to reality, and the importance of an online marketplace launch appears. This is not a piece of cake as the industry is full of myriads of eCommerce platforms. Some of them have the potential to succeed; the others slowly die with no chances to attract the interested audience. Today, we are going to open the curtain to marketplace development, its basic stages and valuable tips. It is time to catch the hype and build a marketplace, so waste no more time and take the first step towards your success.
4 steps towards online marketplace success
Although software development process consists of numerous components and many repeatable iterations, we defined 4 basic steps of the successful marketplace launch. We created this chapter to save you from the unnecessary details but at the same time, it provides you with all valuable information.
Step 1: Prepare
There is a good old quote about the significance of a proper preparation: “Failing to prepare, you are preparing to fail”. This step may seem simple and meaningless but it actually builds the ground of a product. And the stronger ground you’ll build, the easier it would be to proceed with your great idea realization.
Clarify the things inside your head
Taobao value raised up to more than $515 billion in 2018. The sum is huge; however, it is not enough to provide your business partner with a requirement like “I want to run a marketplace like Taobao”. You need to:
● Define precisely what types of products or services want to post on the pages of your marketplace;
● Create the list of services and features you would like to offer;
● Decide which business model to employ.
Last but not least, just take a piece of paper and transmit your thoughts to it: let it be a simple sketch of your idea. Keep this sketch until the successful launch – you’ll be proud of the idea transformation.
Know your rivals
The eCommerce market is massive, and the number of online selling platforms is huge. Thus, you must know as much as possible about each competing organization. Find out if there are similar marketplaces in your niche or in your specific region, get to know them and turn their mistakes to your own advantages.
Highlight the uniqueness
In order to succeed, you have to offer something unique. People won’t just bring their money to your marketplace because the company is young, bright and promising. Customers are looking for better products, better prices, and better offers. First and foremost, identify your unique features, work on their improvement and emphasize them in your marketing and advertising campaigns.
“Chicken or egg” problem
The potential buyers don’t come to a marketplace unless there is a big number of products presented. On the contrary, sellers and service providers won’t pay for listing on your website unless you’ll be able to demonstrate a potential customers base. You need to find a solution to this problem, too. Attract the audience step by step, organically increase the number of customers and connect them to the providers. It will be hard at the beginning but with a well-thought plan, you will overcome this obstacle soon.
Step 2: Foresee
On the basis of your initially developed plan and the tendencies in the eCommerce industry, try to look into the future. What do you see there? How would your marketplace look like right after the launch? Or 1 year from now? Or 5 years from now? Here are several tips on how to build a forecast:
● Set the time frames of marketplace development;
● Define a revenue you would like to reach in 6 months, 1 year, 3 years, 5 years;
● Analyze the target market and define the average number of marketplace visitors, active buyers and product providers;
● Conduct a research a investigate the reasons online marketplaces fail lately;
● Make sure you are in a safe distance of any pitfall that may lead to a knockout.
The forecast helps to build a better vision of your product, improve software development and strengthen the entire B2B business.
Step 3: Build
We can also rephrase it: find someone who can build the marketplace for you. There are several ways to start working with a development team:
● Hire in-house IT engineers;
● Find someone experienced on Upwork;
● Sign a contract with an outsourcing company.
Keep in mind that the in-house team may cost you a fortune and, in many cases, freelancers are extremely unreliable. Thus, outsourcing is the most advantageous option.
Whom do you need in your core team?
● Experienced designers to make your marketplace look attractive;
● Back-end developers who are responsible for the server side of the product;
● Front-end developers who are able to deliver a lovely interface;
● QA engineers, or testers, who can make sure functionality looks and works properly.
Additionally, you may need:
● A stress resistant experienced project manager with a technical background;
● Business analyst to find out whether the launched solution has the potential to succeed;
● Marketing specialist to drive your product’s popularity.
Choose your development partner wisely: this is the cornerstone of your success.
Step 4: Grow
Once you’ve got an up-and-running marketplace, your to-do list changes. Now, it is time to focus on promotion and user satisfaction.
Collect feedback and fix the imperfections
Perfect solutions don’t exist. To find out what users think about your marketplace, reveal the bugs and fix them.
Develop brand and trust
Let the reputation be a priority. Make sure you promote high-quality goods only, take care of your brand online appearance (including social media channels) and build trustworthy relations with both providers and customers.
Measure the results
There are multiple metrics you may find useful. We would like to recommend the following:
● Net revenue;
● Liquidity;
● Average order value;
● Bounce rate;
● Percentage of repeatable orders.
As your marketplace grows, collect more statistics and build your business improvement program upon their results.
In conclusion
The earlier you start working on a perfect marketplace, the earlier it will bring benefits and revenue to you. In a world of intense competition, it is crucial to present your idea and product as soon as possible and start acquiring potential users even before the marketplace in production.
Do you need a helping hand with development peculiarities? Or are you looking for more tips and tricks on how to become an eCommerce leader? Just drop us a line and let’s find a straight road to success together.
