Why are startup investors going tosh upon online marketplaces? What exactly it is? How to get started with it? Yes! We are going to help you out with a fair idea about this whole concept and how you can build a successful Online Marketplace!
Online marketplaces are sizzling hot in town. The success rate of such platforms like Airbnb, Etsy, eBay, Amazon, Craigslist etc., has proven Marketplace Model to be very scalable and can be applied more or less to any area of business.
If others are making gold out of coal it doesn’t mean that it would be a cake walk for you too. It is true that Online Marketplaces are becoming industry eaters day by day but it is not a sugar coated easy way for sure. Being an entrepreneur you need to be very focused, calm and sorted about your plans and how you are going to execute them with a mindset to welcome any possible outcome. The first generation of online marketplace companies witnessed a few big straight marketplace winners like eBay and Craigslist. However, this is just a beginning as entrepreneurs are enduring to create the next generation of Online Marketplaces. There’s no better period to turn out to be a marketplace entrepreneur. Let us begin and explore this stream of business:-
What is An Online Market Place?
A marketplace is just like it sounds. It’s not a solitary store. It’s an assemblage of stores where Customers breeze in and can browse goods from several different vendors and compare them. It is a platform connecting buyers and sellers of a particular product or service (coming from multiple vendors, would they be brands, shops or persons). The marketplace holder is in authority for attracting customer and keeping track of money transactions and third party vendors deal with manufacturing and shipping. Let us now jump on making an online market place.
So there are three different yet equally prominent phases of building your online marketplace:-
- Getting Started with the Idea
- Building the Platform
- Launching your Marketplace
All these three steps are meant to be followed in a harmony by keeping the former step in accordance with the current one. You need to explore and understand each phase. Let us explore each phase briefly.
- Getting Started with
Know inside about the marketplaces, and what kind of marketplace you want to design. This the phase where you should not be worried about anything else and should just focus on finding your idea and validating it with actual people. Do as much research as you can on the similar models. Study deeply the other platforms which are similar to your idea or are inspired in any kind of way.
Before getting busy in developing your marketplace you should understand your personal motivations: – why, what and how. Here are few questions to ask yourself:-
- Why do you want to build a marketplace?
- Is it because you are tired of working for another company?
- Or you want to save the world?
- Make tons of money?
- Or build a profitable side business? Or whatever the reason is
Articulating your factual motivations for being an entrepreneur is important because your strategy will depend on them only.
- Figure out what it is that you’re planning to build?
- Are you really passionate about a particular idea?
- Or you are looking for a profitable niche?
Passion is the parameter to check the success rate- the more passionate you are about the theme area, the more likely you are to flourish.
- Building the Platform
Now that you have validated the basic business idea for your market place you can start building your platform. Firstly you need to figure how to build your marketplace platform.
- Do you know how to write code? If not,
- Do you have money to hire developers?
- Do you have a prior familiarity of running a startup?
- Do you have previous experience in the target market?
- Do you have co-founders or are you alone?
All these questions will help you to design the best strategy for developing your basic idea behind the project. There are basically three ways for building an online marketplace:-
- If you are capable of coding your dream into a working platform then code it from scratch yourself.
- There are available software and open source code for existing platforms- you can use them to build your platform.
- If you want to keep it simple and focus on the marketing strategy to launch it as soon as possible then you can pay someone else to build it for you.
Modern marketplaces employ many diverse models. In general, the best option for most marketplaces is- “own the transaction” & charge a commission (from all purchases made through the site). It is a very scalable approach and often times proves to be fairly lucrative. Once the model is selected building the platform would be easy. Time to Market should be your prior concern at the time of finalizing the ‘way out’ you want to take from the above mentioned three ways to build your platform.
- Launching Your Marketplace
So once you have sorted building your platform you need to launch it. But launching takes a lot of planning indeed. It is more convenient for marketplaces to follow a node-saturation strategy which is a go-to-market strategy based on solving small, proportionate pains to gradually accomplish the long-term goal. For example, when Uber started their set-ups, they were an exclusive on-demand transport service for the posh community of San Francisco. However, it was just a go-to-market strategy. Subsequently saturating that node, they moved to different segments of supply/demand, across the globe.
Throughout every phase of the project, your key goal should be to develop and launch a Minimum Viable Product (MVP) as soon as possible. It will help you validate your marketplace idea without taking a big risk and investing lots of funds and resources.
Test your product before the launch with apt feedbacks from the trial users. You should observe the results at the early stage of launch and be interactive with the users to note down the areas for improvement.
Let’s Get Started!
We have tried to cover the most important things you need to know about, before starting your own Online Marketplace Business. You need to be clear and crisp about the idea and then accordingly finalize the model for the platform with a dedicated resource to build it and then try to launch a Minimum Viable Product (MVP) as soon as possible. It’s time to start building!
Here are successful establishment stories of Online Marketplace with amazing time to market track approach.