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How to Build a Successful Online Marketplace from Scratch?

  • Friday, April 5, 2019
  • 4 Min Read
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The latest topics of interest in digital commerce trends seem to be Marketplace integration and API based commerce platforms. If one is the owner of an e-commerce business, and one is wondering how to get these strategies to be translated into technology and operations, this article can help one build the best online marketplace. An online marketplace is a virtual space wherein the sellers and buyers sell and make purchases respectively. This exchange, of course, occurs in the presence of a marketplace operator.

The operator measures the success rate of the marketplace by the total number of deals and transactions that take place between the buyer and seller. The reason for this stands like that for every transaction, they receive a commission. Thus, to generate revenue, the operator is responsible for building a friendly environment in the marketplace to encourage more of sellers to exhibit their products and buyers to come and buy those products.

There are many kinds of marketplaces existing presently – some of them are B2B, B2C, and service or C2C types. Despite being from different categories, there is still one governing mechanism which his pretty much common. A well-running marketplace should have the following features:

  • Ever-Increasing traffic that attracts more and more customers
  • To showcase products that would stand out – which would mean the number of people being attracted to the site
  • A detailed product catalog, which would generate traffic again
  • An operator who would act as a mediator, and a communicator
  • A proper legal framework and transparent pay system, to lead to the outcome in sales.

All of these outcomes will naturally have a great impact on how the software is designed, and what kind of platform it is working on. Moreover, these requirements frequently change over time.

Components of the Marketplace

Marketplaces are complex structures with interweaved subparts which makes it hard to bifurcate them into segments. The entire marketplace can be broken down into order management, platform infrastructure monitoring, email and SMS marketing, payments and invoices, customer service, customer tracking, reporting, promotions, shipping and more.

Today there are CMS or content management systems that are available with plenty resources and automated tools that help to build the online marketplace easily, within affordable costs. Below listed are the ways one can create their own successful marketplace online:

Components of the Marketplace

Understanding the Value and Business Model

Before going up to the point of development, there needs to be clarity of thoughts. There must be a clear idea which determines the value and the business model that your site will have. It needs to draw attention from other e-commerce entrepreneurs and must have a good customer base. Thus here comes in the point of market research – what kind of customers should you target, what will be the products that your marketplace will sell, are the questions that need the answers.

Now deciding the business model is a crucial part too – will there be a commission charged on each transaction, or will there be subscriptions available for the sellers to market their products? The model has to match the marketplace operations and be a good fit.

Picking of an Effective Platform

There is a choice of CMS or Magneto here – wherein Magneto is world famous because of a few reasons. Magneto has been allowing growth through the upgrades, along with a supply of tools from the third party. Also, there is easy usage, customization, and a lot of extensions that add on to the e-commerce capabilities. Magneto users also get unlimited support from their in-house team, making it a better choice over CMS.

Finding Awesome Web tools

It is unlikely that one finds all the tools in the CMS platform they are using. In that case, one has to browse for tools, in the online world. There are tools that help multiple vendors to sell on a single store, and then include sales reports, inventory management, and payment tracking a lot of other things that one would need to manage an online marketplace.

Maintaining an Effective Selling Environment

A cluttered website will automatically deter payment. There have been studies that show that 40% of users leave the webpage if it takes more than 3 seconds to load. The website must be running at its best potential and must have maintenance extensions.

Finding Awesome Web tools

Launch the Marketplace and Let it Grow

Once the marketplace has been built, it is time for launching it. But before that, a few essentials need to be taken care of – which are running tests to check the functionality of the marketplace. Private in-store transactions are one way of testing the app, such that one can find out if everything is working according to the design, and hence one learns if there are problems to fix. The worst thing that one could do is to make errors and turn off the customers. After it is ready, one requires launching it and then watching the results unfold.

You will find this article useful: Why WordPress is an Excellent Choice for Your Website

Growing your Marketplace to its Potential

Any online business grows to become successful only if it learns to adapt to the ever-changing dynamics of the market. Thus keeping track of the channels and keeping informed are the best ways that can help you in keeping the business in its highest potential. It is obvious that the customer traffic will be extremely low at the launch, but then monitoring your website and looking into publicity can help your website grow strong in terms of customer traffic over a period of time.

All of these pointers can help anyone to build a successful marketplace for buying and selling operations right from scratch. Previously, building a marketplace like Amazon, eBay or Etsy, was expensive, and gathering tons of vendors to sell on the online platform, would cost someone a huge amount of money. The chief difficulties of enabling the vendors to sell on the same online platform, providing them with a proper selling environment, marketing the products simultaneously, were an extremely difficult task. But these factors have been overcome, and getting through a simple marketplace design is now simple, and successful.

Mahabir Prasad

CEO & Founder, @IWebServices : India's leading digital agency that helps global brands develop amazing solutions and connect them to their audience. As CEO, I work with a team of incredibly talented and creative people that blend technology and innovation to augment the best integrated digital solution.

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