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Online marketplace platforms are believed to be one of the most promising ecommerce industries. However, two-thirds of them close in the first year.
In this article, NEKLO experts share insights on how to avoid mistakes when creating a marketplace website and promoting it.
A marketplace is an online platform where sellers and buyers find each other and interact with each other. Such platforms have very different specializations – from universal trading platforms with goods for all occasions to industry-specific marketplaces for services. For example, financial, insurance, or consulting.
Depending on the specificity of the website, both companies and individuals can act as sellers.
How are marketplace platforms different from ordinary online stores? There are several main differences between them:
An online store usually offers products of one or more brands. The marketplace presents products from various sellers, often from many different categories. In this sense, it is like a large online hypermarket.
Many online stores exist offline, too, in the form of brick-and-mortar stores. Marketplaces usually do not have offline stores but there are pickup points.
Marketplaces tend to spend a lot of attention and resources on user acquisition. Therefore, they have more audience and traffic than normal online stores. In addition, advanced logistics allow marketplaces to work with wider geography.There are several types of marketplaces. We recommend you have a look at the table below to get an example of marketplaces types:
The benefits of creating a marketplace include:
Even though today the desire to create a marketplace may seem a good idea to get quick profit, it is also necessary to remember the risks this business idea may bring:
Development of the minimum viable product (MVP) will allow you to quickly launch your website. And after the start, you can and should develop the functionality of the marketplace.
On average, the development of an MVP for a marketplace will take 3-4 months. This time includes the entire process from the stage of analytics and design to the development itself if each stage is promptly coordinated.
What you need to do to get started:
The accounts should include:
Ask your ecommerce development company to include a payment module that will ensure the possibility of safe purchases, as well as the protection of payment data of both suppliers and customers.
Mandatory functions in the administrative panel include:
Marketplace development is a complex process that requires maximum concentration and responsibility as well as a qualified ecommerce developer as a partner. Therefore, before starting development, carefully analyze the niche, and determine the marketplace strategies, as well as the means of monetization. With the right calculations, the thought-over marketing and PR activities, the payback of the marketplace will be from 1 to 3 years, and then the website will work for a profit.
To avoid difficulties in the process of developing and launching a marketplace, you need to pay attention to the following aspects:
Our ecommerce development experts also highlighted the main problems that almost everyone who has ever developed a marketplace faces. Here they are:
The demand for marketplaces continues to grow, which leads to the emergence of new applications. There are many competitors in this niche, and if you are determined to enter it, you need a quality product that effectively addresses the specific needs of your target audience.
If you follow the recommendations we have outlined, you will have a better chance of finding your place in the market. Don’t be afraid to make mistakes, constantly improve your app, stay on top of current trends, and listen to your users. And don’t forget that you can always find support on every ecommerce-related issue at NEKLO – just fill in the form on our website, and we’ll be back to you with the solution.