Speaking of a marketplace, you can say it is a platform where sellers unite to sell their products to the customers. In a way, this platform brings together the right vendors and the right customers. Marketplace businesses have become one of the most common startups in recent years. Online marketplaces are quite different from online stores so you must not perplex them. It actually helps you meet everyday online challenges and to keep up with worldly desires. If you are planning to start a marketplace business then we would like to guide you with our words.
Why Marketplaces is so in Favour Nowadays?
Having a business online is very beneficial for both sellers and buyers. Marketplaces are really convenient for customers. Marketplace selling is a service that makes shopping possible from different sources. It actually makes it easier for you to sell the product. It also helps keep up with the budget. Before starting a marketplace business, you must keep these few things in mind.
The success of your online marketplace somehow partially depends on the online platform you are using to create. As an online marketplace is intended to facilitate both buyers and sellers, we advise you to choose a reliable and user-friendly platform for your business depending upon your budget, in-house technical capabilities, and long-term goals. The best option that we recommend is to develop a marketplace right from scratch, tailored according to your business model and specific requirements. Your objective should be to keep things simple, streamlined, and automated by starting your online marketplace on a custom platform that can scale as you grow.
At SkyQuest, our preferred technology stack to build a marketplace web application includes PHP, Laravel, and MySQL/MariaDB for the backend and Bootstrap or VueJS for the front-end. The reason to pick the Laravel framework for the server-side is because of its robust capabilities, solid stability and security, and lower development costs to build a custom platform.
Choosing your Niche
It is very important to have a particular niche researched and you must stick to it for some time before moving on to another one Reason behind successful online marketplaces is that they cater to one particular niche to service the needs of the vendors and the customers. Take an example of a marketplace like Houzz which primarily focuses on interior designers and house decor. Similarly, Airbnb is a marketplace for short-term vacation rentals. You can have a broad vision in your mind but remember to start small and succeed gradually.
What you sell on your marketplace, or what your target audience also plays an important role. Without a niche to follow, you will have no aim or direction and you will end up not succeeding, so you must have a clear niche and focus on it throughout the process.
Focus on your Minimum Viable Product (MVP)
It’s okay to aim high and have a wishlist of many bells and whistles but you can’t build a huge platform overnight and neither in just a couple of weeks. Instead, you must build your platform step by step by starting off with developing a minimum viable product or an MVP for short. With rapid changes in the market dynamics, online trends, and shorter interactions, you can’t afford to invest huge sums altogether in building out a platform in over 6 months only to end up with zero customers.
That’s the reason we advise on building an MVP or a basic functional prototype of your marketplace first and accelerating speed to market to experience how users respond. Typically, a functional marketplace MVP takes 2-3 months to develop and costs roughly between $4000 to $8000 depending upon the number of features, processes, and design features. Build something that your users would love to interact with and pay for and use their initial reviews and feedback to strategically scale-up.
Organized your Budget for the Marketplace Business
Like other businesses building and operating a marketplace does require some investment to get started but you don’t have to invest huge sums in hiring in-house developers and management professionals. Instead, you can simply outsource to a well-established and reputed company like SkyQuest to hire offshore dedicated resources for less than half the cost you would spend in hiring designers and developers in the USA, UK, or Europe.
The main features of your marketplace business budget will likely include:
-Cost of the Platform:
As we recommended earlier you will need to develop a custom-built marketplace platform that requires a minimum one-time investment to build a core product in the start and eventually iterating and improving it over a long run period that is also broken down into cost per resource and distributed on small monthly installments in most cases.
-Acquiring Vendors & Merchants
Once you have released a basic version of your online marketplace you’ll need merchants to sell their products or services. Initially, you can start inviting merchants and vendors by directly reaching out to them via email and calls and help them set up their profiles and start selling on your marketplace. The second method is to spend some budget on targeted online advertising through Facebook or Google. You must make the best use of inbound marketing and content marketing to speed up your user acquisition on the vendor side.
Unfortunately, most consultants and agencies would make it sound like as soon as you will launch customers will start coming in automatically to your website. However, the reality is completely opposite.
You need to have a proper marketing plan in place through which you will attract new visitors, nurture them, and convert them into loyal customers. We call this Revenue Operations or RevOps for short.
With RevOps, you basically align marketing, sales, and customer service together and offer a streamlined and unified experience to your customers that delights them and helps you to retain them for a longer time. This eventually helps you to increase your customer lifetime value or LTV.
In today’s competitive online space, growing completely through organic sources like SEO or content marketing alone takes a lot of time and effort. That is why we recommend setting some budget on the side to spend on online advertising every month while you publish content and improve SEO in parallel. You don’t necessarily have to spend thousands of dollars in the beginning. An amount like $500 per month could still drive some decent amount of traffic and potential buyers to your website if you do everything right yourself. Alternatively, you may hire trained virtual assistants to save yourself time and effort and they will help you with creating engaging content, running Facebook Ads and Google PPC Ads every month for a really low hourly rate of $12 or even less!
-Focus on Results of the Online Marketplace
Now ask yourself, what are you aiming to achieve? Or what are your short-term and long-term goals with the marketplace project?
You might want to just start a platform to assist local businesses with getting more leads every month, or you might be looking to acquire a customer base to promote another product that you already have.
Whatever your goal is you must focus on the outcomes from your marketplace business and make sure it helps both sellers and buyers. The main purpose of any online marketplace is to connect sellers and buyers within a niche to sell goods or services. so do ensure that this core idea is intact in your marketplace.
What you Must Keep in Mind
Since the last couple of years, we have witnessed the entrance of many new marketplace websites and have also helped many businesses to launch their own marketplace platforms and grow them successfully. We also know that technology has advanced rapidly and it’s much easier nowadays for individuals to build entry-level marketplaces using no-code tools and online website builders by paying a small monthly fee.
Such marketplace websites and apps are okay for small community activities or side projects. However, if you plan to build a real marketplace business that will grow exponentially, make recurring profit every month, and will continue to thrive in the next many years to come. then you should be seriously looking to hire a professional company to help you make your next million-dollar marketplace idea into a reality.