Thousands of new digital marketplaces pop up every week in different parts of the world. They span in all industries, from traditional online malls to rental platforms, from service marketplaces to digital software and gaming platforms.
What makes online marketplaces lucrative is actually the network: it allows a marketplace owner to create a scalable business with various revenue streams with no need to manage the inventory and logistics. However, marketplaces shouldn’t be viewed as a magic spell that brings money to your pocket. Building a successful one takes a lot of work and, above all, strategy.
What are the secrets of running an online marketplace? These 5 tips below are a good start.
Choose the right marketplace business model
This is the very first, yet crucial step. This decision affects your future benefits and drawbacks. Start with choosing the type of your marketplace. It’s usually the choice between C2C, or B2B or between goods and services.
Depending on your vision, sometimes you also have to choose between online commerce and online-to-offline – that’s based on interaction with your future customers. When you have decided on the type, think if you want to launch a vertical or a horizontal marketplace:
- vertical – usually specializes in a specific good or service for particular groups of people
- horizontal – usually includes generally used and salable products
Your online marketplace should both create revenue and provide quality service for people to grow: remember about it while writing down a business model. You can do it with the help of BinarApps; before we start coding, we go through the business plan with you, step by step.
Find a new way… or just improve the old one
Being a trailblazer definitely gives you an advantage. A product or service that’s unique and hard to duplicate will get you far. While planning your marketplaces, try methods that have never been done before. Try to be as creative as possible. Innovation might be your key to success, especially with growing competition.
However, keep in mind that the problems and needs of everyday people usually aren’t that complicated. For example, most small business owners struggle with accounting – it is safe to assume that they will need help in that matter in the nearest future. It’s hard to find a person that doesn’t use food delivery services but is the market really saturated? Perhaps there’s a gap that your marketplace could fill? A good idea isn’t always about shooting for the stars; look around you and find inspiration in the people you know.
Focus on customers and customer service
Now’s the time to define your target groups. Don’t forget that you may have multiple customers. It’s not one person to be satisfied, it’s both individuals and companies.
The flow of your marketplace has to be in sync with your target group. Start by segregating your products and services into sections. Based on the product category, the style of presentation and the decision process can be vastly different. Remember that when you create your client’s personas. If you need to bounce ideas off of someone else, BA Studio is here to help you decide on the pros and cons of every solution.
Also, make sure that both products and customer service are nothing but outstanding. Customer care is usually what makes people return to particular marketplaces. It encourages loyalty and at the same time gives you the unbeatable word-of-mouth recommendations. Those usually result in new, as well as returning, customers. Your role as an owner of a digital marketplace is to create a memorable experience for your customers, the one that will make them feel connected to your products and services.
Create a great, new value – a brand, not just a product
A product or a service may not be something people fall in love with: it’s the experience that matters the most. This is why branding is so important. What is ‘branding’ you ask? In this case, it’s how people feel about you and your company. The way they feel about it is much more relevant than the utility itself.
Let’s be honest – nowadays most online marketplaces are similar to each other. Sometimes many of them are extremely easy to replicate. Customers have a chance to buy similar products and services from various retailers or service providers. Prices are also similar so the way a customer feels about your brand may play a huge role in their shopping decisions.
Here’s a tip: build chemistry with users by authentic interactions. Show them you care about them. Find ways to evoke positive emotions. Make your online marketplace a place they will feel at home. Make it as easy to proceed with the order process and transaction, have a smart search function, and make your marketplace browse-able.
Promotion and user acquisition – test and choose
Your online platform has been created to draw both customers and suppliers; either party won’t come without the other. As mentioned above, branding is a major challenge and so are strategies for attracting customers to your digital marketplace. Before you launch your online marketplace, make sure you work on different ways to promote your platform. It is essential that your business stands out. As consumers are programmed to find a deal these days, try many different marketing channels to see what works best in your case.
During workshops with our Clients at BinarApps headquarters, we encourage founders to consider the following options:
- Paid advertising – search, display, remarketing.
- Social media – both updates and relevant groups.
- Content marketing with proper keywords around particular product categories.
- Coupon codes – they are must-have for any online business.
- Email marketing.
Promoting your business is a daily grind but don’t forget you can also use cross-promotion by collaborating with the right business partners. However, remember that the key is to collaborate with businesses that don’t directly compete with you.
To sum up, launching a marketplace is a great way to dive deeply into the network effects. Thanks to your online presence you can rapidly expand your business and at the same time, you do not need extra capital, inventory, and workforce. However, it may also be a daunting task. Remember that you’re not alone: if you have put your trust in BinarApps, you will get a team that’s ready to discuss every doubt you may have along the way. If you change your mind, do not worry – by letting us handle all of the stages of planning, designing, and implementing your marketplace, you receive an opportunity to change details on the go.
We can’t wait to hear about your idea!