The marketplace industry is expected to grow from its current $15 billion estimated overall value to $335 billion by 2025. That makes now a great time to invest in a new marketplace business. However, for many, launching a marketplace can feel like a daunting task. The back office, vendors and buyers are all separate facets that must be carefully considered pre-launch. All of this can make launching your marketplace seem a stressful, almost overwhelming, undertaking. The truth is, it doesn’t have to be.
Having worked with many multi-vendor businesses that have managed to find their space in an ever-growing market, we know a thing or two about what it takes to become an established marketplace. The launch phase, in particular, is crucial in laying the foundations for success. Below, we’ve outlined the principal steps a new marketplace should take to make the process run as smoothly as possible.
What is your marketplace’s value proposition? This is the first vital point. For a marketplace business, this needs to be defined for two different personas; the buyer and the seller. By setting up meetings with prospective buyers and sellers you can figure out what they seek in a marketplace. These insights, in turn, will give you valuable information for your business plan and, namely, will guide you on what monetisation strategy to pursue. The four common revenue models are commissions, monthly fees, marketplace ads and additional services. The model you choose must, of course, be aligned with the type of buyer that will buy your vendors’ products. After deciding the commission model, key metrics must also be outlined and implemented so progress can be followed after the marketplace launch.
A clear business plan should be made outlining what will be sold (physical products, digital products, services), who will do the buying and selling (B2B, B2C) and how distribution is to be handled. Provisional market analysis and industry reports can be found online to give a guiding hand. Whilst it is a great time to start a marketplace business — industry growth is showing no signs of decline — an adequate approach to securing financing is essential first. Crowdsourcing might work for early-stage entrepreneurial ventures. A more disruptive idea might also call for a more challenging, but lucrative route that leverages venture capital funding. Marketplaces within corporate environments will need to sponsor the project and secure financing from above.
Much in the same way as building out a team, it is important to thoroughly assess the requirements before choosing the technology approach. There are several questions to consider. For example, what is the marketplace’s budget? Are you building the first business in a specialised niche, meaning a quick time-to-market is crucial to success? Does the marketplace require a fully customisable interface? Or does it require a more traditional marketplace UI, meaning ready-made templates could be an option?
After the requirements are clearly outlined, it’s time to decide on implementation. You can develop the marketplace from scratch; either with an in-house team of coders or by outsourcing to an external team. Open source software can also be used as a great starting point for a team of coders. However, the increasing prevalence of affordable subscription SaaS platforms, like Shopery, might be the best choice, as templates are kept up to date with marketplace trends and new integrations. This approach also means you won’t have to pay to retain a team of coders and can invest more heavily in other areas of the business.
Once the business plan and technical specifications are dealt with, it’s time to test the project with potential buyers and put the business plan to the test. Phone interviews and inexpensive ads leading to enquiry forms are a great way to create leads.
Just as importantly, you’ll need to define the marketplace’s brand using its logo, website, social media, and the tone of voice transmitted through all of these, as well as via content marketing efforts. In the case of B2C marketplaces, a content calendar should be established, with a PR launch campaign as the starting focus. After that, your marketing team should work on establishing a go-to blog with a view to adding case studies of success stories after launch. Post-launch, periodic SEO audits can show you where content can be optimised for search. An SEO specialist can help you to keep track of the ever-changing world of search. For example, only last year, page speed became a factor in search. This has wide implications for marketplaces, which are typically highly reliant on great photographs to engage with buyers, as very large photo files can slow search and adversely affect rankings.
Operations teams test the waters with potential sellers. It is essential that the USP is at the heart of this so sales teams can then explain exactly when your marketplace offers that other vendors do not. Research should also be made into existing competitors in order to make sure your platform provides something unique that competition does not. Of course, you do want to know if sellers are good enough for your platform too. Are they on any approved government or trade association supplier lists? Do they have experience and the capacity to grow alongside your platform?
The legalities and technicalities are also dealt with by operations in the marketplace seller agreement to ensure high-quality standards are met by the products sold by 3rd party sellers. In defining the monetization, it is important to strike a balance between incentivising buyers and sellers with your approach. Finally, an operations launch campaign typically focuses on incentives like member referral programs, a free month for all new vendors at launch and other similar offers. These encourage new members to come try, and fall in love with, your new platform.
The team is shaped after the four main pillars of your marketplace: marketing, operations, product and engineering. In the hiring process, it is important to invest wisely depending on the requirements of the marketplace. For example, what are the technological (see below) requirements? Can affordable SaaS services that take care of a large part of the engineering side of things allow funds to be spent on building a bigger marketing team, as an example? This might be the way forward for a marketplace business prioritizing a leaner and quicker go to market, in order to stand out above new potential competitors.
After getting the team together, holding a kickoff meeting can help align all parts of the business, including operations, logistics and external sellers. Key metrics should be shared with the team so everyone knows how to follow progress. Buyer and vendor personas should also be brought to everyone’s attention in order that the whole team is aware of the pain points, needs and demands that drive the business. Finally, as the marketplace grows, hire more staff where needed. For example, high growth might see more efforts needed in content moderation to make sure quality standards are being met. New competitors in a specific niche, meanwhile, might see you want to double down on marketing efforts.
Starting a new marketplace business is an incredibly attractive proposition today. Of course, that doesn’t mean it’s easy. Marketplace businesses need all the help they can get when it comes to ensuring success — especially in a multi-faceted business like online marketplaces. To make sure your vendors, buyers and your in-house team are on board and working towards the same goal, you’ll need to follow the above steps for a successful launch.
Any new marketplace owner who makes sure they tick off all of the above will have a pretty great foundation for success in starting a new marketplace business. For a more in-depth look at the various components and stages of the launch process (and a comprehensive checklist), simply download our Marketplace Launch Guide.
The team is shaped after the four main pillars of your marketplace: marketing, operations, product and engineering. In the hiring process, it is important to invest wisely depending on the requirements of the marketplace. For example, what are the technological (see below) requirements? Can affordable SaaS services that take care of a large part of the engineering side of things allow funds to be spent on building a bigger marketing team, as an example? This might be the way forward for a marketplace business prioritizing a leaner and quicker go to market, in order to stand out above new potential competitors.
After getting the team together, holding a kickoff meeting can help align all parts of the business, including operations, logistics and external sellers. Key metrics should be shared with the team so everyone knows how to follow progress. Buyer and vendor personas should also be brought to everyone’s attention in order that the whole team is aware of the pain points, needs and demands that drive the business. Finally, as the marketplace grows, hire more staff where needed. For example, high growth might see more efforts needed in content moderation to make sure quality standards are being met. New competitors in a specific niche, meanwhile, might see you want to double down on marketing efforts.
Starting a new marketplace business is an incredibly attractive proposition today. Of course, that doesn’t mean it’s easy. Marketplace businesses need all the help they can get when it comes to ensuring success — especially in a multi-faceted business like online marketplaces. To make sure your vendors, buyers and your in-house team are on board and working towards the same goal, you’ll need to follow the above steps for a successful launch.
Any new marketplace owner who makes sure they tick off all of the above will have a pretty great foundation for success in starting a new marketplace business. For a more in-depth look at the various components and stages of the launch process (and a comprehensive checklist), simply download our Marketplace Launch Guide.
This guide will enable new marketplace businesses to minimise the risks involved with launching their projects and will boost the chances of success for your new marketplace. It’s crafted by the Customer Success team at Shopery, made up of e-commerce experts that have supported dozens of clients on the journey to the success of their marketplaces.
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