Securing capital is the lifeblood for your marketplace. While it does require determination and hard work, there is no need for it to be painful. With PwC expecting the industry to grow from its $15 billion estimated overall value to $335 billion by 2025, it is a better time than ever to get investors on board.
Starting a new multi-vendor marketplace venture might seem daunting at first. Creating a business plan, setting out a budget and hiring a team might feel like a mammoth undertaking to begin with. Thankfully, there are plenty of tools and pieces of wisdom out there to make things much easier.
That means that knowing how to invest wisely in your marketplace is now more easier than ever. And what’s more, you won’t have to cut corners when it comes to quality. Here are some steps for how you can make the most out of your budget and set your platform up for success.
When it comes to growing your marketplace, retaining great sellers is key to increasing both traffic and sales. In fact, a marketplace is nothing without good sellers. They form a central pillar of your marketplace’s content, and they’re fundamental to building trust with buyers too. In short, it is very important to manage your marketplace using clear guidelines, in order to ensure that buyers obtain the best experience in the marketplace while sellers reap the benefits from selling in a healthy marketplace ecosystem.
The way to do this is by implementing a marketplace seller agreement, a crucial document to the success and smooth functioning of online marketplaces. In fact, the marketplace seller agreement contains the terms and conditions that govern the seller's usage of and access to the marketplace. As such, it is a contractually binding rulebook between the seller and the marketplace itself.
As a marketplace owner, there are two actions that form the foundation of your business: acquiring buyers and growing a quality seller base. Without these two pillars to ensure stability and growth, your business model will fail. To put it simply, a great marketplace is nothing without great vendors.
There is a lot to consider when it comes to selecting and then acquiring sellers. To help you on your way, we have compiled a few steps on how to set out a plan for acquiring, and keeping, the best sellers possible for your multi-vendor marketplace.
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.
Before the dominance of e-commerce, shopping was traditionally a tactile experience for consumers. That explains why clothing stores have fitting rooms, book stores allow a flick through, and wine galleries hold tastings. Some of these experiences clearly are not replicable online, but with 60% of sales happening through online marketplaces, online retailers have to find a way of recreating this interactivity with products prior to purchase. The answer? High-quality photos. Indeed, images are more important than ever in getting consumers to buy a product.
One of the great benefits of starting a marketplace over an online store is that there is no need for marketplace owners to invest in stock, since external vendors are responsible for upholding the inventory of their products. That is not to say that marketplace managers can wash their hands of all responsibility. Indeed, the quality of content sold on a platform — take Amazon as a prime example — is often attributed to the marketplace platform itself. In fact, their brand reputation often rests on their ability to offer the best quality, and widest variety, of the products their customers are interested in.
According to Lengow, over 60% of sales already happen through marketplaces, and some of the most successful companies worldwide (Airbnb, Amazon, Uber) operate under this model.
On the surface, it may seem like marketplaces are much more complex than other, similar businesses, due to their nature as multi-vendor platforms. The truth is the marketplace model is surprisingly lean and scalable for new startups. So how do we really define a marketplace, and how does it differ from online stores and classifieds businesses?
In 2019, building a marketplace business is an attractive proposition. In fact, online marketplace revenue is expected to double by 2022. Furthermore, more specialised, niche marketplace businesses are increasingly cornering their respective markets with great success. In addition to that, the rising prevalence of ready-made marketplace SaaS solutions makes it easier than ever to get started and launch a new marketplace.
The marketplace industry is currently going from strength to strength. 60% of digital sales are carried out through online marketplaces already and the number of new marketplaces is growing rapidly. With the sector becoming increasingly competitive and customers placing high demands on UX, the importance of technology to the success of a marketplace has never been bigger. As a result, choosing the right software to power an online marketplace has become a space all of its own. With so many different options available, it can be challenging to select the right marketplace technology for a particular business. To help marketplace owners decide on the type of platform for them, in this article we have focused particularly on why Software-as-a-Service (SaaS) solutions are the way to go for new marketplaces.