How to Start Your Own Online Marketplace Website

Online Marketplace Website

A marketplace is a single online trading platform that enables multiple vendors to propose their services or products, and customers to receive them.

Marketplaces are an incredibly promising niche in the e-commerce market. There are more and more sellers of goods in the online segment, and each of them is interested in making their products visible to as many network users as possible.

Despite the large variety of existing marketplaces such as Amazon, Alibaba, or eBay, it is a great idea to create a marketplace website, since the e-commerce market has been growing every year.

Below you can see the growth of retail e-commerce sales worldwide from 2014 to 2025 in billion U.S. dollars.

Statista
Source: Statista.com

It is essential in website building not to make the wrong choice of a niche. And not less important is to move from an idea of startup to a minimum viable product as fast as possible. However, it is also very important to understand its main features and benefits before using the step by step guide on how to build a minimum viable product.

Before starting to develop a marketplace website, you should answer the following questions: why and what.

Why do you want to make an online platform? What are you going to create? What are the most efficient practices to start a business?

So, let’s dive deeper into the topic. 

Tip 1. Choose your niche

When building an online marketplace, pick products or services you want to deliver to your potential customers.

Many novices make the mistake of opening a store and selling a product just because it is currently popular. If this product is really popular, then you will face huge competition. By the way, if you are not truly passionate about what you do, you will not be able to stand out from the crowd of competitors.

Also, it is very important to have experience with the product you are going to sell. This will help to distinguish a quality product from a poor quality one when you decide what to sell in the store.

To sum up, you may either focus on a specific set of goods or services like Airbnb does, or spread over a variety of products. For example, eBay covers a great number of categories, from electronic devices to fashion items.

However, we recommend starting your online marketplace with a single niche to highlight the special features of your category and get a better user experience.

Tip 2. Define your overall strategy

Think over all the details:

  • The business model of your marketplace. It is crucial to understand the advantages and drawbacks of your future project. Define the “who to whom” issue, the thematic category, and the type of the marketplace.
  • Monetization strategy. The main point is that your marketplace is about making a profit. It is not a charity business. That’s why you should carefully choose the monetization methods for your platform and implement them.
  • Promotion. Remember that your marketplace is a brand. It needs to gain attention from both vendors and buyers. Social media, paid-for ads, and content marketing are your best assistance.
  • Customer service. Provide your customers with an exceptional user experience. For example, you can engage both sellers and buyers to get feedback about the purchase. 
  • The software platform. It is of high importance to build accurate business logic that your customers will follow. You can create it using the existing platform or build it from zero.

These are the cornerstones of your future business.

Tip 3. Learn from others

It is always a good idea to find out how your competitors solve problems to make their users happy and gain profit. 

Therefore, never stop learning. Maybe there are better ways to promote your marketplace? Are clients asking for something you are not proposing? To put it short, you should be open to new things.

Tip 4. Create an MVP as fast as possible

The most common pitfall novices make is when they want to create the best, perfectly designed online marketplace from scratch. After that, they are ready to enter the market. However, as practice shows, this process takes a very long time and needs many thousands of dollars. Nevertheless, it does not always lead to success.

During the initial phase, build a minimum viable product to find out your potential audience needs. One thing you should take into account: do not overload your project with tons of features, as it may lead to failure and loss of money.

Simply put, make having a global vision of the project a priority. And remember that most of the successful marketplaces started with a minimum viable product (MVP).

Tip 5. Get to know your investors

The choice of an investor is an important stage in the development of a business since the possibilities and pace of development of a startup depend on it. 

With the right approach, startups receive from the investor not only financial support but also assistance in the development of the company. For example, investors can help to find potential partners, competently build a financial model, and enter the international market.

If the marketplace you are starting needs investors to grow, find those who may be interested in your kind of business. Also, attend meetings they hold and meetings that investors are speaking at.

It will surely help you launch your project faster.

Tip 6. Engage your users

Communicating with your customers is another crucial aspect that is worth considering.

It is not only about meeting your audience, but also about engaging them and finding out their needs and problems. Build your platform with users in mind. Furthermore, offer numerous solutions to make their purchasing easier and faster.

Conclusion

So, we have covered the most important points you need to know to start launching your own online marketplace.

Of course, building a successful marketplace platform is not easy. The good news is that online marketplaces are hot, and their popularity grows every day.

It is important to have a reliable strategy and know best practices. Nevertheless, you still need to be ready to work assiduously to grow your business and make it thrive.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.