Marketplace Application: What to Consider to Build a Perfect Platform?

The global online retail sales are continuously growing, and fewer people are shopping in physical stores. E-commerce trading is increasingly replacing offline trading in bridging the gap between manufacturers and buyers (customers) and gives sellers (vendors) unlimited potential for new demographics. For example, statistics from Forbes show that 52% of online shoppers report shopping internationally, which is one of the reasons for the increase of online shopping. That is why, more and more traders put their budget into developing and marketing an online store and participating in online marketplaces.

For many people, shopping online has become a strong habit. The same statistics from Forbes also show that at least 34% of online shoppers buy something online once a week. 91% make online purchases using their smartphone. It all means that those marketplaces that are still choosing which model to go for need to take action. There are a lot of factors to consider, so let’s see what should be done.

What Is a Marketplace Platform and Where to Start When Creating One?

A marketplace website is an online e-commerce service with its own brand name where multiple third-party sellers list their products or services (but don’t own them), and the marketplace operator manages the transactions. This digital environment connects buyers with sellers, facilitating the sale of goods, services, or digital content. It may serve a broad audience or focus on a niche market.

Online marketplace platforms can operate on a B2B basis, involving transactions between businesses, or on a B2C basis, similar to Amazon or eBay, where businesses sell directly to consumers. They are known for their ease of access for sellers to set up shop and for buyers to compare a variety of products in one place. All products (items) and services belong to different companies or individual entrepreneurs and are presented under their brands.

The platform typically features a dual-user system (buyers and sellers), transaction facilitation, and the ability for users to engage in activities like listing and purchasing. While the platform itself doesn’t own the inventory, it allows sellers to list their items for consumers to buy. Moreover, online marketplaces store basic information from the sellers and make it available for the consumers. The information can include the following:

• Contact details (name, address, phone number, email address);
• Copy of identity document or other electronic identification;
• Payment account details;
• Extract and number from the commercial register (if applicable) or details from a similar public register;
• Self-certification of the seller in which they undertake to offer only products or services that comply with the region law.

When you have a goal to develop a marketplace platform, we recommend you follow certain steps. So, let’s see what to start with.

Read Also Marketplace Business Model vs Aggregator Business Model

Identifying Your Marketplace Niche and Audience

Whether you are an aspiring entrepreneur or the one looking to expand your existing business, understanding the landscape of your market is crucial. By researching your competition and validating your ideas, it is possible to carve out a space that is both profitable and fulfilling. Thus, identifying your marketplace niche and audience involves a few strategic steps:

1. Reflect on Your Passions and Skills. Start by considering what you enjoy and what you are good at. This will help you to monetize your passion and skills effectively
2. Identify Problems and Needs. Look for problems or needs that are not currently being met by the market. This could be a gap you can fill with your unique product or service.
3. Research Your Competition. Understand who your competitors are and what they offer. This can help you to find a niche that is underserved.
4. Define Your Niche and Its Profitability. Determine if there is a profitable segment within the market that aligns with your interests and skills.
5. Validate Your Idea. Before fully committing, test your product or service through surveys, landing pages, or small-scale releases to gather feedback and gauge interest.
6. Establish a Strong Foundation. Once you have validated your niche, built a solid foundation, and focused on SEO fundamentals, you can set your business up for long-term success online.

Besides that, don’t forget that online marketplace attracts its audience by bringing the following advantages:

• Simplification of the selling process for Sellers

In order to start operating, a seller just needs to register a profile, which doesn’t require much time and investments.

• High level of trust to a marketplace for Buyers

Of course, here we consider marketplaces with solid reputation, such as Amazon. According to Exploding Topics, 85% of global consumers shop online, so you need to have a trustworthy platform to be among those who will pop up in the customer’s mind.

• No need for advertising for Sellers

Marketplace owners advertise and promote the platform themselves, so potential customers will be already there. Vendors, on the other hand, should do their job well without having the necessity of their own website promotion.

• No responsibility from Sellers for the security of their clients’ data

Marketplaces take responsibility for the security of the clients’ data, so there is no need for vendors to worry about it.

What to know more? Check our full guide and learn about how to:

• Define Essential Features for a Successful Marketplace Platform;
• Understand Marketplace Development Costs;
• Find a Development Team to Build Your Marketplace, and more.