How to operate a successful online marketplace
Have you ever looked at an online marketplace and thought, "I could do that?". You're not alone. In fact, there's no shortage of people who think they can build successful marketplaces.
However, the truth is that building a successful online marketplace is much harder than most people realize and requires a specific set of skills and resources to pull it off successfully. It's more than just setting up a shop on Amazon or eBay. It takes planning, execution, and strategy.
By reading this article, you'll be able to find the tricks to running a successful online marketplace.
Understand the target market
Understanding the target market of an online marketplace is crucial for its success. The first step in understanding your target market is to think about who you are trying to reach. Who are the people who will buy from you?
You can also think about the types of things that these people might be interested in.
Once you have an idea of who your customers are, it’s important to consider how they use their time and money:
What do they value?
How do they get things done?
What are their goals and motivations?
The next step is to think about what kind of products or services those customers might want from your business:
How can you provide them with what they need?
What makes your offering unique and better than competitors on the market?
Automate everything you can
Automation is the key to success. This includes onboarding, customer support, product creation, marketing, sales, and customer service.
It’s a game-changer! It allows you to do more in less time, which means you can have more time to focus on what's most important: your customers.
You don't need to worry about:
Not having proper onboarding operations and a low go-live rate
Your products being made correctly or if they're being shipped on time
Spending hours replying to customer emails or tracking down lost packages
Automation takes care of all of that for you—leaving you with more time and energy to focus on growing your business. For example, if you're selling physical products that need to be shipped out after purchase (think about the difference between buying a book online versus going into a bookstore), your best bet is to use third-party services like Shopify Shipping.
Build a large customer base as fast as possible
It's time to build your customer base. This is the most important part of your business and it's also the easiest.
There are 3 things you need to do:
Creating a good user onboarding makes it easy for customers to complete compliance requirements, understand how your product works, what they can do with it, and why they should stick around after their first purchase.
Get customers into your site/app as often as possible, without them leaving because they found what they wanted and needed to have a reason to stick around.
Keep them on longer than they would otherwise stay on a competitor's site or app during their shopping experience (because you've made it so much better).
Keep up with growth without sacrificing quality
No matter what industry you're in, there's always going to be a need for quality products. It's important to keep up with growth so you can stay relevant and continue offering your customers the best product and service experience possible.
Here are some tips for keeping up with growth without sacrificing quality:
Create a customer adaptive journey that works for you and your customers - It all starts with finding out exactly what your customers need and want. Customers want to feel heard, respected and valued when they interact with your brand at any stage of the process—before they buy from you or after they've already bought from you.
Create a strong brand identity - Your brand should be memorable, recognizable, and consistent across all platforms—it should feel like it belongs together.
Keep it fresh! Don't be afraid to change things up as needed (and keep an eye out for new trends) - If something isn't working for you, try something new! But don't go overboard—make sure everything still fits together with your overall image and message.
Successful online marketplaces are built on speed and scale
It's no surprise that speed and scale are essential. A business built on speed and scale can outlast its competition as there's less time for them to catch up. Speed means you can react faster than they can, while scale means that you have more resources available at any given moment in time.
Speed and scale can help with the go-live rate, an important KPI, as it reflects the percentage of products that are live on the marketplace after a certain time period. As you increase the go-live rate, the faster your products are added to your site, the more likely it is to be seen by customers looking for them during their onboarding journey.
Why successful online marketplaces are built on speed and scale:
Speed allows businesses to respond quickly to changes in the market and adapt accordingly. If your competitor introduces a new feature or product, then you can follow suit immediately. You won't fall behind in terms of what customers want and if they do want something new, you'll be ready for them when they come looking for it!
Scale gives you access to resources that might otherwise be unavailable without significant investment from other parties (such as hardware or software). It allows companies like Amazon or Walmart to offer low prices across their entire product catalogs by leveraging economies of scale. They're able to invest heavily in infrastructure while still keeping costs low enough for consumers who shop online frequently enough throughout the year that these savings actually matter!
If you want to start an online marketplace, the best thing you can do is start now. There are a lot of ways to make it work especially with tools and features such as a go-live rate that can help you easily measure your marketplace’s success. There’s no reason why you shouldn’t be able to make money from something many people around the world are already doing daily!