Online marketplaces are a hot trend. The venture capitalist firm has been pouring in the money for marketplace apps and companies. Look at the success of companies like Amazon, Flipkart, Etsy, eBay, and others. As of July 2021, Amazon is valued at a whopping $1.85 trillion.
The model of the online marketplace is simple and it can be applied to any industry.
Think about it, if you want to buy groceries what do you do? You pick up your phone, open the Amazon app and order the monthly groceries. Or you are planning a trip with your family to Europe, where are you going to stay? Let’s book a villa on Airbnb, is the first thought.
This is just the beginning of the marketplace economy. In the next decade, more marketplaces are going to emerge for different sectors. It makes total sense that the marketplace is such a hot pick today for every wannabe entrepreneur. Most startups that make it big have one common string – they solve a big problem with simple tech solutions.
Marketplace apps also benefit the economy vastly. For starters, they help local businesses reach a wider consumer base. Traditional businesses can make a brand without any investment. All they have to do is list their products on the marketplace.
Before we look into the details of what you need to start an online marketplace, a word of caution – you must have heard that marketplace apps can be scaled to a billion-dollar business. This is true, but it’s not a piece of cake. And it definitely can’t be done overnight. You have to be patient and put in the work.
Now let’s see what do you need to start your own online marketplace
Coming up with an idea for a marketplace app is not difficult. You don’t have to have a disruptive idea like uber was when it first started. Marketplace apps are a successful business model. All you have to do is identify a market sector where there is a need for a marketplace.
Amazon started with books and slowly ventured into other categories. Another successful marketplace ideas are Airbnb for booking a place to stay while you are traveling.
An Indian startup, Zomato, which is a food delivery app has seen massive success. It started with specific Indian cities and now has an international presence.
The idea can be about any sector, art, music, medicine, pharma, human resources, anything. Just make sure that there are two parties – the buyers and the sellers.
Here is another example to get your creative gears roaring. Studio time is an LA-based marketplace to rent studios for recording music. It is now present in New York and London as well.
The two pulling ends of a marketplace are the sellers and buyers. Before you start working on your app or website, start interacting with buyers and contacting sellers to get on board. Getting both – buyers and sellers is the most difficult part of the entire marketplace development journey. It happens a lot that you get the sellers to agree but by the time buyers arrive they are gone.
When Amazon and Flipkart started their operations overseas like India, they started with both ends at the same time – the customers and the businesses.
But for new marketplaces, it is better to focus on one market at a time. Try to secure the initial supply before you call the customers to buy. Don’t get too greedy with the features or services you are planning to include in the app. Don’t try to build everything for everybody and get everyone on board.
A piece of advice for aspiring entrepreneurs, spend time with your users. There is nothing more beneficial than listening to the users, identifying their problems, and including them in the solutions. You are far more likely to succeed if your users are engaged with the platform every step of the way.
The technology you choose to build the app is the foundation of your app’s success. This is where all buyers and sellers will be. If you don’t have a technical background, it will be a good idea to find co-founders or hire an excellent offshore react native company to help you figure out the technology side of the marketplace business.
Building a marketplace is far more complex than creating an eCommerce store. You need scalability, you need to provide app/website access across all devices and platforms. And you also need to make sure that the servers never go down. NEVER. If that happens either the buyers will kill you or the sellers will.
Another important part of the marketplace is payment integration. You need very secure payment setups and you need multiple payment options too. Think about it, what if you provide only one type of online payment option and due to some reason it goes down. What will you do? That is why you must have all the standard payment options like cards, net banking, PayPal, and the local ones too depending upon your demographic.
Lastly, the technology you choose to host the app must be of the latest version. And as technology changes every 6 months, you need to make sure that you’re not 3 versions behind. Older tech stacks are not good for the functionality of the app/website and your marketplace business repo.
An older technology stack also lacks the required standards needed to provide a great user experience.
It is tempting to think about selling to millions of customers right away. It is good motivation but not an effective business strategy. You should know that it takes sweat and time to build a massive marketplace like amazon, Etsy, and Airbnb.
When you are first starting in your market niche don’t worry about being the best or creating the perfect app for your customers on the first try. There is no such thing as a perfect marketplace. You should focus on building a minimum viable product first and getting it to the market.
Just build a product which a few users will be interested in. get the feedback, iterate, and grow from there. If you try to do all the things at once, it might fall flat. Learn from the big players – they started small and built their way up. So can you.
After building your version of the app/website, it’s time to sell. The more you sell the more successful your marketplace is.
Selling more is the unbeatable strategy to crush your competition. There are always some big players in the market with big pockets and to beat them, you must provide customers what they want. Optimize the search results and suggestions for users so that they would buy more.
Without selling, your marketplace startup is bound to fail.
Now you know what you need to get started with your own marketplace. Remember that your niche will set your marketplace apart and combined with relentless execution will help you beat any competition. Get buyers to meet the initial demand and initial trust in users with every visit.
Have a marketplace idea? Contact our marketplace app development company and get started.