5 Steps To Build A Successful Online Marketplace

5 Steps to Building An Online Marketplace

Monday, 22 April, 2019 Updated on Wednesday, 17 November, 2021 by Eton Digital team

Disruptive business models are revolutionising online retail but the business potential of the online marketplace is yet to be seen and explored.

Great business ideas are emerging every day with startups leading the way and shaping ecommerce trends, but everyone can have a slice of the cake. From wholesalers and retailers to innovative enthusiasts, anyone can start a flourishing business venture. But how do you start? What steps do you need to take to build an online marketplace? If you already have a business idea and wish to learn more about launching an online marketplace, this article is for you.

Let’s go, step by step, to see what you need to develop a scalable business-oriented online marketplace.

#1 Validate your online marketplace business idea

To validate your business idea you need to gather answers from your potential users, researching your target audience to find out:

  • Who they are
  • What is the problem they have
  • Ways you can solve the problem for them
  • How your target audience sees the value of your product or service

Once you had tested the waters, explored your target audience needs, you can start thinking about ecommerce development and launching a Minimum Viable Product. MVP is where you can start, depending on your budget. With the right development, you can launch your marketplace in 3 to 4 months. This, however, is not the end of development, rather a beginning.  

MVP will allow you to further test the business potential of your idea with product discovery, to see how your target audience/beta users are responding, and whether your product is built to meet your customers’ needs. From here you go to development improvements.

#2 Find a niche for your online marketplace business

Before you start working on your online marketplace platform, market research is necessary if you want to build a functional and scalable online marketplace. Without data-based strategy for product development, you’ll be lurking in the dark trying to find your buying persona. Target market analysis and competitor analysis will show you whether you need to adapt your product to secure a successful start, giving you useful data for your business development in the long run. If this research fails or you skip doing it, your business might take the wrong turn.

Building a customer and competitor profile is the main precondition from which you can start building your future online marketplace platform.

Buying persona
Source: Pixabay

Collect information about your industry, market environment and all other factors related to your business. Gathered data will allow you to build the marketplace specifically for a subset of your niche market that really believes in your idea. In other words, market research supports a successful start of your business.

#3 Stand out from the crowd with unique design and intuitive UX

Your brand has to speak for itself and to represent certain appreciated values. The connection between the brand and its values is inseparable. Your platform is part of that relationship and it could be used to reflect values you want to promote.

In order to do that, you have to work on your brand awareness and brand storytelling and match your values with the customers’ values. One of the ways to meet their needs is by implementing smart UX design, intuitive UI, functional and modular website architecture and providing important custom features and functionalities. Compelling UX and UI will differentiate your online business from your competitors.

Important design elements for a great user experience

#1 Provide user-friendly design, smart search system, and convenient filters

The search function is essential because it allows customers to find exactly what they’re looking for as quickly as possible. Customers who aren’t sure what they’re looking for need a way to browse through your marketplace. Make your platform exceptional with smart filters, which are able to answer to different users’ browsing and searching behaviour.

Product selection
Source: Pixabay

#2 Easy and fast product selection

People are always interested in exploring and buying new products and services. The popularity of eBay or Amazon opened the door to a niche social marketplace development and all you have to do is to think of the niche where all the products or services can be sold or rented in a unique and more convenient way.

#3 Trustworthy review system that protects both your buyers and sellers

Building a brand where everyone is feeling safe to sell and buy is the number one priority for your business. Sophisticated review system will allow your business to grow and at the same time give users the opportunity to browse or buy products in a secure and trustworthy manner. Your online marketplace should provide your customers and merchants with a secure online shopping experience.

#4 Find the right development team

Businesses can rise and fall if the right technology is not employed. The success of an online business depends largely on the technology. There are many options and they are coming with their pros and cons. Read on to understand the main differences and advantages of various technology solutions.

Launching an online marketplace on a SaaS platform

Pros: This is the first choice for many companies and newbies in the eCommerce industry because SaaS platforms are “in the cloud”. As the owner, you won’t have to worry about hosting for example. Apart from that, SaaS software can provide you with proven technical infrastructure, developed functionalities and tools for content promotion.

Even though in its early stages, artificial intelligence can do a lot when it comes to recognising your customer’s needs. Some of the perks of AI is already implemented into Salesforce Commerce Cloud for example. In the future, almost every SaaS product could have a system that will predict user behaviour and save your precious time and budget.

Chat bots on online marketplace
Source: Pixabay

Cons: Most SaaS solutions are based on a subscription model. In the long run, expenses are there, even if you don’t sell enough. Also, with a SaaS solution, you won’t always be able to customise features, even though most of them are flexible enough. Still, you can count that you will probably be limited in a way to whatever tools the SaaS provider offers.

Dedicated team for custom website development

Pros: Most web agencies provide dedicated teams of experts who are more involved in your project. Their professionalism comes with industry-standard coding. A dedicated team commonly consists of developers, designers, Quality Assurance Engineers, and SEO and marketing experts who work with you to deliver a great user experience and visually impressive and interactive marketable products. You can count on their previous experience, and focus on the business side.

At the same time, their expertise and experience can be easily tested and verified. Most web agencies offer portfolios and free services before any further negotiations. To be sure that you are choosing the right development team, opt for the web development agency with rich experience in custom ecommerce development and integration with payment providers and shopping carts. Your team needs to have this particular expertise.

Hiring a web development team for custom development of the online marketplace
Source: Pixabay

Cons: The price depends on the size and expertise of the web agency you want to hire. Hiring an experienced team of developers might be expensive if the development phase requires more time, which depends on the complexity of the project. If you choose to work with a web agency first explore how they work and their engagement models and compare their development contracts. Professional developers will help you decide whether your project is more suitable for a fixed price contract or for a Scrum development team.

Hiring a freelancer for online marketplace development

Pros: An experienced full stack developer is able to deliver quality work based on your business needs for a reasonable price.

Cons: On the other hand, the range of specific tasks that have to be done might not be a one-man job. From design and development to deployment and bug fixing, there are many fronts to be covered to develop an MVP. After all, with a freelancer, you might not be able to follow the deadlines in case the development phase is not time-framed.

#5 Build a scalable online marketplace business

Building a successful marketplace does not only require time and hard work but also a smart strategy that will help you retain your customers and deliver a scalable solution that grows with your business. A thoughtful integrated marketing strategy can help you with user acquisition and product promotion but only a good development plan and the right technology can deliver a scalable product.

Planning is the key, as well as affordable marketing that delivers. Work on your idea, share it with the people who might be interested in financing your project. Discover your competitors, and think about why and how your marketplace is going to be better and unique.

Have various ideas for building an online marketplace and you want to find out how to prototype ideas? Get a free quote and we can help you launch a successful business.

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