Create An Online Marketplace


What Is A Marketplace?

Ever since man stopped running after furry elephants with spears and clubs and started growing surplus food there have been marketplaces. In the old days marketplaces sprung up wherever people got together to trade grain for fur, or leather for metal ware, or quack cures for whatever trinkets passed for the high fashion of the day. All these products (including quack cures) have survived to the present day and are being traded or exchanged for cash via modern marketplaces.

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A lot of these marketplaces are physical, with brick and mortar stores getting together in a physical market place to cater to a large flow of shoppers with cash or cards in their pockets and the intent to purchase. Increasingy, this flow is shifting to digital or online marketplaces.

The Digital Marketplace

There's a number of reasons for switching to an online market - there are no real estates costs, you could have a million merchants in your online marketplace, anyone anywhere in the world can buy or sell something on your marketplace website. On the downside, it can be notoriously difficult kickstarting a digital marketplace.

In the old days marketplaces would spring up wherever there was a high traffic of people or goods - religious gatherings, landing areas on rivers or sea harbours, a busy crossroads. There's no such thing on an internet marketplace - the buyers usually arrive after the sellers are already there and there are a large number of goods you can search for on the platform.

You could say that social networks and news sites are an exception - they are high-traffic areas. But most people are on social network to exchange pictures of holidays or cute babies (or furry animals being hunted to extinction). They are not usually there to buy and sell. You can throw in an advertisement and hope that someone buys something eventually but that's about it.

What Is An Online Marketplace?

Online marketplaces are clear in their intent - they exist for buying and selling but how do you get people there? Buyers first or sellers first? Buyers usually want to see a large range of products before they get attracted to a marketplace. How do you get sellers in there - who are they going to sell to? How do you tackle this chicken and egg situation?

You could crack the supply egg by offering sellers a free store in your online marketplace. There's a lot of competition around that so you'll need to value-add, by providing a nice-looking store where buyers can easily find the items they are looking for and then have a simple means of paying for them.

On an online marketplace all this translates into good user experience, intuitive interface design, easy-to-navigate product catalogs and then after that a smooth e-commerce experience and a good choice of payment options. Add to that inventory management, invoicing, shipping, refund handling and taxation and you have the beginnings of an efficient technological platform upon which to build a high flow, high-revenue online marketplace.

Online Marketplace Business Ideas

Another way of getting sellers around to your online marketplace would be to focus on a particular industry or type of product. Instead of trying to go all out and trying to create the Walmart of all marketplaces focus on an area where you know you can talk to sellers in their own language.

Build a clothing and accessories marketplace, build a hand-crafted products marketplace, or create an online marketplace for second-hand goods in your locality - you're likely to know everyone around so finding sellers should not be a problem. And you are providing them a good e-commerce platform on which to sell their goods.

Get 10 of your friends together and start an online food marketplace, or get 10 of your classmates from art/design college and build an online art marketplace or an online fashion marketplace.

Start small, figure out which way the sellers and buyers are going and then scale up.

Your Marketplace Model

While you are toying about with marketplace ideas it is important to think about the marketplace model you will adopt. You could build a peer-to-peer marketplace, where Tom sells Joe a second-hand bicycle, or a business-to-business marketplace, where Wally's Wheels sells a bunch of alloy wheels to Rocket Car for their line of custom cars. Blipteam lends itself better to B2B ecommerce or B2C ecommerce - Blipteam relies on sellers creating entire websites full of multiple products, so that kind of scenario will not work out too well for Tom who only wants to sell one bicycle (sorry Tom).

Your Marketplace Revenue Model

Your online marketplace business model will also need to take into account your revenue model. How is your marketplace going to make money for you? Are you going to charge your sellers a commission on each item sold? Are you going to handle all transactions as the marketplace owner and pay your sellers separately? Are you going to charge your sellers a fee for helping them build their stores?

It all depends on the maturity of your marketplace and the scale at which you are. A high-traffic marketplace might encourage sellers to pay for online real estate and help with creating ecommerce stores. While you're starting out, commissions on future sales might be a more viable marketplace business model.

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Blipteam is free to try. Just dive in and start building - we have a checklist inside the app that will help you complete your online marketplace and start driving some sales:

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