An online marketplace is a web that connects sellers and buyers on a single platform. The marketplace success can be determined by the elements of personalization, conveniences, and streamlined experiences across all channels. A marketplace regulates the relationship between the vendors and buyers while managing transactions and processes. However, the popularity of online marketplaces has continued to grow each year by significant shifts in consumer preferences and behavior. With projected growth at 20%-25% YOY, the number is undoubtedly set to reach $5 trillion by 2025.
So targeting different marketplaces helps you reach out to a broad range of customers. While marketplaces provide you with the infrastructure to get started, it still requires management and refinement to optimize pricing, fulfillment, and merchandise. You can therefore enjoy the benefits of selling by showcasing your products on multiple marketplaces.
Tips for Creating a Successful Marketplace
Follow these steps to enjoy marketplace success.
Choose your industry
One of the primary reasons businesses fail is their lack of demand. Firstly it is crucial to pick a viable industry and a suitable business model. If you think that your chosen industry will help you generate buyers and suppliers, staying relevant and providing value will be easy. Assess the market availability and size of the audience that you want to target.
Vertical vs. Horizontal Marketplaces
Secondly, consider the three critical aspects while planning: marketplace trends, structure, and specializations. Understand the advantages and disadvantages of the market type. However, plan your development strategy and pick a design that enables entrepreneurs to create a roadmap for the development of their marketplace. Vertical online marketplaces cater to niches and specific spheres. Gear a business towards an industry or a demographic. In comparison, a horizontal market offers goods and services in multiple categories.
Value Proposition
Thirdly, keep in mind how your platform will resonate with buyers and sellers. Will it create any disruption in the selling and buying process? Will it save the buyer money and time? Consider the value proposition of your business and how it will solve the buyers’ pain problems. Thus, the main goal of your marketplace should be to offer transactions and experiences that aren’t readily available. Marketplace success entirely depends on the value proposition that you are offering.
Ideal Business Model
Fourthly, choose the business model that brings more profit. A marketplace fails because the service ends up being unprofitable or irrelevant. There are several marketplace models you can opt for your business. The models include –
- Subscription – This model requires users to pay the registration fees.
- Commission – It is a fee or percentage taken from the gross sales.
- Listing Fee – The sellers are charged for listing their products on the platform.
- Featured Listings – This allows members to pay for featured listings and ads.
- Lead Generation – This involves sellers paying for every generated lead.
- Freemium – In this, the essential functionalities of the marketplace are free and accessible. The sellers can pay for the upgraded premium features.
Market Size
Furthermore, always consider the market size to enjoy marketplace success. When you determine what drives your market, you can undoubtedly assess its size. By selecting the driving factor for your market, you can gain insights into local/ global turnover, profit margin, how much the market is offline, etc.
Effective Distribution Models
Bring your services or products to more people by enabling digital distribution, referrals, and offline distributions to win over your target audience.
Build Trust
Moreover, win the trust of your audience. Depending on your marketplace industry, follow these thumb rules to build trust-
- Include images and videos- When people see what you are offering, they tend to move forward with the purchase process.
- Over Explain, over document- Explain the pros and cons felt by the customers and what value it brought to them.
- Show Authenticity- Showcase all about your products and the makers. The best way to build your credibility is by being transparent.
- Ensure secure payments – Offer safe and reliable payment options to assure users that their information is protected while using the platform.
Innovations
For a marketplace to succeed, it is mandatory to keep innovating. You can launch a product and keep adding new features to make it more attractive. Thus, innovation is the key to all businesses’ growth and expansion. Consequently, if you are not offering anything new, why will people want to connect to you or your business? Coming up with new ideas and features, you can retain your existing customers and attract new ones.
Thus focus on the timing and keep the latest trends of the eCommerce industry to enjoy a marketplace success.
Now that you know the steps to create a thriving marketplace, let us look at the critical elements of marketplace success.
Nuts and Bolts of a marketplace Success
The key elements to define a marketplace success includes-
Pricing
One of the key elements for marketplace success is pricing. Price plays a vital role in defining the marketplace competition. Sellers can stay ahead of their competition by keeping a dynamic pricing policy. However, a dynamic pricing policy might lead to channel conflict, meaning that the same product is listed at different prices on different platforms. To avoid channel conflict, you can have a differentiated assortment strategy so that the products you sell on the marketplace stand apart from the other platforms.
Assortment
Customers today are savvy enough to compare the products on different platforms. Thus you must-have products with distinct styling, packing, colors, and names so that customers don’t compare the products. You can also use marketplaces for certain kinds of inventory such as specific categories, overstock goods, etc. Instead, you can offer a unique assortment taking a category-specific approach.
Marketing, Advertising, and SEO
A marketplace success depends on the SEO strategy and ad strategy. Hence, ensure your presence at places where customers are looking for. Advertising, certainly, is one of the most dominant aspects of the algorithm.
Product Listing
You should list your products in such a way that once people get to your listing, you give them everything they want to know about your product. Most importantly, build your trust by providing every tiny detail about your product and enjoy sales by convincing people to buy your product.
The product Itself
After all, everything is about the product. Make sure your product is of such quality that it is easily differentiated from other products in the market.
Therefore, with these initial steps, you can undoubtedly get your B2B marketplace in the limelight and enjoy marketplace success in no time. But the main question is how you can maximize your marketing efforts?
Ways to Maximize Marketing efforts
Follow these three models to maximize your efforts towards the marketing of your products.
AIDA Model
This model stands for Awareness, interest, desire, and action. Moreover, utilize this model to plan a transition from customer’s initial Awareness to a product purchase. 1. Awareness – Use catchy taglines, promotional slogans, and attractive offers to make people aware of your products. 2. Interest – Keep the customers’ interest intact by highlighting product visualizations, discounts, customer feedback, etc. 3. Desire – Add product descriptions and demonstrations. 4. Action – Add visible CTAs, and contact information.
Four Ps Model
The marketing concept revolves around the four Ps, which are- 1. Product – The description of the products should reflect that the product is of high quality and offers a warranty. 2. Price – Price should be such that it justifies the product. Keeping low prices won’t attract the audience as long as extra services, discounts, and deals, a relevant website are offered and highlighted. 3. Promotion – Make a successful promotional plan by making attractive banners and texts. 4. Place – Place plays a vital role in defining the target audience. If it’s a local online store, it must be reflected in the website content and interface.
Loyalty Programs
Set up loyalty programs. Rewarding your loyal customers certainly helps in bringing them back more frequently. Include features like –
- Calculation and display of redeemable points, discounts, etc.
- Customer identification
- Notifications about the deals and offers
- Displaying products to loyal customers only.
Above all, attempt marketplace success by following these models and seeing your marketing efforts’ fruitful results.
Conclusion
Target the top marketplaces and sell products to a vast audience base. As a result, follow the necessary steps to create a Magento Marketplace and enjoy success. Thus, join the league of successful sellers by listing your products on the most prominent marketplaces.