Welcome to the Marketplace Masterclass. In this three part series I will tell you all about creating a marketplace business model, designing and developing a marketplace as well as scaling and marketing it. You will learn what are the different types of marketplaces with real-life examples and how to build your product to succeed.
All Articles In This Series:
- How Do Marketplaces Like Etsy And Fiverr Make Money?
- How To Design & Develop A Marketplace?
- A Guide To Scaling, Growing & Maintaining Your Marketplace
After you have researched and validated your idea, it’s time for the next steps. You need to bring this idea to life. Because marketplaces are increasingly popular, there’s several platforms that will help you launch a business like this without the need to develop something custom. However, in some cases, teaming up with a software development agency and building something from scratch is the way to go. Let’s break down those two approaches.
Ready-To-Use Software
First, let’s talk about using ready-to-go software. This approach is especially great for small and medium business owners or individual entrepreneurs. Along with the rise of eCommerce and marketplaces, several different platforms came up to make your life easier. Here’s our top picks with a short overview of each one:
Magento
Magento is a widely popular eCommerce platform, however, thanks to plugins and extensions, you can easily turn an online store into a marketplace. One of the best things about Magento is that it’s really easy to use and is an open source solution (which means it’s available for free). However, if you’re looking for a highly-customized marketplace, you might have trouble achieving that with Magento.
WooCommerce
WooCommerce is especially popular among eCommerce owners. It’s a WordPress plugin that enables you to transform your website into a shop quickly and easily. It can be used to build a marketplace, however, it rarely proves to be worth the effort.
Shopify
Shopify is an eCommerce giant. It offers excellent plugins and extensions to build a marketplace, however, it is much more expensive than open source solutions like Magento. You need to consider these costs before making your decision but it’s also worth noting that with Shopify you get regular software updates and support which can prove very valuable.
Cocorico
Cocorico is a dedicated marketplace solution. It’s not meant for eCommerce like the sites listed above. This solution is focused on service-oriented marketplaces (think Lyft or Uber). Cocorico will be one of the best choices if you decide to use ready-to-use software.
Yo!Kart
Yo!Kart is another strictly-marketplace-focused solution. It’s known for its great user experience and design. If you’re looking to build a multi vendor marketplace, this one is definitely a strong contender.
Prestashop
Prestashop is similar to Magento in that while it’s mainly an eCommerce solution, you can customize it with plugins and extensions to become a marketplace. Again, it may take some time and effort so it’s worth weighing the pros and cons.
Sharetribe
Sharetribe offers two different solutions. One that’s ready-to-go and the other which can be customized to suit your specific needs. It’s strongly focused on usability and smooth experiences on both the user-end and the vendor-end.
Ready-To-Use Software: Pros & Cons
Before making a decision, you need to be aware of both sides of the ready-to-use coin. On one hand, it’s very convenient to use available software. After all, it makes it quicker to launch the marketplace. It can also be initially cheaper than a custom platform. However, in the long term it might become an obstacle. Scaling is not always easy with this software and might slow down your business’s growth. It can also be more costly in the future as your user base expands. It’s a question of your goals and whether you are ready to make the initial investment.
Custom Marketplace Development
Alright, so let’s talk about building a custom marketplace. This means either hiring an in-house team or outsourcing your marketplace development to a software agency. You should keep in mind that the biggest marketplaces available are custom-made projects (think Uber or Kickstarter). And that’s because building something custom offers a much wider range of possibilities than using a pre-existing software solution. Let’s dive into the different pros and cons of building a custom marketplace:
Custom Marketplace: Pros
- More control over the platform
- Access to more features
- Faster and better scalability
- 24/7 access to your software development team
- Building a more recognizable and unique brand
Custom Marketplace: Cons
- Larger initial investment
- Possibly longer time to market
What To Focus On When Designing Your Marketplace?
You need to keep in mind that while building a custom solution gives you more freedom and flexibility, the responsibility to create a user-friendly design and a smooth experience falls on you. With the right development team this shouldn’t be a hard task but there’s several things you need to remember when working on your marketplace.
1. Focus on a good experience for both merchants and customers
One of the key things that differentiates an eCommerce store from a marketplace is that your platform caters to both the customers and the sellers. That’s why when designing and developing your marketplace you need to focus on elements like the product page, the checkout path and the customer’s profile as well as the merchant’s profile and administration panel. Keeping both sides of the transaction happy is key to a successful marketplace.
2. Overview the quality of offers
Some merchants might not be very UX-oriented. That’s why, to both increase their sales and improve the customer experience, your marketplace should include things like tips on how to write product descriptions, a minimum number of product pictures a seller needs to add etc. These things will also help you build a good relationship with the sellers that use your marketplace.
3. Improve constantly
When it comes to any digital product, gathering feedback and introducing improvements is the most crucial thing to do. Even if you have completed the design and development of your marketplace, you should never stop doing tests and asking users for their feedback. Besides unique inventory or lower prices, a superior UX is what can really make a marketplace stand out, even in a very saturated market.
What makes us experts on this topic?
Well, I am the CEO of INVO and together with my team we build digital products, including marketplaces. We have made our clients millions in revenue from our web and mobile products. What you’ve learned from this episode is backed up by our experience and knowledge of our entire product team.
If you’d like to learn more about marketplaces, you can download our free eBook. You can also watch this series on YouTube.
If you’re looking for a team of experts to build and launch your online marketplace business – contact us!
