The triumph of marketplace platforms like Etsy, Not on the High Street, and Airbnb has spurred a remarkable surge of interest in marketplaces. They have showcased that this model can be adapted to virtually any enterprise in a scalable manner, boasting the possibility of substantial growth.
Furthermore, the marketplace space is progressing at an accelerated pace, thus presenting an ideal opportunity to venture as an entrepreneur in this area and build a marketplace platform.
It’s important to note that to build a marketplace platform is a no small endeavour, but with the right technology, a well-planned strategy, understanding of best practices, and time investment, sustainable growth and success is an acheiveable goal.
In this guide, we aim to share some of the knowledge we have accumulated at markko, which will equip you to be a part of this thrilling industry… and position you excellently to establish a viable marketplace.
Why build a marketplace platform now?
First, we will explore why this has grown into such a flourishing market, the potential obstacles you may encounter, the importance of understanding your objectives, the optimum moment for launch (now!) and the significance of engaging your users.
It’s worth noting that financing for projects in the Collaborative Economy industry are nearly five times higher than that for the most successful social networks (like Facebook, YouTube etc) since December 2015. And the difference keeps expanding.
The size of the collaborative economy industry is currently around £11 billion, with the projection to reach £247 billion by 2025.PwC
Why are marketplaces appealing ventures?
The appeal of marketplace businesses and the reason they are so scalable is that you don’t actually require your own inventory to operate one – consider Etsy which doesn’t own any physical retail space. Simply put, you can establish an online marketplace that is highly successful without incurring considerable upfront costs for the initial inventory. This mitigates a substantial amount of risk typically associated with starting a business.
This opportunity has been seized by thousands of entrepreneurs across numerous sectors who might not have previously envisioned a path to the market. However, let’s be realistic; creating an online marketplace and making it successful isn’t guaranteed. It necessitates hard work and dedication.
Is having a great idea enough?
Simply having a great idea that you are passionate about and launching a marketplace is just the beginning. Just imagine, if you don’t have your own inventory initially, how will you attract buyers? And similarly, how will you sell your idea to people so they will bring their own inventory to your marketplace?
Except for some extraordinary luck, it is rare for a marketplace to attain success instantly. Building critical mass typically requires time. Many marketplace ideas demand a change in mindset. Take Airbnb, for instance, the notion of staying in other people’s homes was previously unfamiliar. It’s essential that when you embark on this journey, you are explicit about your objectives. Break this down into three simple questions:
Be assured about your motivation to create a marketplace. Self-honesty is key – is it because you desire to be your own boss? You believe it will contribute positively to the world? Or simply to accumulate wealth? Regardless of the reason, as long as you are honest about it, you can formulate the appropriate strategy to achieve it.
A piece of advice – it’s preferable if it’s something you are genuinely passionate about. If it holds significant importance to you, you are much more likely to dedicate time to it and ultimately make it successful.markko
There’s a vast difference between envisaging a small business that will require minimum staff and one that is expansive and will necessitate funds being raised from venture capitalists. In the latter scenario, to attract investment you’ll need a lucid business strategy, a solution to a recognised problem, robust UX design concepts or a Minimum Viable Product (MVP) as well as projections demonstrating how you plan to provide substantial returns for your investor.
How to build a marketplace platform
Once you’ve developed your initial thoughts and objectives, from a practical standpoint, you’ll need to contemplate the actual build of a marketplace. If coding isn’t your forte, you’ll need to engage a specialist SaaS marketplace platform to do the hard work for you.
Decipher which segments of the process you have expertise in and where you’ll require guidance and advice. Factor in your budget, your network, and where you can leverage your professional experience. All these elements will influence how you initiate your marketplace business and its early stages.
While many startups are blessed with a competent team of founders, if you’re going solo without the necessary technical skills, don’t let that discourage you. You can still bring your vision to fruition… you just need a reliable partner, like markko, to guide you in making informed decisions throughout your journey.
What about the features?
The features and functionality offered will be crucial in determining the success of your marketplace, but there’s more to it than just that. Your initial idea and drive will be what makes it successful, along with your capacity to market it as a viable proposition that people will want to purchase. In other words, prioritise developing a Minimum Viable Product (MVP) and launching it as early as possible.
By doing so, you’ll soon ascertain if you have a viable business idea without having to make significant upfront investment… what you don’t want is to spend a substantial amount of money on a venture that later proves to be less promising than you initially thought. And since you won’t know if the idea will gain traction until you present it to people, get it out there as soon as possible, while ensuring that you can deliver the promised solution at least at a basic level.
Focus on the idea and gather feedback
During the initial stages, focus on the idea rather than the platform. The best marketplace platform in the world won’t salvage a bad idea that no one is interested in. It’s a common mistake for individuals to overspend time and money on developing a sophisticated platform with global potential… before they’ve even convinced a handful of people that their idea is viable.
By gathering feedback from customers and potential customers, you can continually refine your proposition until it’s near perfect. It cannot be stressed enough how vital customer feedback is. Maintain an ongoing dialogue with people; their insights are invaluable. It’s the credibility of your proposition that will determine the success or failure of your business – while the platform is a critical component of that, even the most advanced platform won’t transform an unwanted proposition into a desirable one – only customers can do that.
Once you’re confident that your idea is solid, it’s time to put it out there. – it’s time to build a marketplace platform! This is where we step in. Here at markko, we adopt a user-centric approach, employing our advanced headless marketplace platform, we can offer a completely unique customer experience. We focus on crafting fully scalable, optimised, and sustainable multi-vendor marketplaces to drive engagement and accelerate growth.